WORLD TRADE WT/TPR/M/27
14October 1997
ORGANIZATION(97-4455)
Trade Policy Review Body Original: French
15-16 September 1997
TRADE POLICY REVIEW
BENIN
MINUTES OFMEETING
Chairman: H.E. Mr.Munir Akram (Pakistan)
Page
I. INTRODUCTORY REMARKS BYTHE CHAIRMAN .............2
II. OPENING STATEMENT BYTHE REPRESENTATIVE OFBENIN ...3
III. STATEMENT BYTHE FIRST DISCUSSANT ..................5
IV. STATEMENT BYTHE SECOND DISCUSSANT ................6
V. STATEMENTS BYMEMBERS OFTHE TRADE POLICY .........8
REVIEW BODY
VI. REPLIES BYTHE REPRESENTATIVE OFBENIN AND
ADDITIONAL COMMENTS .............................11
VII. CONCLUDING REMARKS BYTHE CHAIRMAN ...............18WT/TPR/M/27
Page2
I. INTRODUCTORY REMARKS BYTHE CHAIRMAN
1. ThefirstTrade Policy Review ofBenin tookplace on15and16September 1997 under the
chairmanship ofH.E. Ambassador Munir Akram. TheChairman welcomed thedelegation ofBenin,
ledbyH.E.Mr.Gatien Houngbédji, Minister ofTrade, Handicrafts andTourism, andthediscussants,
Mrs. Florence Dobelle (France) andMr.Moha Ouali Tagma (Morocco). Asusual, bothofthe
discussants spoke intheirpersonal capacity. They hadmade available, inadvance, anoutline ofthe
main points theyintended toraise.
2. TheChairman recalled thepurpose oftheTrade Policy Reviews andthemainelements ofthe
procedures forthemeeting. Thereport bytheofGovernment ofBenin hadbeen circulated as
document WT/TPR/G/27, andthereport bytheWTO Secretariat asdocument WT/TPR/S/27. An
outline ofthemainpoints toberaised bythediscussants appeared indocument WT/TPR/D/12. The
delegation ofBenin hadreceived acopy ofthewritten questions submitted bythree delegations
(Hong Kong, China; European Union; andJapan). Ifitwerenotpossible toanswer thequestions
infullduring themeeting, supplementary written replies would beprovided later.WT/TPR/M/27
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II. OPENING STATEMENT BYTHE REPRESENTATIVE OFBENIN
3. Therepresentative ofBenin, H.E. Gatien Houngbédji, Minister ofTrade, Handicrafts and
Tourism, thanked theSecretariat oftheWorld Trade Organization (WTO) fororganizing thisfirstTrade
Policy Review ofBenin. Heaffirmed hisGovernment 'scommitment tothereview, which provided
theother Members withabetter knowledge andunderstanding ofhiscountry 'strade policies and
practices, thereby helping Benin tointegrate intotheglobal economy. ThePresident ofBenin, the
mainarchitect ofBenin 'sliberal economic reorientation, wasendeavouring tointegrate Benin intothe
process ofglobalization ofworld trade andtoobtain concrete andmore favourable assistance within
theframework oftheworld trade system.
4. Thefurther opening-up ofmarkets inthewake oftheimplementation oftheUruguay Round
Agreements hadenhanced thetransparency andpredicability oftrade. Benin hadgone alongway
towards liberalizing itseconomy inthehopethatbydoing so,inaccordance withtheWTO Regulations,
itwould beensured better market access, inparticular inthecountries ofthesubregion.
5. Atapproximately US$370, percapita, gross domestic product (GDP) wasamong thelowest
intheworld andplaced Benin among theleastdeveloped countries. Asatransit country owing to
itsgeo-political situation, Benin wasthemaintradecentre oftheWest-African region, acting asalink
among itscoastal neighbours (Nigeria, Togo) anditsland-locked neighbours (Niger, Burkina Faso,
Mali). TheBeninese economy depended onagriculture (40percentofGDP), withtradeandindustry
accounting for20percentand10percentrespectively.
6. Benin 'sforeign trade ranachronic deficit, witharateofcoverage ofimports byexports of
approximately 50percent. Exports weremainly agricultural, andweresubject toclimatic variations
anddeterioration interms oftrade. Themain goods andservices were cotton fibre, cotton thread,
greycotton, crude oil,fresh fruit, cashew nuts, palm oil,cigarettes andtourism. TheGovernment
hadtaken several initiatives incooperation withprivate tourist operators, including theinternalization
ofthetourist development plan; theintroduction ofasingle tourist visafortheCouncil oftheEntente
countries ontheEuropean Union model; theopening upofBenin totheUnited States; andthe
organization onanannual basis, inFebruary, ofaspiritual andcultural pilgrimage forAfro-Americans,
Haitians andBrazilians among others. Thedevelopment ofhandicraft exports wasalsoapriority.
7. Imports continued tobedominated byconsumer goods (rice, wheat, tobacco, textiles, motor
vehicles), which fedaflourishing market forre-exports tocertain countries ofthesubregion (Nigeria,
Niger, Burkina Faso, Mali). Although Benin belonged totheregional integration groups (WAEMU
andECOWAS), itschief trading partner remained theEuropean Union (53percentofimports and
30percentofexports in1995). However, there hadbeenanumber ofbreakthroughs intheAsian
countries (Japan, China, Republic ofKorea, Thailand) andtheUnited States.
8. Theeconomic crisis which hadledinFebruary 1990totheConference ofthenation 'sdriving
forces, hadbrought about economic liberalism, theruleoflawandtheguarantee thathuman rights
andfundamental freedoms would berespected. Three structural adjustment programmes hadbeen
agreedwiththeInternationalMonetaryFundandtheWorldBanksince1989.Themedium-termstrategy
wastoensure sustainable economic growth bypromoting domestic saving andprivate investment.
During theperiod 1991-1993, withtheimplementation ofthebudgetary andstructural reforms, the
overall situation inBenin showed remarkable improvement. Average GDP growth hadbeen4per
centinrealterms, thanks toasignificant expansion ofcotton production, asurge intheactivity of
theconstruction andpublic works sector andanincrease intraffic inthePortofCotonou. Over the
firsteight months of1997, inflation haddropped to3percent.WT/TPR/M/27
Page4
9. Public finances hadimproved considerably, andthanks toefficient budgetary reforms anda
reduction inthewage bill,agrowing surplus hadbeenrecorded. Thebalance ofpayments hadshown
asteady surplus andofficial foreign exchange reserves hadincreased considerably inthewake ofthe
improved balance ofexternal current account transactions andsignificant capital inflows.
10. Thetariff reform of1991 hadledtotheelimination ofanumber oftaxes. Among thefour
remaining taxeswerethecustoms dutyof5percent(suspended); thecommunity solidarity levy(PCS)
of1percent; thefiscal import dutyof0percent, 5percent, 10percent, 15percentand20per
cent; andthevalue-added tax(VAT) of18percent. Fixed reference prices hadbeeneliminated.
11. Certain stateenterprises experiencing difficulties hadbeenprivatized, wound uporrestructured.
Price controls hadvirtually beenabolished; licensing andother quantitative import restrictions had
alsobeenabolished, together withmostexport taxes; tradeinagricultural goods hadbeenliberalized,
andthemonopolies ofstateenterprises ondomestic trade hadbeen dismantled. Theregulations
governing thecreation andregistration ofindustrial andcommercial enterprises hadbeensimplified.
Restructuring ofthebanking system hadledtothecreation offiveprivate commercial banks andfour
financial establishments, including onefinancial leasing establishment.
