WT/TPR/S/79 Trade Policy Review
Page 10
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES
(1) INSTITUTIONAL FRAMEWORK
1. Mozambique has been an independent republic since 1975.  The Constitution of the Republic
of Mozambique was adopted in November 1990.  In 1994, a multi-party system was introduced.
2. The Constitution calls for a parliamentary form  of government with a separation of power
among the executive, legislative, and judicial branches.  The Republic Assembly is unicameral.  TheSpeaker, elected by secret vote by the Assembly, convenes and chairs sessions of the Assembly, signs
laws adopted by the Assembly, and submits them to the President .
3. The President and members of the Republic Assembly are elected by direct vote for five-year
terms, and may serve only two terms consecutively.  The President serves as Head of State and is the
Chairman of the Council of Ministers .
4. The President selects and appoints a Prime Minister, usually from the party holding the
majority.  The Prime Minister is not a member of the Republic Assembly.  The President can dismiss
the Prime Minister.  The President selects the members of his cabinet (the Council of Ministers) on
the advice of the Prime Minister.
5. Mozambique has a three-level judiciary.  Appeal is from the district courts through the
provisional courts to the Supreme Court.  Mozambique also has an Administrative Tribunal with
jurisdiction over issues pertaining to conformity with the Constitution of laws and the Government's
enforcement of laws.  The President appoints the president of the Supreme Court and some of the
members of the Supreme Court;  the remainder are appointed by the Assembly.  The President
appoints all of the members of the Administrative Tribunal, including its president.
6. For administrative purposes, Mozambique is divided into ten provinces:  Niassa, Cabo
Delgado, Nampula, Zambézia, Tete, Manica, Sofala, Inhambane, Gaza, and Maputo Province.  TheGovernment is committed to further decentralization in the future.
(2) F
ORMULATION AND IMPLEMENTATION OF POLICIES
7. The Council of Ministers, as the Government's highest executive body, is responsible for the
planning and formulation of government policy.  The Council's role is to aid and advise the President .
The Council of Ministers sets forth new laws and changes to laws (decrees), and delegates regulatoryauthority and administration to relevant ministries.
8. The ministry in charge of trade policy formulation is the Ministry of Industry and Trade.
Other agencies with trade policy responsibilities include the ministries of Planning and Finance,
Agriculture and Fisheries, Tourism, Mineral Re sources and Energy, Transport and Communication, as
well as the Bank of Mozambique, Customs Department, Office of Privatization, InvestmentPromotion Center, Export Promotion Agency, and the National Directorate for Industrial Property .
There are no formal coordinating bodies for the formulation and implementation of trade policy .
9. The private sector, academic institutions, and unions provide input into trade policy issues
through on-going informal consultations during the policy formulation phase.  Draft trade policy
documents are widely circulated for comment to these entities.  Comments on trade policy are alsosought from other stakeholders in the public sector  prior to finalization and submission of trade policyMozambique WT/TPR/S/79
Page 11
to the Cabinet for approval.1  Since 1994, there has been an annual private sector–government
conference that formalizes this process.  The conference proceedings are published.2
10. The Mozambican legal system is based on Portuguese and Roman law.  The hierarchy of
Mozambican legal instruments is as follows:  the Mozambican Constitution is supreme.  In
descending order of importance are laws of the Republic Assembly, decrees setting out the regulations
implementing the laws, ministerial diplomas, and dispatches .
11. The Republic Assembly ratifies international agreements and treaties.  Once an agreement or
treaty is ratified, the Assembly brings domestic la w into conformity with the international agreement
or treaty.  Therefore, the WTO Agreements do not have the force of law, but are implemented through
the legislative process.
12. Trade policy implementation is primarily the responsibility of the Ministry of Industry and
Trade, which is responsible for regulating imports, pr omoting exports, ensuring fair trade, protecting
certain intellectual property rights, and setting and enforcing standards.  The Ministry also has
responsibility for regional initiatives such as the Southern African Development Community (SADC)
and the Cross-Border Initiative (CBI), as well as the WTO and most other multilateral trade issues.
The Ministry of Planning and Finance is responsible for the collection of taxes and import duties .
Other ministries have responsibility for trade issues that fall within their overall responsibilities (e.g.,
the Ministry of Agriculture and Fisheries).  There are no independent bodies with a formal mandate to
carry out public review and assessments of the Government's trade policy.
