World Trade Organization |
RESTRICTED |
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WT/TPR/S/198 | |
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(08-1132) |
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Trade Policy Review Body |
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TRADE POLICY REVIEW Report by the Secretariat MAURITIUS |
This report, prepared for the third Trade Policy Review of Mauritius, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Mauritius on its trade policies and practices. Any technical questions arising from this report may be addressed to Mr. Jacques Degbelo (tel: 022/739 55 83) or Ms. Ulla Kask (tel: 022/739 56 27). Document WT/TPR/G/198 contains the policy statement submitted by Mauritius. |
Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on Mauritius.
CONTENTS
Page
SUMMARY OBSERVATIONS vii
(1) The Economic Environment vii
(2) Institutional Framework viii
(3) Trade Policy Instruments viii
(4) Sectoral Trade Policies x
(5) Trade Policy and Trading Partners xi
I. Economic environment 1
(1) Major Features of the Economy 1
(2) Recent Economic Developments 2
(3) Trade and Investment Performance 5
(i) Trade in goods and services 7
(ii) Investment 10
(4) Outlook 11
II. trade and Investment regimes 12
(1) Institutional Framework 12
(2) Policy Formulation and Implementation 13
(3) Policy Policy Objectives 16
(4) Trade Agreements and Arrangements 17
(i) Overview 17
(ii) WTO 18
(iii) Preferential trade agreements and arrangements 21
(5) Foreign Investment Regime 29
Annex II.1 Aid for trade 33
III. trade policies and practices by measure 35
(1) Introduction 35
(2) Measures Directly Affecting Imports 36
(i) Customs procedures, and valuation 36
(ii) Tariffs, other duties, and taxes 38
(iii) Duty and tax exemptions and concessions 44
(iv) Rules of origin 45
(v) Tariff preferences 46
(vi) Import prohibitions, restrictions, and licensing 47
(vii) Contingency trade remedies 51
(viii) Technical barriers to trade (TBT) 51
(ix) Health, sanitary, phytosanitary, and environmental protection measures 55
(x) Government procurement 57
(3) Measures Directly Affecting Exports 59
(i) Registration and documentation 59
(ii) Export taxes, charges, and levies 60
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(iii) Export prohibitions, restrictions, and licensing 60
(iv) Export subsidies, and duty and tax concessions 60
(v) Export promotion and assistance 62
(vi) Other provisions 63
(4) Measures Affecting Production and Trade 64
(i) Incentives 64
(ii) State trading, state-owned enterprises, and privatization 64
(iii) Competition policy and price controls 68
(iv) Intellectual property rights 70
IV. trade policies by sector 73
(1) Introduction 73
(2) Agriculture and Related Activities 74
(i) Overview 74
(ii) Key subsectors 79
(3) Manufacturing 91
(4) Energy 95
(5) Services 96
(i) Financial services 97
(ii) Telecommunications 102
(iii) Transport 105
(iv) Tourism 109
(v) Professionnal services 113
REFERENCES 117
appendix tables 121
CHARTS
Page
I. Economic environment
I.1 Structure of merchandise trade, 2000-06 8
I.2 Direction of merchandise trade, 2001-06 9
III. trade policies and practices by measure
III.1 Breakdown of applied MFN rates, 2007 40
III.2 Tariff escalation by ISIC 2-digit industry, 2007 41
IV. trade policies by sector
IV.1
TABLES
I. Economic environment
I.1
I.2 Main economic indicators, 2001-07 3
I.3 Balance of payments, 2001-07 5
I.4 Foreign direct investment, 2001-07 10
II. trade and investment regimes
II.1 Main trade-related laws and regulations, December 2007 15
II.2 Most recent notifications to the WTO, January 2008 19
II.3 Trade-related investment needs, 2006-15 34
III. trade policies and practices by measure
III.1 Total import tax revenue, 2000-07 38
III.2 Structure of MFN tariffs, 2007 39
III.3 Summary analysis of MFN applied tariff, 2007 41
III.4 Rules of origin under preferential trade agreements 45
III.5 Summary analysis of MFN applied tariff and preferential tariffs, 2007 46
III.6 Import prohibitions, 2007 48
III.7 Conditions on imports of controlled goods, November 2007 49
III.8 Selected technical regulations, November 2007 52
III.9 SPS measures notified, 2001-07 56
III.10 Thresholds for major contracts 58
III.11 Controlled export goods, July 2007 60
III.12 Export processing zones, 2000-06 61
III.13 Purchases by the State Trading Corporation, 2000-06 65
III.14 State-owned corporations, 2007 66
III.15 Imported commodities subject to the maximum mark-up system, December 2007 69
III.16 Automatic Price Mechanism (APM), as of October 2007 70
III.17 IPR related statistics, 2006-07 72
IV. trade policies by sector
IV.1 Main aggregates of the agricultural sector (including fisheries), 2001-06 74
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IV.2 Agricultural production, 2001-06 75
IV.3 Food crops: area and production, 2001-06 75
IV.4 Parastatal bodies intervening in non-sugar agricultural activities, November 2007 77
IV.5 Sugar production and trade, crop years 2001-06 80
IV.6 Institutions intervening in the sugar industry, 2007 82
IV.7 Subsidies provided by the sugar industry on local market sales, 2002-06 82
IV.8 Tobacco and cigarettes production, 1998/1999, 2005-07 85
IV.9 Livestock and dairy products, 2006 87
IV.10 Fisheries production and trade, 2001-06 89
IV.11 Main indicators of the manufacturing sector, 2001-07 92
IV.12 Electricity tariffs, 2007 96
IV.13 Selected telephone and internet tariffs, 2000-06 103
IV.14 Merchant fleet and port traffic, 2001-06 107
IV.15 Main tourism indicators, 2000-07 110
APPENDIX TABLES
I. Economic environment
AI.1 Structure of exports (including re-exports), 2001-06 123
AI.2 Structure of imports, 2001-06 124
AI.3 Destination of exports (including re-exports), 2001-06 125
AI.4 Origin of imports, 2001-06 126
III. trade policies and practices by measure
AIII.1 Applied MFN tariff averages by HS2, 2007 127
AIII.2 Incentive schemes, as at July 2007 131
AIII.3 Excisable goods, December 2007 135
AIII.4 Controlled imports, as at November 2007 140
AIV.1 Applied MFN tariffs, by ISIC Rev.2 category, 2007 142
SUMMARY OBSERVATIONS
(1) The Economic Environment
1.