12. Thenewdevelopment strategy limited theroleoftheStatetoessential public services andthe
creation ofinfrastructure, stimulation oftheprivate sector andimprovement ofexternal competitiveness.
Thatpolicy hadbeengiven aboost in1994withthedevaluation oftheCFAfranc, aimed atstimulating
theexport sectors andimport substitution activities aswellasinvestments andcapital inflow.
13. TheGovernment 'sobjectives were toliberalize trade, tocontain theincrease intheprice of
massconsumptiongoods,andtopromotethedevelopmentoftourismandhandicrafts.Inthatconnection,
itplanned tosupport existing enterprises andfacilitate thecreation anddevelopment ofnewenterprises;
tostreamline theformalities involved insetting upenterprises; tocreate anindustrial freezonein
Cotonou; andtocreate anopportunity centre. Legal provisions andregulations thatwereconsidered
toorestrictive hadbeenwithdrawn.
14. Theeconomic reform programme fortheperiod 1996to1999aimed atensuring aGDPgrowth
rateexceeding 6percent; atmaintaining inflation at3percentperyear; andatreducing thecurrent
account deficit (excluding grants) toapproximately 5.5percentofGDP by1999. With aview to
creating aninstitutional environment morefavourable tothedevelopment ofbusiness, acertain number
ofreforms were currently being considered bytheNational Assembly. They included therevision
oftheLabour Code, theMining Code, theCommercial Code, theCivil Procedures Code, the
Administrative Code, theCode ofHandicrafts andtheChamber ofTrades. TheCentre forBusiness
Formalities (single window) hadbeeninoperation since 21August 1997 withaviewtobringing the
public sector closer totheprivate sector.
15. Inviewoftheacute differences inlevels ofdevelopment andincomes between WTO Member
countries, itwastobehoped thattheeconomically weaker countries would enjoy increased technical
assistance onthepartoftheinternational community inorder tobeabletobenefit from the
WTO Agreements.WT/TPR/M/27
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III. STATEMENT BYTHE FIRST DISCUSSANT
16. Thefirstdiscussant Mr.Moha Ouali Tagma, congratulated Benin onhaving reverted, since
1990, toaliberal policy which wasmore inkeeping withBenin 'spotential inthefields ofbusiness
andtrade andwhich hadalready begun toshow positive results. Economic growth, reduction inthe
public deficit andcontrol ofinflation inspiteoftheeffects ofthedevaluation oftheCFA franc in
January 1994wereparticularly worthy ofpraise inthattheywereachieved inadomestic andforeign
economic andpolitical context thatwasfairly difficult.
17. Benin 'seconomy remained veryfragile anddepended verylargely onworld cotton prices and
theevolution ofNigeria 'stradepolicy. Cotton exports alone represented morethanhalfofthecountry 's
totalexports, andclose to80percentofexports oflocalproducts, chiefly toBrazil, Morocco, the
European Union andafewcountries ofSouth-East Asia. Heasked howtheGovernment ofBenin
handled thefluctuation inworld cotton prices andwhatsteps itintended totaketofreeitselffromits
dependency.
18. Theproximity ofNigeria wasanimportant factor intheexistence anddevelopment ofthe
informal sector inBenin which, according totheReport bytheSecretariat, accounted forclose tohalf
ofthecountry 'sjobs. Thistrade largely depended ontheevolution ofeconomic andtrade policy in
Nigeria. Heenquired astotheGovernment ofBenin 'spolicy withrespect totheinformal sector, and
whether itcould beconsidered asadriving force behind liberalization.
19. TheBeninese authorities hadadopted anewInvestment Code which guaranteed, interalia,
freedom torepatriate capital, prohibited anynationalization measures andprovided taxconcessions
fornewinvestments. However, legislation onhiring anddismissal remained rigid, thejudicial system
wasoutdated,andcertainstrategicsectorswerestillsubjecttodefactoordejuremonopolies,particularly
inthefields ofairtransport, telecommunications andenergy. Inthecontext ofajointreview of
investment lawswithin theWAEMU, heasked what measures theGovernment intended totakein
order toboost foreign investment which, inviewoftheshortage oflocalcapital, remained theonly
possibility ofensuring sustained growth oftheeconomy.
20. Benin, aMember ofGATT since 1963 andaMember oftheWTO since 1996, wasalsoa
participant intheprocess ofeconomic integration bothatthecontinental level (Abuja Charter) and
attheregional andsubregional levels (ECOWAS andtheWAEMU), aprocess which included the
introduction bytheWAEMU countries ofacustoms union asof1998. Thisproject, designed tofavour
thedevelopment ofavastmarket capable ofpromoting investment, already rested onsolidfoundations,
since alloftheWAEMU countries shared asingle currency, theCFAfranc, andallhadconsiderable
experience inregional integration intheframework ofthenow-defunct WAEC.
21. However, unlike Benin andcertain othercountries inthesamesizecategory (forexample Togo),
theother, larger partners oftheUnion (Côte d'Ivoire andSenegal) continued toapply considerably
greater tariff andnon-tariff protection. Heasked whether themovement towards acommon external
tariff would result inasubstantial increase inBenin 'scustoms duties withtheconsequences onthe
country 'seconomic activities thatsuchameasure would inevitably entail. Theriskwasaggravated
bythefactthatBenin hadnotbound itsduties atthiscurrent levelwithin theWTO, astepwhich would
haveprovided acertain guarantee against theirincrease.
22. Thefirstdiscussant went ontoenquire astoBenin 'sexpectations from theforthcoming
High-Level Meeting ofLeast Developed Countries (LDCs) under theauspices oftheWTO, particularly
asconcerns market access.WT/TPR/M/27
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IV. STATEMENT BYTHE SECOND DISCUSSANT
23. Thesecond discussant, Mrs. Florence Dobelle, focused onquestions relating totrade policy
instruments, drawing adistinction between Benin 'sliberalization efforts, which required consolidation
incertain cases, andtheinitiatives tobelaunched atthenational orregional levels.
24. Theliberalization efforts hadbeen genuine, asregards bothtrade andimports, andthe
development ofinfrastructure andinvestment. Thedevelopment oftrade hadbeenstimulated bythe
elimination ofquantitative import restrictions in1988andofimport licensing in1991. Import duties
wereonaverage below 14percent. Thetaxsystem hadbeensimplified withtheintroduction ofVAT
in1991. Anational information system ontechnical barriers totrade hadbeensetup.
25. Thereremainedanumberofdifficultiesintheareaofcustomsvaluation,andcustomsprocedures
lacked transparency. Unlike certain other countries, Benin hadnotrequested anywaiver withrespect
totheAgreement onCustoms Valuation, theunderlying principles ofwhich were transparency and
non-discrimination involving, interalia,thepublication oftariffs, theexistence ofappeal procedures
forimporters andtheestablishment ofmethods forcustoms valuation. Tariff binding would alsohelp
toimprove thetransparency ofthetariffs.
26. Among theefforts made infavour ofinvestment, theNational Investment Fund, which involved
averyrestrictive system ofcompulsory contributions, hadbeenwound upin1996. Agreat number
ofpublic enterprises hadbeenprivatized. There werenotrade-related investment measures assuch.
Benin hadjoined theMultilateral Investment Guarantee Agency oftheWorld Bank in1993. Several
draftlawshadbeenprepared atthenational levelwithrespect toinvestment, government procurement
andcompetition, butunfortunately, noneofthese hadyetbeenadopted.
27. Certain aspects ofthe1990 Code were potential sources ofdistortion intheallocation of
resources, particularly among thedifferent categories ofprivileged investors (A,BandC),among
thefiveinvestment regimes, andowing tothelarge number oftaxconcessions forcertain investors.