(3) POLICY OBJECTIVES
13. The Government has demonstrated strong commitment to poverty reduction since the civil
war ended, in 1992, when it embarked on a sustained effort of reconstruction, reconciliation, and
democratization.  This commitment has included significant steps to reform and liberalize its
economy and encourage domestic and foreign investment.  During the 1990s, economic policy
focused on stabilization aspects, although in recent years the Government has embarked upon policies
aiming at the transition to structural adjustment.  This effort has included major steps to reduce
barriers and to promote the private sector.
14. As part of its effort to modernize its government policies, Mozambique adopted a formal
Trade Policy and Strategy (TPS) in April 1999.3  In February 2000, Mozambique was one of the first
countries to prepare an Interim Poverty Reduction Strategy Paper (PRSP) for the World Bank and the
IMF.  This paper is a medium-term development programme that puts the elimination of poverty as
the most important factor in its development strategy.  The earlier TPS, however, was formulated in
light of the fundamental objectives of promoting economic and social development and eliminatingpoverty in Mozambique.  The TPS addresses both internal commerce and international trade, and is
based on private initiative, on market forces, and on the regulating and facilitating role of the State.
15. While there is no mention of the World Trade Organization in the TPS, Mozambique's efforts
are in keeping with WTO commitments, where they apply.  The TPS creates trade policy priorities,
identifies the role of the State, and sets out an implementation strategy that includes promotion ofexports, measures related to imports, and the revision of trade legislation and simplification of
administrative procedures.
                                                     
1 Mozambique's presentation on its trade-rela ted technical assistance needs-assessment,
WTO document WT/COMTD/IF/29, 6 April 1998.
2 See, for example, Ministry of Industry and Trade (1999a).
3 Ministry of Industry and Trade (1999b).WT/TPR/S/79 Trade Policy Review
Page 12
16. Mozambique is also committed to the process of regional integration, and is pursuing closer
ties with neighbouring African nations.  It has been active in the negotiations to create a SADC
free-trade area through the implementation of a Trade Protocol and a SADC tariff schedule.  It is
expected that Mozambique will implement the S ADC Trade Protocol in the first quarter of 2001.
Negotiations on the SADC tariff schedule are ongoing.
(4) LAWS AND REGULATIONS
(i) Trade legislation
17. Mozambican legislation relating to international trade is contained in various statutes.   The
most important is the Customs Tariff Act of 1999, which regulates import procedures, the
computation of duties, and exemptions and remission of duties, and contains the newly enacted tariff
schedule (Harmonized System, eight-digit level) .  Also of special importance is the Business
Licensing Act of 1998 (Table II.1).
Table II.1
Mozambique's trade-related laws
Law Area
Customs Tariff Act, Decree No. 30 of 24 May 1999 Customs
Business Licensing Act, Decree No. 43, 1998 Licensing of businesses
Ministerial Diploma No. 20 of 25 November 1998 Preshipment inspection
Investment Act of 1998, Law No. 3 Foreign investment
Mining Act of 1996, Law No. 2 Mining and foreign investment
Petroleum Exploration and Production Act of 1981, Law No. 3 Petroleum
Decree No. 2 of 24 March 1993 National Standards Institute
Decree No. 18 of 4 May 1999 Intellectual property
Financial Laws Act, Law No. 15 of 1 November 1999 Financial services
Insurance Act, Decree-Law No. 3 of 13 January 1977, and
Ministerial Diploma No. 129 of 15 December 1999Insurance regulation
Value Added Tax Act of 1 June 1999 Taxation
Source: Information provided by the Mozambican authorities.
(ii) Basic law and regulations for corporate registration
18. In order to operate in Mozambique, a person, whether an individual or a company, must
register a local residence either by incorporatin g a Mozambican company or through the designation
of a local agent, which in Mozambique is known as a commercial representation.  This registration or
establishment of a Mozambican entity is a prerequisite to activities such as the opening of a bank
account, obtaining an import licence, and import duty exemption certificate.4
19. There are two basic types of Mozambican companies:  Sociedade por quotas,  which is
roughly equivalent to a limited partnership or private limited company;  and sociedade anónima,
which is similar to a public stock or share holding corporation.  The sociedade por quotas  may be
established with only two shareholders, while the sociedade anónima  requires a minimum of ten
shareholders except where the state is a shareholder, in which case it may be established with anynumber of shareholders subject to Minist ry of Planning and Finance approval.