2. The reforms have begun to bear fruit, with real GDP growth at 5.1% on average (per year) since 2003, up from an average of 2.2% in 2001 and 2002. This recent performance has been based mainly on the strong growth in the services sector and the recovery of the textile industry. During most of the period under review, macroeconomic policies have contributed to containing inflation, to some 6.5% per year. However, it rose to 8.9% in 2006 because of higher oil prices, an increase in excise duties on products such as alcoholic beverages and cigarettes, the reduction of subsidies on others (including rice, wheat flour and bread), an the increase in freight costs, and the depreciation of the Mauritian rupee. The central government fiscal deficit remained relatively high (above 5% of GDP) throughout most of the period under review. However, it is estimated to have decreased to 4.3% in 2006/07 and is expected to remain around 3.8% in 2007/08, due to the revival of economic growth, and increased public revenue.
3.
4. The high ratio of trade in goods and services to GDP (around 120% on average) reflects the importance of external trade for
5. The EC is
(2) Institutional Framework
6. The Constitution is the supreme law of the
7. The Ministry of Foreign Affairs, International Trade and Cooperation, through its Trade Policy Unit (TPU), has primary responsibility for the formulation, review, and assessment of trade policies. The Ministry chairs also the WTO Standing Coordination Committee comprising representatives from the public and private sectors. The Committee deals with the implementation, follow-up, and coordination of trade policy issues covered by the WTO Agreements. Specific meetings to discuss bilateral and regional trade issues are convened on a regular basis by the TPU. The Ministry of Industry, Small and Medium Enterprises, Commerce and Cooperatives is in charge of regulating the local market, including issues such as import and export controls. The Board of Investment (BOI), operational since March 2001, is the apex governmental agency responsible for promoting and facilitating investment. Under the authority of the Ministry of Finance and Economic Development, the BOI aims to promote
8.
(3) Trade Policy Instruments
9. Since its last TPR in 2001,
10.
11. Several steps have been taken to accelerate customs clearance, including the introduction of the channel system in 2003, and of a new - Blue - channel (in August 2007) which allows for paperless customs clearance under the Cargo Fast Track Programme. Since
12. Export permits are required on products considered as "strategic" or "sensitive" to the economy, including meat products, rice, flour, and sugar, and goods eligible for preferential treatment in importing countries.
13. Price controls, consisting of a fixed maximum price system (on imports and locally produced goods) and a maximum percentage mark-up system (only on imports), are still maintained on some strategic products, though the number of product groups covered has been decreased to eight and nine, respectively.
14.
(4) Sectoral Trade Policies
15.
16. For food security purposes, Mauritius continues to maintain import, export, and price controls, and/or strategic reserve stocks on agricultural products, such as cereals and cereal products, animals and animal products, sugar, spices, vegetables, and fruits. Marketing boards (e.g. the Agricultural Marketing Board and the State Trading Corporation) are still in place and hold monopolies over the import of products such as seed potato, whole onions, whole garlic, wheat flour, and ration rice. Incentives are granted to the agriculture sector to reduce production costs (e.g. input, and freight costs), though some incentives, such as those granted under the Agricultural Development Scheme, have been eliminated. Quotas are maintained on imports of table potatoes and salt, and on exports of chilled fish. Foreign exchange earnings from sugar exports must be sold on the local market. Tariff protection in agriculture (Major Division 1 of ISIC Revision 2) averages 4.9% (down from 14% in 2001), with rates ranging up to 30%.
17. The manufacturing sector has been dominated by textiles and clothing, followed by food production (including sugar milling, beverages, and tobacco), non-metallic minerals, and chemicals industries. EPZ companies have accounted for the bulk of production. Nevertheless, in order to enhance competitiveness in the context of rising production (labour) costs in Mauritius, most incentives granted to the sector, including under the EPZ scheme, were abolished by the Finance Act 2006. In addition, nominal average tariff protection for the sector (Major Division 3 of ISIC Revision 2) has been lowered from 20.6% in 2001 to the current 6.8%. However, border protection for clothing and footwear remains high, mainly due to the introduction of specific duties with AVEs ranging up to 277.5%. After negative average annual real growth during 2001-05, the sector seems to be recovering, with growth of around 4% in 2006-07. Import, export, and price controls, and/or technical regulations apply to various manufactured products.
18. The services sector is the largest contributor to
(5) Trade Policy and Trading Partners
19.
regional agreements reflects the importance of external trade to its economy. Therefore, it has reacted strongly to the changing international environment by radically reforming its trade regime. Major steps have been taken to boost competition, dismantle the dualism in the economy and improve resource allocation. These reforms could be anchored by the extension and improvement of
20. Mauritius trade regime would benefit from increased predictability if the gap between applied and bound rates were reduced, and the existing services commitments were modified to make them better reflect the current, more liberal regime applied in the sector. This is particularly the case for professional services, given
21.