There wasariskthatthese concessions would discriminate between direct investments inprofitable
sectors andinvestments inother sectors, suchaseducation andhealth, which didnotbenefit fromthem.
28. Replacement ofthesystem ofprior declaration offoreign investments byasystem ofapriori
notificationandtheeliminationofthetwo-monthdefermentsystemwouldcontributetoenhancingstability
andpredictability. Intermediaries should notbenecessary forforeign investors wishing tosetupin
Benin. Inamore general way, consideration should begiven totheexpected roleofinvestment in
thefishing,agro-industry,cerealstorage,mining,portservices,telecommunication,andfinancialservices
sectors, which constituted thedevelopment infrastructure ofacountry.
29. TheUruguay Round Decision infavour ofnet-food importing LDCs stipulated thatfull
consideration should begiven inthecontext oftheiraidprogrammes torequest fortheprovision of
technical andfinancial assistance toimprove theiragricultural productivity andinfrastructure. This
provision could beofgreat utility toBenin.
30. Shewentontoobserve theabsence inBenin ofcourts specialized intradelaw,andofemergency
andinterim relief procedures, afactthatcould wellblock economic development. Thislegalandjudicial
voidmeant, interalia,thatitwasdifficult forthebanks togrant credit owing tothelackofguarantees
ontheirloans. Violations ofintellectual property lawwerenotpunished. Itwasdifficult toappeal,
forexample, incases ofcustoms valuation andgovernment procurement. TheFund forEconomic
Promotion planned bytheWorld Bank could refinance loans andguarantee credits. Benin could take
advantage oftheprovisions oftheTRIPS Agreement, inparticular Article 67,which provides for
technical andfinancial assistance todeveloping country Members.WT/TPR/M/27
Page7
31. Intheframework oftheWAEMU, theissue oftheincrease intariffs wasessential, aswas
thequestion ofnon-tariff barriers andtheirremoval, already planned in1994within ECOWAS. Any
clarifications astotheWAEMU timetable fortheliberalization oftariff andnon-tariff barriers would
bewelcome. Atechnical assistance mission hadtaken place inBenin intheframework oftheITC,
UNCTAD andWTO integrated project withrespect totechnical barriers totrade andtheAgreement
onSanitary andPhytosanitary Measures. Theresults ofthismission could serve asareference point
intheframework oftheregional agreement.
32. Inconclusion, itwasverymuch inBenin 'sinterest tomake greater useofexisting WTO
instruments bybinding alloftheircustoms duties andtelecommunication services, butalsobytaking
greater advantage oftheprovisions oftheWTO Agreements infavour oftheLDCs. Itwould also
beinBenin 'sinterest toberepresented attheWTO onamore regular basis, perhaps within the
framework oftheWAEMU. Itwould thenbeable,interalia,toparticipate inthediscussions ofthe
WTO Group onTrade andInvestment.WT/TPR/M/27
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V. STATEMENTS BYMEMBERS OFTHE TRADE POLICY REVIEW BODY
33. TheMembers commended Benin 'scommitment tofreetrade andtheconsiderable progress
towards liberalization ofitseconomy, begun in1990. They welcomed thechange ofemphasis from
aninward toanoutward-oriented trade policy andencouraged Benin tocontinue towork towards
liberalization andconsistency withWTO obligations.
34. Therepresentative oftheEuropean Union stressed Benin 'sstatus asamember ofthegroup
ofleastdeveloped countries, andthespecial problems resulting fromthatstatus. Benin hadadopted
aseries ofreforms focusing onmacroeconomic stabilization, andtheresults hadbeenquiteremarkable,
asreflected intheincrease inpercapita GDP. Heencouraged theauthorities tocontinue their
liberalization efforts, thechiefjustification ofgovernment action being toraisethestandard ofliving
ofthecountry 'scitizens. Inthisconnection, heenquired astohowtheGovernment planned toproceed
from there.
35. Benin 'sefforts should bebacked byaidfromtheinternational community, including theWTO.
Inthatcontext, heasked what were theareas inwhich Benin would most benefit from technical
assistance. TheEuropean Union hadlongbeenproviding assistance, theresults ofwhich werereflected
inforeign trade statistics. Inparticular, ithadtransferred resources intheframework ofSTABEX
tocompensate forlosses ofrevenue inconnection withagricultural exports. AttheSingapore Ministerial
Meeting, theMinisters hadundertaken totackle theproblem ofthemarginalization oftheLDCs. A
study could beconducted ofthedevelopment oftradeinBenin attheHigh-Level Meeting onIntegrated
Initiatives forLeast Developed Countries 'sTrade Development inOctober 1997.
36. Inorder toreduce Benin 'sdependence oncotton exports, theWTO Members should openup
theirmarkets asmuch aspossible toimports fromBenin, inparticular, non-traditional imports. He
asked whatspecific measures hadbeentaken todiversify exports andabolish theprohibitions onexisting
exports.
37. Hewentontoaskabout theoutlook forreforming theinstitutional environment, inparticular
withrespect totheadoption ofnewlegislation inthefields oflabour, mining, trade, civilprocedures
andadministration. Heasked foranupdate ontheprivatization oftheSociété sucrière deSavé, of
theBrasserie d'Abomey, theSociété desciments d'Onigbolo andtheSociété national d'industrie des
corps gras.
38. Among thequestions focusing more specifically onthetrade regime, heraised theissue of
theelimination ofspecial import regimes. Heasked whether theGovernment andthepreshipment
inspection company applied theprovisions oftheAgreement onCustoms Valuation. Hejoined the
preceding speakers inenquiring astothenature andlevelofthecommon external tariff andwhen it
would enter intoforce, andasked whatBenin 'sliberalization plans were inservices sectors suchas
banking, insurance, telecommunications andtradeservices, which wereallessential tothedevelopment
ofacountry.
39. TherepresentativeofJapan,whileexpressingappreciationfortheBenineseGovernment'srecent
efforts inthefieldoftrade liberalization andeconomic reform, hadexpected theinformal sector of
theeconomy tobeaffected. Heasked whether theWTO hadbeennotified oftheAgreement establishing
ECOWAS, andrequested forclarifications regarding thecommon tariffplanned within theWAEMU.
Healsoenquired astotheprogramme fortheestablishment oftheAfrican Economic Community.
40. Hewentontoaskwhattypeoftechnical assistance Benin would needinorder toimplement
theprovisions oftheAgreement onCustoms Valuation. Hewished toknow whatproducts could be
imported onlybyapproved importers, andwhattheapproval criteria were. Asregards preshipmentWT/TPR/M/27
Page9
inspection, heasked whatinformation intheimporting country wasusedtoadjust theprices ofimported
goods andwhether itwasthelocalsalesprice. Heasked whether thenecessary adjustments weremade
onthebasis oftheprice intheexporting country. With respect tothenewLawonGovernment
Procurement, further details were required onthenational treatment clause andongovernment
procurement procedures, andheexpressed hisGovernment 'shopethattheywould respect theprinciples
ofequality andtransparency. Healsoraised questions withrespect torules oforigin.
41. Hethenturned tothesubject ofsectoral policies, andquestioned theauthorities onthe
justification oftheprohibition ontheexport foodstuffs. Noting thatportservices continued tobea
Statemonopoly, hewondered whether theremight beanyplans forprivatization, which would enhance
theircompetitiveness andefficiency. Asregards maritime transport, oneStatecompany hadexclusive
rights oncargo allocation. Thisraised thequestion astowhether thecriteria governing thechoice
ofshipping companies werebased onmarket access andnational treatment principles. Thereciprocity
measures intheareaofroadtransport negotiated inECOWAS hadnotbeenexempted under Article II.2
oftheGATS. Finally, hejoined certain other speakers instressing theimportance ofliberalizing the
financial service, airtransport andtelecommunication industries.