                                                     
4 Law No 6/98 of 15 June;  Decree No. 43/98 of 9 September;  Decree No. 44/98 of 9 September;  and
Ministry of Mineral Resources and Energy (1998a), page 8.Mozambique WT/TPR/S/79
Page 13
20. Once the company or commercial representation is established, it is registered with the
Commercial Registry, the Ministry of Planning a nd Finance (as tax authority) and with the Ministry
of Industry and Trade.  These registrations are necessary prerequisites for, among other things, the
acquisition of the import and export exemption certificates from the customs authority.  Once a
company is registered, regardless of whether its owners are nationals or foreign, it is treated as a
Mozambican company.
(iii) Investment code
21. Mozambique has undertaken significant efforts to encourage foreign direct investment in its
economy.  Beginning in 1987, the Government embarked on a process of economic reform and
privatization with the intention of creating an investment climate attractive to foreign investors (the
Economic Rehabilitation Programme (PRE)).  With a few exceptions, 100% foreign ownership ispermitted in most sectors, including commercial bank ing.  There is no private ownership of land, long
term leases from the Government being the norm.  There is no distinction between foreign and
national companies in leasing land, as long as the company is registered in Mozambique.
22. Private foreign investment in Mozambique is governed by Law No. 3 of 24 June 1993, which
replaced earlier laws of 1984 and 1987.  Investment in Mozambique is divided into three autonomousareas regulated by separate schemes.  The generally applicable investment law specifically excludes
from its purview the petroleum and the mineral resource extractive industries
5, each of which has its
own specialized tax, accounting, and investment regulations.
23. The Act does not apply to the production of electrical energy for public consumption, the
public supply of water in urban centres, the operation of postal services and public
telecommunications, the development and operation of national parks, or the production, distribution
and trade in arms and munitions.
24. The Investment Promotion Centre (CPI), which reports to the Minister of Planning and
Finance, is responsible for implementing the law.  The CPI was established in 1993 and deals with
both foreign and local investment.  It is responsible for coordinating the promotion, analysis,
follow-up, and verification of investments.  Though partially subsidized by the Government, the CPI
charges companies for its services.  As part of a policy change, the share of the costs paid by clients isexpected to increase.
25. An entity needs to be legally established and registered as a Mozambican business with the
Ministry of Trade before being able to receive a certificate of investment.
26. The 1995 Decree on investment was approved with  the intention of making certain customs
and fiscal benefits more attractive both to national and foreign investors.  These benefits includecustoms and fiscal benefits as discussed below.
27. Investments in new undertakings benefit from exemption of payment of customs duties on
equipment goods classified in the "Customs Manual" in "K" Class.  Imports involved with
expansions, rehabilitation or modernization, or a new company formed through reorganization are not
eligible for this exemption.  These benefits exist only when the goods to be imported are not producedin Mozambique or, if produced, are not available at similar quality and price conditions.
                                                     
5 The basic relevant documents are Law No. 3/93 of 24 June;  Decree No. 14/93 of 21 July, as amended
by Decree 36/95 of 8 August;  and Decree No. 24/88 as amended by Decree 13/93 of 21 July.WT/TPR/S/79 Trade Policy Review
Page 14
28. Investments in provincial capitals in new undertakings or in the rehabilitation of existing ones
due to obsolescence benefit from a reduction of 50% of Industrial Contribution Tax and
Supplementary Tax rates, during the period of reco very of the investment made, but not exceeding ten
fiscal years from the start of operation.  In certain provinces (Niassa, Cabo Delgado, and Tete), the
reduction is 80%.  Outside of provincial capitals, the reduction is 65%.  Special incentives exist for
undertakings destroyed by acts of war.  These incentives can be extended for certain periods at lowerrates;  these vary by province.
29. Table II.2 provides detailed information on the investment projects approved in 1999 and the
projected employment involved.