42. Therepresentative ofHong Kong, China expressed concern atapossible riseinMFN tariffs
arising from theWAEMU andasked tobeinformed ofanyrelevant developments aswellas
developments concerning government procurement. Healsoasked whether there wereanyplans to
reduce customs duties andstreamline border procedures, especially those relating totransit trade;
whether there wereplans toprivatize services sectors which wereunder Statemonopoly andwhether
Benin would amend therelevant legislation tocomply withitsGATS commitments inthehotelservices
sector.
43. Therepresentative oftheUnited States congratulated Benin onitseconomic andtradereforms,
which hadmade itpossible forBenin toincrease itsparticipation inworld trade. Healsoraised the
issues thathadbeenraised byprevious speakers concerning thepotential tariff increase under the
WAEMU, theneedtoapply theCustoms Valuation Agreement, investment restrictions inthemain
services sectors, prohibitions ontheexport ofteak, andcustoms administration. Heenquired asto
therulesofapplication ofthelegislation ongovernment procurement andasked Benin toconfirm that
itdidnotmaintain anytrade-related investment measures. Heencouraged Benin toparticipate inthe
negotiations thatwere under wayinthefieldoffinancial services bysubmitting anoffer before the
deadline of12December 1997.
44. Noting thatpersons wishing toimport goods intoBenin required animporter 'scardforwhich
theyhadtopay,andhadtocontribute totheChamber ofTrade andIndustry, heenquired astothe
advantages ofsuchtaxation forimporters. "Occasional" importers, whoaccounted for23percent
ofimports in1996, didnotpaythedifferent taxes, andhewondered whether theypaidimport duties.
Asample ofBenin 'stariff would helptoprovide United States exporters withprecise information.
Asregards VAT, hewondered whether theexemptions applied tocertain consumer products alsoapplied
toimports, andheenquired astotheshare ofimports inoverall annual VAT revenue.
45. Benin hadnotnotified theWTO ofitsintention torenegotiate itsconcessions made before
theUruguay Round, although important changes hadbeenmade. Heencouraged theauthorities to
bindtheirtariff atitscurrent lowlevel within theWTO sothatBenin could preserve itsroleasa
privileged transit centre forimports from theland-locked countries.
46. Hewent ontoaskwhen thedraftcopyright lawwould beratified andhowBenin intended
todealwiththeproblem ofinformal trade inapplying themeasures fortheprotection ofintellectual
property rights attheborder. With respect toworkers 'rights, henoted thatBenin hadratified most
oftheILOConventions, including Conventions No.87and98.TheConstitution ofBenin guaranteedWT/TPR/M/27
Page10
therightofworkers toform trade unions, toassemble andtostrike, andtheBeninese Government
respected these rights inpractice. Noting thatBeninese lawestablished theminimum working age
at14years, butthatthere werenotenough inspectors toensure thatthatprovision wasrespected, he
asked whether theauthorities hadanyplans toimprove compliance withthelegalprovisions applicable
tochild labour.
47. Therepresentative ofIndia waspleased thattheprovisions oftheWTO Agreement hadthe
force oflawinBenin, andregretted thegeneral absence ofreliable statistics ontheeconomy andtrade
asawhole. Hestressed thatinhisview, thequestion ofthefundamental freedom ofworkers was
notontheagenda oftheTPRB meetings.
48. Therepresentative ofCanada noted theremarkable progress oftheBeninese economy following
theeconomic andtradepolicy reforms, andexpressed interest intherecent developments withrespect
tothesingle window andtheintroduction ofnewcustoms legislation. Heasked whether theChamber
Trade andIndustry, which reflected theinterests ofindustry, alsotookaccount oftheinterests of
consumers andimporters. Finally, heencouraged theauthorities tointroduce, asrapidly aspossible,
courts specialized intrade matters, andappeal mechanisms.WT/TPR/M/27
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VI. REPLIES BYTHE REPRESENTATIVE OFBENIN AND ADDITIONAL COMMENTS
49. TheChairman invited therepresentative ofBenin toreplytothequestions raised insixdifferent
areas: (i)economic liberalization: progress andprospects; (ii)transparency issues; (iii)other specific
measures; (iv)sectoral aspects; (v)regional integration; and(iv)Benin within theWTO.
(i) Economic liberalization: progress andprospects
50. Therepresentative ofBenin replied thathisGovernment hadalways beenconcerned bythe
economy 'sdependence ononecrop, andhadtaken measures todiversify exports. Unfortunately, one
oftheconsequences ofthose measures hadbeentoswitch from single-crop dependence onpalm oil
tosingle-crop dependence oncotton, while theefforts made inthemining industries (oilandcement),
theagri-food industries (sugar, tomato concentrate, coffee andcocoa), andtextiles hadnotbeenas
successful ashoped.
51. Inthemanufacturing sector, programmes fortherehabilitation ofcertain factories hadbeen
conducted withthehelpofprivate operators anddevelopment partners, together withavastprogramme
fortherehabilitation ofthepalmoilsector. Newcashcrops, (pineapples, groundnuts, cowpeas, cashew
nuts) andfoodcrops were being developed, together withcassava.
52. More thanthreequarters ofBenin 'seconomic activities werecarried outonaninformal basis,
andalmost allsectors were concerned. Thus, theState wasdeveloping activities, sector bysector,
tohelpoperators toimprove theirproduction andtointegrate themselves progressively intotheformal
sector, particularly inthefieldofhandicrafts. Operators wereencouraged tojointrade associations
inorder tobeeligible forassistance programmes. Inthetrade area, thesimplification ofregulations
should provide them withanincentive tooperate intheformal sector. TheState counted onthe
dynamism ofthatsector forthecountry 'seconomic development.
53. The1990 Investment Code hadbeen adopted tocreate afavourable environment forthe
development oftheprivate sector. TheCode, which hadbeendescribed byinvestors asnotproviding
much incentive, needed toberevised. Indeed, itsscope ofapplication wastoorestrictive anditdid
notoffer special advantages toenterprises exercising activities thatwere considered bytheState to
havepriority. Theduration ofsuchadvantages wasdetermined byonesingle criterion, thelocation
oftheproject. Inviewofthese problems, theGovernment haddrawn upapreliminary draftrevision
oftheCode, broadening itsscope ofapplication toinclude, interalia,farms, tourism andhotelservices,
industrial maintenance andapplied research centres. Imported rawmaterials andpackaging were
exempted, provided theywere notavailable onthespotatequal prices forequal quality.
54. Inestablishing theduration oftheadvantages, thedraftrevision oftheCode alsotookaccount
ofpolicies intheareas ofland-use planning, employment andlabour supply aswellasthenature of
theactivity andtheamount oftheinvestment. TheGovernment wished tosimplify theapproval
procedure andensure regular follow-up oftheapproved enterprises bystrengthening theTechnical
Commission onInvestments. Strict quality control oflocal andimported goods wasalsoplanned.
Adegressive taxexemption system wastobeintroduced fortheapproved enterprises.
55. According totheauthorities, inviewofthepermanent competition among theStates ofthe
subregion inthatarea, thecustoms andtaxadvantages wereessential toattracting investors. Inthat
connection, during thefirstquarter of1997theChairman oftheWAEMU Commission hadorganized
aworkshop ontheprinciples andfuture model foraCommunity code. Benin would refrain from
adopting itsnewcodeuntiltheCommunity codehadbeenfinalized, inorder toavoid conflicting
provisions.WT/TPR/M/27
Page12
56. Intheframework ofitseconomic liberalization policy, theGovernment hadlaunched avast
reform programme aimed atcreating amore favourable environment forthedevelopment oftheprivate
sector, successively ratifying, in1993and1994, theConvention Establishing theMultilateral Investment
Guarantee Agency andtheTreaty Harmonizing Business LawinAfrica. TheGovernment hadentered
intobilateral negotiations ontheprotection ofinvestments withNigeria andMorocco, andwould soon
bedoing sowithSouth Africa.