Table II.2
Investment projects approved in 1999, and projected employment
Value
(US$)Total Employment
BranchNumber of
projects Foreign
investmentInvestment by
nationalsValue
(incl. loans)Per cent Number Per cent
Agriculture and
agri-business55 10,192,614 7,485,629 238,871,039 31.13 8,040 38.54
Transport and
communication20 698,655 2,646,880 23,655,950 3.08 778 3.73
Tourism and hotels 20 8,426,400 7,143,115 103,180,866 13.45 1,406 6.74
Fishing and aqua-
culture12 62,004,964 54,870,939 148,314,940 19.33 730 3.50
Industry 65 19,079,190 17,239,886 170,903,377 22.27 4,846 23.23
Construction and
public works21 8,179,780 3,215,563 34,796,513 4.53 2,161 10.36
Mineral resources 1 n.a. 10,250 582,324 0.08 16 0.08
Banking, insurance
and leasing5 310,056 7,017,185 8,087,393 0.05 75 0.36
Other 35 14,063,754 6,072,084 39,000,183 5.08 2,811 13.47
TOTAL 234 121,955,413 105,701,532 767,392,586 100.00 20,863 100.00
n.a. Not applicable.
Source: Investment Promotion Center (2000a), Situação de Investmento Autorizado,  Maputo, January.
(iv) Mining
30. In Mozambique, minerals and other natural resources, including land, are the property of the
State, which controls their use and licensing.  This principle is set down in the Constitution and is
reiterated in the legislation governing the mineral sector, namely the Mining Law and its regulations.6
Within the Government, the Ministry of Mineral Resources and Energy has administrative and
regulatory responsibility for mineral resources.  Administration of mineral licensing procedures is
carried out within the National Directorate of Mines.
31. As with other sectors of the economy, the Mozambican Government has undertaken
significant efforts in the mining sector to encourage foreign investment.  The Government recognizes
that Mozambique does not have the necessary industrial and manufacturing base either in terms ofsupply of plant, equipment, and other goods, all of which need to be imported, or in terms of domestic
use, as the sector is generally export oriented.  Additionally, Mozambique recognizes its lack of
infrastructure in general, and in particular where most mineral deposits are located.
7  A s  a  r e s u l t ,
                                                     
6 Law 2/86 of 16 April and Decree No. 13/87 of 24 February, as amended.
7 Ministry of Mineral Resources and Energy (1998a), page 4.Mozambique WT/TPR/S/79
Page 15
Mozambique has created a fiscal policy intended to stimulate investment aimed at balancing or
neutralizing the country's shortcomings or negative factors.  The Government is currently reviewing
its incentives for investment in this sector and intends to create new polices soon.
(v) Petroleum
32. Investment in the petroleum field is governed  by Law No. 3/81 of 3 October, which defines
the basic framework for the licensing and conduct of petroleum exploration, development, andproduction.  Decree No. 14/82 of 3 December provides income tax rules including exemptions and
other investment incentives, and Diploma No. 49/83 of  8 June provides supplementary rules for the
assessment and collection of those taxes.
33. The National Oil Company (ENH) has exclusive rights for the exploration, development, and
production of petroleum and gas.  Third parties may carry out these activities in association with, oron subcontract from, ENH.  To date, petroleum oil exploration has taken place under the form of a
production-sharing joint-venture agreement, while natural gas exploration and development have
taken the form of a profit-sharing venture.  Petroleum activity has its own specialized tax regime.
This regime was designed for petroleum oil and not ga s;  it is under review to bring it into line with
current industry practices.
(vi) Export processing zones
34. Legislation allowing for the establishment and operation of export processing zones (EPZs)
was adopted on 21 September 1999 (Decree No. 62/99).  The first such EPZ is intended to be
Beluluane Industrial Park, located 15 km. from the centre of Maputo.  Additionally, the major
aluminium smelter, Mozal, which will come on stream in 2001, is itself an EPZ.
35. An enterprise that exports 85% or more of its annual production, employs at least 20
Mozambican workers (as long as there exist at least 500 permanent jobs for Mozambican workers inthe EPZ), and is considered by the Government to contribute positively to the national economy, is
eligible to apply for EPZ status.  Entities operating in EPZs are permitted to sell 15% of their previous
year's production into the local market, but must pay the normal duties and taxes on those sales.
Incentives under the EPZs include:
- exemption from import duties on goods and merchandise destined for the
implementation of licensed investment and production activities;
- exemption from value-added tax (VAT) and specific consumption tax (a tax on
certain luxury and related items);
- exemption from corporate income tax on in come from licensed activities, as well as
certain property taxes and the property transfer tax, with the exception of thewithholding tax on distributions (currently 18%);
- for customs purposes, an EPZ is treated under Mozambican law as if it were offshore;
as a consequence, transfers of goods within or between EPZs are not subject to
ordinarily applicable value-added or other transaction-specific taxes;
- significant hiring flexibility while maximizing incentives to employ Mozambican
workers.  For example, EPZ companies may hire either Mozambican managers or, if
none with the requisite skills are available, foreign managers, during the first seven
years of operation.  They may also hire foreign skilled labourers if no skilledWT/TPR/S/79 Trade Policy Review
Page 16
Mozambican labourers are available during this same period.  However, in no event
may foreign workers exceed 15% of the total number of workers employed at an EPZ
company;  and
- allowance to hold and operate foreign currency accounts within and outside
Mozambique.
36. Certain industrial activities are not authorized to be located in EPZs, namely prospecting and
extracting natural resources;  processing of raw cashews;  domestic fish processing, including shrimp;
or other activities reserved to the State.  Also prohibited are the production of alcoholic drinks and
tobacco and its by-products (except under certain conditions).  The processing of precious stones and
skins, weapons, ammunition, fireworks and explosives will only be authorized if at least 25% of the
raw material incorporated is of local origin.
(vii) Special regimes
37. A special regime has been created to encourage investment in the Zambesi River Valley.
This regime involves many districts in Tete, Zambézia, Sofala, and Manica Provinces.  Among the
incentives of the regime are:
- exemption from import duties on goods in certain Customs Tariff categories when
destined for new enterprises or the rehabilitation or expansion of existing enterprises;
- exemption or reduction from Corporate Tax and various withholding taxes;  and
- exemption from Real Property Transfer Tax.
38. Other free zones have been approved for the Port of Porto Dobela and for the Beira Free Zone
and Iron and Steel Factory, but these projects are in very preliminary stages.
(5) TRADE AND INVESTMENT AGREEMENTS AND ARRANGEMENTS
(i) Multilateral agreements
39. Mozambique signed the Final Act of the Uruguay Round and the Marrakesh Agreement
establishing the World Trade Organization on 15 April 1994, and became a member of the WTO on
26 August 1995.  Under the Single Undertaking, al l WTO Multilateral Agreements were to become
binding on Mozambique.  Mozambique grants at least most-favoured-nation treatment to all its
trading partners.
40. As a developing country, Mozambique benefits from a transition period to implement a
number of its commitments under various WTO Agreements .  Mozambique has, pursuant to
Article 20.1, notified the delayed application of the Agreement on Customs Valuation.  It appears that
Mozambique intends to implement the Agreement on Customs Valuation by end 2000.
41. Table II.3 shows Mozambique's status in relation to notification requirements under the WTO
Agreements as of August 2000.Mozambique WT/TPR/S/79
Page 17
Table II.3
Selected notifications by Mozambique pursuant to the WTO provisions
Agreement Article/instrument imposing
obligationsWTO document and date Requirement
Agreement on Technical
Barriers to TradeAnnex 3(c) G/TBT/CS/N/69
07.07.97Acceptance of code of good
practice on voluntary standards
Agreement on Trade-Related
Aspects of Intellectual
Property RightsArticle 69 IP/N/3/Rev.2/Add.5
09.07.97Contact point for intellectual
property issues
Agreement on Trade-Related
Investment MeasuresArticle 6.2 G/TRIMS/N/2/Rev.7
18.01.00Identification of TRIMs
Source: WTO Secretariat.
42. Mozambique is active in the WTO, representing its own interests.  Nonetheless, familiarity
with the WTO Agreements is generally limited to the confines of the Trade Department of the
Ministry of Industry and Trade.  Awareness and understanding of the WTO agreements and of their
impact on a range of sectors are negligible, both within the Mozambican public and private sectors.8
43. Mozambican officials continue the process of preparing legislation and regulations consistent
with various WTO obligations.  Technical assistance is viewed to be essential for Mozambique to
come into full compliance with its WTO obligations.