57. TheCentre forBusiness Formalities, orSingle Window, hadbeen inoperation since
21August 1997. Anyentrepreneur could nowgothrough theformalities ofsetting upanenterprise
atonesingle place, morequickly andatlower cost. There wereplans tocreate aninvestment promotion
centre, which would serve asanefficient institutional framework withthehuman, material andfinancial
resources necessary toboost foreign anddomestic investments. Thecountry already mettheprincipal
conditionsforreceivinginvestments,i.e.politicalstability,ruleoflaw,economicliberalismandstrategic
geographical position.
58. Inconclusion, hestressed thatallofthementioned reforms hadbeen applied without
discrimination against foreign enterprises.
(ii) Transparency issues
59. Thedevelopment ofBenin 'seconomy rested essentially ontheprivate sector. Thedefinition
ofcustoms value currently inforce wastheBrussels definition. Thelegaltranscription andapplication
oftheWTO Agreement onCustoms Valuation andtheintroduction oftheHarmonized System would
takeplace within theframework oftheWAEMU together withanoverall tariff binding.
60. Anyenterprise thatfulfilled itsobligations vis-à-vis thetaxadministration andhadaregistered
office wasfreetoimport anygoods intoBenin without priorauthorization, withtheexception ofgoods
thatweredangerous tohuman health orstrategic fortheState. Theimport ofsuchgoods (medicaments,
chemicals, explosives, oilproducts, telecommunication equipment) required aprior authorization
delivered bythecompetent administrations.
61. "Occasional" importers whoturned upatcustoms without animporter 'scardpaidapenalty
of1percentonthec.i.f. value oftheimported goods inaddition totheusual duties andtaxes. The
purpose wastoencourage them tooperate intheformal sector. Inorder tolaythefoundations of
astrong anddynamic private sector, thedirectors oftheChamber ofTrade andIndustry ofBenin had
introduced amembership feefortheirnationals aswellasataxonimports.
62. Benin hadsigned acontract withaninspection company which controlled thepriceandquality
ofproducts before shipment. Ingeneral, theprice ofimported products wasdetermined according
totheprice applicable intheexporting country.
63. Under thetransit regime, theimporter hadonlytopaytheroadtax,thestatistical andcommunity
taxandtheroadtransit taxinorder toobtain therightoftransit forgoods through Benin. Thetaxes
were collected bytheState forthebenefit oftheCommunity.
64. TheTreatyHarmonizingBusinessLawintheWAEMUcompletedtheappealsstructuresalready
existing inBenin. Theruleoflawhadconfirmed theseparation ofthelegislative, judicial andexecutive
powers, andwasirreversible.
65. Therepresentative ofCanada asked whether theformulation oftrade policies andregulations
tookaccount oftheopinions ofconsumers, ofacademic researchers, andofthepublic ingeneral in
addition tothose ofthemembers oftheChamber ofTrade andIndustry.WT/TPR/M/27
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66. Thesecond discussant asked ifBenin intended tonotify theWTO oftheadoption ofthe
Harmonized System ofCustoms Classification.
67. Therepresentative oftheEuropean Union noted thattheBrussels definition wasstillusedfor
customs valuation, andrecommended theapplication oftheprovisions oftheAgreement onCustoms
Valuation. Henoted thatthepreshipment inspection agency determined prices inaccordance with
theprice applied intheexporting country. Healsotooknoteoftheexistence ofappeal procedures
withrespect toadministrative decisions.
68. TherepresentativeofBeninrepliedthattherepresentativesoftheChamberofTradeandIndustry
wereregularly consulted onmatters oftrade policy andregulations. TheWTO would benotified of
theadoption oftheHarmonized System.
(iii) Other specific measures
69. Therepresentative ofBenin stressed thathiscountry didnotprovide specific incentives atthe
national levelfortheprocessing oflocal rawmaterials. However, attheWAEMU andECOWAS
level, therulesoforigin imposed onproducers ofthemember countries acertain number ofregulations
withrespect tominimum content inelements ofcommunity origin inorder toobtain tradepreferences.
70. Theexport offoodproducts wasfree,andnotsubjected toanyrestrictions. TheGovernment
hadblocked teakexports inorder toensure thattheywere being carried outinaccordance withthe
regulations inforce. Investigations hadrevealed thatteakwasbeing cutinarandom manner inclassified
forests whose survival wasthreatened.
71. Thedraftlawongovernment procurement hadbeenvoted andpromulgated inAugust 1997.
Theimplementing Decree wascurrently being prepared andwould shortly besubmitted tothe
Government.
72. Thepolicy ofeconomic liberalization introduced inBenin in1990alsoconcerned theproduction
andmarketing ofservices. Thus, Benin nolonger hadanyState banks. Non-life insurance services
hadbeenliberalized, andthere hadbeenacallfortenders withaviewtoselecting thetechnical and
financial partners. Liberalization oftheoilsector hadincluded approval ofprivate distribution
companies, offering oftheshare capital oftheSociété national decommercialisation desproduits
pétroliers toastrategic investor andtheputting upforsaleof25percentoftheservice stations. The
State hadtransferred theHotel delaPlage andHotel Croix duSudtoBeninese andforeign private
investors, andhaddecided onastrategy forthewithdrawal oftheState from theBeninese-Nigerian
companies SCO(cement) andSSS(sugar). TheGovernment hadadopted theresults ofthenational
seminar onthereform ofthepostal andtelecommunication sectors andhadsetupacommittee toguide
thereforms.
73. Byratifying theUruguay Round Agreements, Benin hadautomatically become asignatory
totheTRIPS Agreement. TheCopyright Lawwasbeing revised tobring itintoconformity withthe
provisions oftheTRIPS Agreement. Inviewofthecomplexity ofthatAgreement, itwould beuseful
fortheBeninese Copyright Office, Beninese Customs andtheTechnical Directorate oftheMinistry
incharge ofcommunications toreceive technical assistance inorder tohelpthemcoordinate theirwork.
74. Therepresentative ofJapan asked forclarifications onthedraftlawongovernment procurement.
75. Inreply, therepresentative ofBenin stressed thatthedraftlawongovernment procurement
tookaccount ofthecomments made byBenin 'smain economic partners withaviewtoensuring the
greatest possible transparency. Ithadbeenprepared withthehelpoftheWorld Bank andtheIMF.WT/TPR/M/27
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Allgovernment procurement would besubject toaninternational callfortenders inorder toobtain
thelowest possible prices andtoavoid fraud.
(iv) Sectoral aspects
76. Benin 'seconomy waslargely aservices economy, andsome ofthose services hadbeenbound
within theframework oftheGATS. TheCompagnie béninoise denavigation maritime (Beninese
Maritime Shipping Company), aBeninese-Algerian company, didnothaveamonopoly. Allfreight
forwarding companies hadtheright tosignagreements withshipping companies. Thecompany
MAERK-LINE hadbeenauthorized tocarry outcargo handling operations onitsships, thusending
themonopoly oftheSociété béninoise demanutention portuaire (Beninese PortHandling Company).
Ithadchosen theportofCotonou asitsbulk-breaking harbour forthewestAfrican subregion.
77. Private operators could nowobtain theauthorizations formobile telephony. Tostrengthen
thefairly liberal financial system inforce inBenin, technical assistance would beneeded inensuring
theefficient preparation ofanoffer intheframework oftheWTO negotiations. Benin hadchosen
tourism asapriority sector which could bring inforeign exchange, andencouraged investment inall
areas thatcould helpittoattain thatobjective. There wasnorestriction oninvestment inthehotel
business.
78. Therepresentative ofUnited States asked whether Benin intended toimprove itsschedule of
specific commitments inthefieldoffinancial services within theGATS.
79. TheseconddiscussanttooknoteoftheliberalizationofmobiletelephonyinBenin,andsuggested
thatthecountry should alsoimprove itsschedule ofcommitments inthefieldoftelecommunications.
80. Therepresentative ofBenin replied thathiscountry wastrying tokeepupwiththeliberalization
trend inallsectors, andthatanytechnical assistance inthatrespect would bewelcomed.
(v) Regional integration
81. Therepresentative ofBenin noted thattheTreaty establishing theWAEMU hadentered into
forceon1August 1994following itsratification bytheParliaments oftheseven member States (Benin,
Burkina Faso, Côte d'Ivoire, Mali, Niger, Senegal andTogo). Thefundamental objective ofthe
WAEMU wastherapid achievement ofeconomic union. Tothatend,ithadcommitted itself to
strengthening thecompetitivity ofitsmember States intheframework ofanopenandcompetitive market
andarationalized andharmonized legalenvironment. Theconvergence oftheeconomic performance
andpolicies ofthemember States would bestrengthened byintroducing asystem ofmultilateral
monitoring. Acommon market among themember States would becreated onthebasis ofthefree
movement ofpersons, goods, services andcapital, andtherightofestablishment ofpersons exercising
anindependent orsalaried activity, andonthebasis ofacommon external tariff andacommon trade
policy.
82. Coordination ofnational sectoral policies would beintroduced through common actions and,
where appropriate, common policies, particularly inthefollowing fields: human resources, land-use
planning, transport andtelecommunications, environment, agriculture, energy, industry andmining.
Finally, theUnion 'sobjectives included harmonizing thelegislation ofmember States, particularly
taxsystems.
83. ThegoverningbodiesconsistedoftheConferenceofHeadsofStateandGovernment,theCouncil
ofMinisters, andtheCommission. Headquarters wereinOuagadougou, Burkina Faso. Theroleof
theConference ofHeads ofState andGovernment wasoneofguidance andgeneral communityWT/TPR/M/27
Page15
orientation. Itmetonceayear. TheCouncil ofMinisters wasmade upoftwoministers perState,
including theMinster responsible foreconomy andfinance whohadtherighttovoteonbehalf ofhis
country. Whenever itwascalled upon toruleonquestions ofsovereignty, theMinsters forForeign
Affairs werealsoincluded. TheCouncil ofMinsters oftheUnion adopted legalactswithrespect to
theimplementation oftheTreaty andcommon trade policy, wasresponsible fortheimplementation
ofthegeneral guidelines defined bytheConference ofHeads ofState, andcoordinated theeconomic
policies ofthemember States. Finally, ithadpower ofdecision inbudgetary matters which itshared
withtheCommission. Itmetatleasttwice ayear.
84. TheWEAMU Commission wasthecollegial executive body, made upofonerepresentative
ofeachmember State appointed forafour-year renewable term. TheGovernor oftheBCEAO and
hisrepresentativesatontheCommissionwithconsultativestatusinordertoensurethattheCommission's
discussions tookaccount ofrestraints connected withmonetary policy. Apart from theconsultative
body, theRegional Consular Chamber andtheParliament, allofthebodies hadbeensetupandwere
functioning normally. TheConference ofHeads ofStatehadmettwice, thefirsttimeinOuagadougou
on10May1996 andthesecond timeinLomé, Togo, on23June1997. Guinea Bissau hadbecome
amember oftheWAEMU on2May1997.
85. On27January 1995, theCourt ofJustice hadbeensetupinOuagadougou. Itwasmade up
ofseven judges appointed forsix-year renewable terms. Onthesame date,theCourt ofAuditors was
setupinOuagadougou withthree counsellors appointed foraperiod ofsixyears, renewable once.
On11May1996, atransitional Interparliamentary Committee hadbeencreated. Thefuture parliament
oftheUnion would haveitsheadquarters inBamako.
86. AttheConference ofHeads ofStateinMay1996, aResolution hadbeenadopted scheduling
theentry intoforce ofthecustoms union on1January 1998. Since 1July1996, import duties and
taxes onmanufactured goods from theUnion thathadbeenapproved forthecommunity preferential
taxhadbeenreduced by30percent, andthenagain by60percenton1July1997. There hadbeen
adecrease of5percentonimport taxes applied tomanufactured goods ofcommunity origin thathad
notbeenapproved. Handicraft products werefreeofallduties andtaxes. Allnon-tariff barriers to
trade between thecountries oftheUnion were lifted.
87. Thepurpose ofthecommunity solidarity levyhadbeentocompensate theleastdeveloped
countries forlosses attributable tothedismantling oftaxes, tobuild upreserves fortheUnion, to
encourage integrated development byfinancing infrastructures inthe"needy" countries, andtoensure
theoperation oftheCommission. Starting on1January 1998, theUnion would establish acommon
external tariffforallofthecountries. Inthatconnection amission known asthe"Regional Integration
Support Programme" hadgone from country tocountry within theUnion todetermine theratesin
forceineachcountry andtoassess theimpact ofacommon external tariffonthebudget ofeachmember
State.
88. Theaimoftheharmonization ofthedifferent legislations wastocreate afavourable legaland
fiscal environment forcompetitive andintegrated economic activity. Ithadthusfarconcerned three
different areas: taxation withrespect tosavings andsecurities; theWest African accounting system;
andtheCommunity Investment Code. Aworkshop hadbeen organized inMay 1997 withthe
participation ofdomestic andforeign economic operators, representatives oftheadministration and
development partners. Amission oftheCommission oftheWEAMU Financial Policy Department
hadbeenvisiting thedifferent countries oftheUnion since thebeginning ofJuly1997 withaview
toharmonizing thedomestic indirect taxsystems andsolving problems connected withexchange
regulation within theWEAMU. Theconclusions ofthatmission would helptoassess theprogress
achieved inharmonizing taxsystems within theWEAMU.WT/TPR/M/27
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89. TheUnion wasbeing created, butthecommon market wassomewhat delayed withrespect
totheoriginal calendar. Aslongastariffs hadnotbeenharmonized within theWEAMU, Benin, which
hadthelowest ratesintheUnion, would maintain those ratespending decisions tothecontrary atthe
highest State levelandwiththeagreement oftheNational Assembly.
(vi) Benin within theWTO
90. According totherepresentative ofBenin, market access remained thekeyobstacle tothe
development oftradeintheleastdeveloped countries, anditwasessential tothedevelopment ofworld
tradethataccess should beimproved. Benin 'sexpectations fromtheforthcoming High-Level Meeting
onleastdeveloped countries inOctober 1997 included anincrease inthecompetitive capacity ofthe
LDCs through training andinformation forprivate andpublic sector operators; themaintenance of
different treatment forLDCs during theentire transition period andanevaluation oftheassistance
promised tothosecountries; andthecreation ofaninternational system toprotect andencourage private
investment intheLDCs insupport oftheefforts bytheLDCs toattract foreign investment.
91. Itwasessential thatthetechnical assistance infavour oftheLDCs decided inSingapore in
December 1996 should become areality: while theresults oftheUruguay Round negotiations had,
onthewhole, beenpositive, thedeveloping countries, andinparticular theleastdeveloped countries
likeBenin, werenotinaposition toderive anynetbenefits fromthem intheshort term. Indeed, the
Uruguay Round Agreements hadgrouped together countries withvarying levels ofdevelopment and
hence withdifferent capacities forbenefitting from thenegotiations. Thelong-term survival ofthe
multilateral trade system depended onreducing current discrepancies. Temporary assistance in
balance-of-payments adjustment wasevery bitasnecessary tocounter thedecline inthetrade balance
andtheservice balance.
92. Beninneededtechnicalassistanceandaidinhumanresourcesdevelopment.Indeed,thedomestic
entities involved inimplementing theUruguay Round Agreements required assistance indeveloping
trade policy inorder toparticipate effectively intheactivities oftheWTO. Theassistance expected
from theWTO, fromtheITCandfrom UNCTAD should helpinensuring abetter understanding of
theprovisions oftheAgreement Establishing theWTO andtheAgreements inAnnex thereto; in
enhancing public knowledge ofthose Agreements; inlearning tradenegotiation techniques; intraining
Beninese craftsmen toimprove theirproduction byrespecting foreign market standards; infollowing
theperformance ofexport products onforeign markets; inproviding financial support intheframework
ofthepromotion oftradeandtourism; inimplementing aforeign tradedevelopment strategy forBenin;
andinintroducing software tocollect andprocess foreign trade statistics.
93. OwingtothefinancialconstraintsexperiencedbyBenineseenterprises,theywerenotinaposition
tocompete withmultinational enterprises. Consequently, theyneeded technical support inorder to
build uptheirmanagement capacity anddevelop theirhuman resources, including training women,
withaview tocreating management pools. Assistance toBenin should focus onstrengthening the
competitiveness ofitsenterprises. Thecreation ofatradepoint would enhance theefficiency oftrade
operations inBenin andcould include training programs forindustrial-sector managers.
94. Thesecond discussant tooknoteofBenin 'srequests fortechnical assistance inthefieldof
intellectual property, financial services, andpossibly telecommunications. Alistshould bedrawn up
oftheprovisions oftheWTO Agreements which called forpossible technical assistance, forexample
intheform ofasynoptic table.
95. Thefirstdiscussant highlighted theliberalization initiatives taken independently byBenin in
averyshortspace oftime. Thesupport oftheinternational community wasessential. Anynewround
ofWTO negotiations should establish technical assistance mechanisms sothatthedeveloping countries,WT/TPR/M/27
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inparticular theLDCs, could keepabreast oftheprogress made, make theircontribution andpossibly
participate actively through offers.
96. Therepresentative oftheEuropean Union wasconvinced thatthepresent meeting would provide
averyuseful contribution totheHigh-Level Meeting ontheLDCs tobeheldinOctober 1997.
97. Therepresentative ofBenin hoped thatallofhiscountry 'srequests forassistance would be
given dueconsideration bytheMembers oftheWTO. Benin wasanopenLDC which wanted tobuy
products throughout theworld atthelowest price andwithout anyrestrictions, andtotakeadvantage
ofanyavailable assistance toovercome itsunderdevelopment.
98. TherepresentativeofSecretariatsaidthatithadbeenapleasuretoworkwithBenineseauthorities
inpreparing thereview. Heobserved thatoverthepasttwodays, thedelegation ofBenin hadbeen
abletoestablish useful contacts withthedifferent divisions andcertain Members oftheWTO aswell
aswithUNCTAD andtheITC. Aspecific listofassistance needs would betransmitted tothedivisions
concerned.WT/TPR/M/27
Page18
VII. CONCLUDING REMARKS BYTHE CHAIRMAN
99. Thefirsttrade policy review ofBenin wasconducted bytheTrade Policy Review Body on
15-16 September 1997. These remarks, prepared onmyownresponsibility, areintended tosummarize
thediscussion andnottobeafullreport. Thisreport willbecontained intheminutes ofthemeeting.
Thediscussion developed under sixmain themes:
(i) Progress andprospects foreconomic liberalization
100. Benin wascommended ontheinstitutional reforms andpositive macroeconomic performance
since1990. These hadbeenreflected insolideconomic growth, improved public finances andamodest
rateofinflation. Some Members expressed concern about thehighdependency ofBenin 'stradestructure
oncotton exports, anditsvulnerability totradepolicy changes inNigeria. Inthisregard, theyinquired
about plans fordiversification ofexport products anddestinations. Members alsocommented onthe
large scaleoftheinformal sector; inquiries weremade about howitcould bebrought intotheformal
economy andwhether thismight easetheprocess ofliberalization.
101. Inregard tothelegal structure fortrade andinvestment, Members noted theongoing work
toenact various newlawsandsought information onprogress made. Notewastaken oftheadoption
ofanewinvestment codewhich, however, hadnotyetresulted insignificant investment flows. In
thisconnection, questions were raised concerning thescope forfurther simplification ofinvestment
procedures, including theadoption ofautomatic approval anda"single window".
102. Inresponse, therepresentative ofBenin noted hisgovernment 'slong-standing concern over
thecountry 'sdependence onasingle crop, andcontinued efforts todiversify theeconomy, particularly
agricultural production. Henoted thatthree-fourths ofalleconomic activity takesplace intheinformal
sector, which theGovernment considered akeyelement tosupport Benin 'sgrowth. Thus, avast
programmewasinplacetoprovideaproperframeworkforinformalactivities,andeventuallyincorporate
them intotheformal economy.
103. Therepresentative ofBenin recognized theneedtoreview theInvestment Code of1990. The
draftrevision contained plans toabolish several sectoral restrictions, andtoincrease thenumber of
fiscal andother privileges. Inorder toensure consistency ofapproaches within theWAEMU, Benin
would change itscurrent investment legislation onlyaftertheUnion decided onaregional code. It
wasalsonoted thattostrengthen itsinvestment framework, Benin hadsigned orwasnegotiating various
bilateral andmultilateral investment agreements. TheGovernment wasalsoworking onthecreation
ofanInvestment Promotion Centre. Therepresentative stressed thatthenewinitiatives made no
discrimination between foreign anddomestic investors.
(ii) Transparency issues
104. Members commented favourably upon Benin 'sclear andsimple tariff structure. However,
questions wereraised onthepublic availability ofthetariff schedule. OneMember requested acopy
ofthetariff schedule. Concern wasalsoexpressed overthecomplexities ofcustoms andpreshipment
inspection procedures, including themechanism usedforestablishing import prices. Inthisregard,
questions wereasked about Benin 'splans toimplement theHarmonized System ofClassification and
theWTO Customs Valuation Agreement. Itwasnoted thatBenin hadnotnotified anydelay inthe
application oftheAgreement under itsArticle 20.
105. Questionswerealsoraisedovertheproceduresforregistrationofimporters,especiallyregarding
thestatus of"occasional" importers (importateurs occasionnels )withregard toborder andinternal
taxation, thelistofgoods reserved toapproved importers (importateurs agréés ),aswellastheWT/TPR/M/27
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requirement formembership intheChamber ofCommerce andrulesapplied togoods intransit. Some
Members noted theabsence ofaneffective appeal mechanism against administrative decisions andurged
Benin toupdate itslegalstructure inthisregard.
106. Inresponse, therepresentative ofBenin outlined therequirements fortheregistration of
importers, goods intransit, andtheoperation ofthepreshipment inspection mechanism. Hesaidthat
hiscountry usedtheBrussels definition ofcustoms value andthatthecustoms tariffwasreadily available
tothepublic. TheHarmonized System hadalready beenadopted, andthenewcodebeing printed
usedthatclassification.Customsproceduresweretransparent,andthiswouldbeenhancedbytheeventual
binding oftariffs atthelevelofthewhole WAEMU. Domestic legislation toapply theWTO Customs
Valuation Agreement would alsobeadopted within theframework oftheWAEMU. "Occasional"
importers without animport cardboreapenalty of1percentofthec.i.f. value ofgoods overand
above usual tariffs andtaxes, toencourage them tomove intotheformal sector. Prices established
bythePSIinspection company weregenerally based onthose intheexporting country. TheUnion 's
treaty fortheHarmonization ofBusiness Rights complemented Benin 'sappeal mechanisms against
administrative decisions.
(iii) Other specific measures
107. Generally, Members appreciated theconsiderable stepstaken byBenin toliberalize itsimport
markets, andtoreduce export restrictions. Benin wasurged tocontinue itstrade liberalization and
toembed itwithin therulesandprinciples ofthemultilateral trading system byincreasing itsbinding
commitments.
108. Concernwasexpressedoverthelackofclearlegislativeguidelinesforgovernmentprocurement.
Inthisrespect, information wassought onthepresent status ofthedraftlawongovernment procurement.
109. Questions were raised overthejustification forthecontinuing export banonfoodproducts
(produits vivriers) ,andabout plans forthefuture liberalization ofremaining statemonopolies. Details
werealsorequested onBenin 'suseofrulesoforigin under theWAEMU Agreement. Members sought
confirmation thatBenin maintained noinvestment schemes notifiable under theTRIMs Agreement.
They alsorequested information onthelegal framework for,andpractical application of,Benin 's
intellectual property legislation.
110. Inresponse, therepresentative ofBenin noted thatBenin didnotmaintain anylocalcontent
requirementsoutsidethosecontainedintherulesoforiginundertheWAEMUandECOWASAgreements
inorder toqualify forpreferential treatment. There wasnobanonexports offoodproducts. Teak
exports hadbeenregulated toprevent thedestruction ofprotected forests. TheLawonGovernment
Procurement hadbeenvoted andpromulgated inAugust 1997, andtheimplementing decree would
besubmitted toParliament shortly. Copyright legislation wasunder review toensure conformity with
theTRIPS Agreement. Inthisrespect, hecalled forassistance toensure coordination between Customs,
theCopyright Bureau (BUBEDRA) andtheMinistry incharge oftelecommunications.
(iv) Sectoral elements
111. Participants sought Benin 'sviews ontheroleofforeign direct investment intheeconomy,
notably inthefoodprocessing sector andinmining. Some suggested thatBenin might takeadvantage
oftheWTO Decision infavour ofleastdeveloped andnetfood-importing developing countries, which,
interalia,envisages assistance towards improvements inagricultural productivity andinfrastructure.
112. Some sought information onprogress inreforming Benin 'slegalstructures soastoliberalize
themainservicesindustries,includingfinancial,maritime,airtransportandtelecommunicationservices.WT/TPR/M/27
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Theynotedthat,asanessentialpartofthedevelopmentofinfrastructure,thetelecommunicationsservices
industry would benefit fromforeign investment. While amove away fromthecurrent duopoly inair
transport could leadtolower freight costs. Benin wasasked toconsider binding itscurrent, liberalized
financial regime, aswellasmobile telecommunications, intheongoing WTO negotiations onfinancial
services andbasic telecoms. Confirmation wassought thatforeign investment inhotels isallowed,
asbound byBenin under theGATS.
113. Inresponse, therepresentative ofBenin noted thatmost production andtrade activities had
beenprivatized, including banks, non-life insurance, petroleum production andhotels. Portactivities
hadalsobeendemonopolized, andprivate operators weretobeauthorized formobile telephony; further
reforms inthetelecommunications sector wereinplanning. Private investment wasbeing sought in
theareas oflifeinsurance, petrol distribution, cement andsugar production. Technical assistance was
needed tobindBenin 'slegislation under theWTO Services negotiations currently under way. He
confirmed thattherewasnorestriction inforeign investment inthehotelsector; tourism wasapriority
development sector andcertain state-owned hotels hadalready beenprivatized.
(v) Regional integration
114. MemberstooknoteofBenin'srecenteffortstoincreaseparticipationinregionaltradeagreements,
including thecustoms union planned among WAEMU countries. Inthisrespect, many participants
asked about theprospects fortheunion, itsexpected timing, andwhether itwould leadtotheabolition
ofnon-tariff measures andthecreation ofaninternal market within theunion. Members emphasized
theriskthatthetariff convergence required byacustoms union could leadtoMFN tariff increases
inBenin. They viewed anysuchincrease asdetrimental toBenin 'seconomy, andsuggested theuse
oftariff bindings under theWTO toreduce suchrisk. Questions were asked regarding thecurrent
stateoftariffandnon-tariff liberalization under ECOWAS, andwhether thisagreement hadbeennotified
totheWTO.
115. Inresponse, therepresentative ofBenin declared thatWAEMU 'sfundamental objectives were
toensure rapid convergence towards aneconomic union, withacommon market based onthefree
circulation ofpeople, goods, services andcapital. Important achievements todateincluded theremoval
ofallnon-tariff barriers tointernal trade, andaconsiderable tariffreduction oninternal tradeinagreed
products. Theestablishment ofacommon external tariff wasplanned for1January 1998.
Harmonization oflegislation wasalsounderway intheareas oftaxation, accounting procedures and
investment. Acertain delay hadoccurred intheimplementation oftheUnion. Meanwhile, Benin
intended tomaintain itsleveloftariffs, which wasthelowest ofWAEMU countries; theNational
Assembly would havetoratify anychange intariffs resulting from decisions oftheUnion.
(vi) Benin inthemultilateral trading system
116. Members highlighted Benin 'sstatus asaleastdeveloped country, anditsconcomitant special
position within themultilateral trading system. Itwassuggested thatwaysshould befound ofensuring
more regular participation byBenin inthework oftheWTO. Inthisconnection, Benin wasasked
about itsexpectations fromtheforthcoming HighLevel Meeting onLeast Developed Countries, notably
regarding market access. Participants alsoinvited Benin tospecify itsneeds fortechnical assistance
inorder tobenefit most from WTO Agreements.
117. Inresponse, therepresentative ofBenin hoped thattheHighLevel Meeting onLeast Developed
Countries would result incommitments toimprove access tomarkets, increase thecompetitive capacity
ofLDCs through training andinformation forprivate andpublic sector operators, andcreate asystem
toprotect andencourage investment inLDCs. Hestressed theneedtomaintain differential treatment
fordeveloping countries during thetransition period, andtoprovide effective assistance toLDCs.WT/TPR/M/27
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Inhisview, thesurvival ofthemultilateral trading system depended onitscapacity toreduce inequalities
andincrease trade onthebasis ofeachmember 'scomparative advantage. Hetherefore called fora
concrete programme ofassistance andinformation toLDCs toimplement theWTO Agreements,
participate infuture negotiations, trainproducers tosatisfy international standards inexport markets
andprepare strategies forthefuture development oftrade, andprovided alistofspecific areas inwhich
Benin would require suchassistance.
*
* *
118. Members welcomed theimportant steps taken inrecent years byBenin towards amore open
andliberal economy, through constitutional, legislative andadministrative reforms andprivatization
programmes. They emphasized theimportance ofdiversification oftheeconomy andtheneedfor
development tobepursued onasustainable basis. Members alsostressed theimportance offurther
steps toincrease predictability, transparency andcertainty inBenin 'strade practices. Theneedfor
improved access invarious fields ofservices wasparticularly noted. Overall, Members offered strong
encouragement toBenin tocontinue andaccelerate thereform process inalleconomic areas and
responded positively toBenin 'srequests forassistance intheframework ofWTO activities.