(ii) Trade-related assistance
44. Under the Integrated Framework for trade-related technical assistance to LDCs (IF),
Mozambique prepared an assessment of its needs for trade-related assistance (WTO document
WT/LDC/HL/12/add.9).  In this do cument, the Mozambican authorities stressed the objectives of the
Government and the aims of the Govern ment's trade policy, consisting of:
- promoting export diversification;
- stimulating the production of goods and services to meet the domestic demand;
- guaranteeing the provision of raw material and equipment to the domestic market, so
as to stimulate the production of exported goods;
- upgrading quality of domestic production;
- supporting regional and international initiatives that contribute to a better economic
integration and development;  and
- improving the business and regulatory climate for investment.
45. The document draws attention to the fundamental economic problems facing Mozambique,
such as the lack of competitiveness of many domestic industries;  poor physical infrastructure;  high
costs of energy;  narrow industrial base with heavy dependence on few commodity exports;  severecapacity constraints, in particular skills shortage;  inexperienced private sector;  lack of exposure to
the world markets;  and inadequate knowledge of the rules and requirements of regional and world
markets.
                                                     
8 WTO document WT/COMTD/IF/29, 6 April 1998.WT/TPR/S/79 Trade Policy Review
Page 18
46. Taking this assessment as a basis, the six core agencies of the IF (the WTO, IMF, World
Bank, UNCTAD, ITC, and UNDP) formulated a coordinated response on trade-related assistance
activities, which should have been the basis for a Roundtable on Mozambique.  However, such
Roundtable was never held due to the difficulties encountered by the IF itself.  Despite these
difficulties, it has been stressed by the Mozambican  authorities that several changes have occurred in
trade policy (as reflected in the Trade Policy and Strategy of April 1999) and that the needsassessment of 1997 should be adapted to the new trading environment, in particular at the regional
level.
47. In the context of the preparation of Mozambique's Trade Policy Review, a WTO Secretariat
team visited Maputo in July 2000.  During this mission an assessment of technical activities was
undertaken that could serve as a basis for a pluri-annual programme that could be provided toMozambique as a follow up, and in the light of the Review.
48. The conclusions of this assessment found that trade-related technical assistance activities,
which would be provided by international agencies, including the WTO, should fulfill the objectives
listed below.
Information49. Assistance in terms of information on the multilateral trading system is needed in order for
Mozambique to be well informed on the developments taking place in the multilateral trading system.
Very little information on the WTO is made available to the different actors/groups.  Information on
the multilateral trading system does not seem to reach most ministries, except the Ministry of Trade.
The Mozambican authorities requested that more activities concerning the dissemination of
information be provided in the future on a regular basis.
50. Against this background, it should be noted that documentation on the world trading
environment does not receive a widespread dissemination.  Very little information material is
provided to the local media by the Ministries, or the WTO.  The WTO could make available to the
media the relevant information.
51. A similar lack of awareness within the private sector (including the Chamber of Commerce)
as well as the universities, on the multilateral trading system, may explain the adverse public opinionof the world trading system.  In general, many people feel that the price paid by Mozambique to join
the multilateral trading system is too high;  many are of the view that it might be better for
Mozambique to look for benefits within the framew ork of regional integration schemes, in particular
SADC.
Capacity building52. Another major task is to assist Mozambique in capacity-building, in particular in activities to
improve human and institutional capacity building.  Very few officials in the various ministerial
departments – except in the Ministry of Trade – have participated in training activities organized by
international institutions, including the WTO, on a regular basis.  Mozambican officials have
participated in regional seminars, including in seminars organized under the framework of SADC;
these have focused on services;  market access, including customs valuation and preshipment
inspection;  trade and environment;  integrated data base;  and rules.  Mozambican officials have not
participated in other specialized regional seminars .  Only one seminar on the multilateral trading
system was held in Mozambique during the period 1994-2000, in Maputo.Mozambique WT/TPR/S/79
Page 19
53. National or regional seminars have been the main  instrument for capacity-building in the case
of Mozambique.  Only four officials from the Mozambican Government have participated in the
regular GATT/WTO trade policy courses lasting more than three months;  three officials attended the
short trade policy courses organized by the WTO Secretariat for least-developed countries in
1998/2000.
54. As a general feature, these weaknesses are identical for the Mozambican private sector.
55. As a consequence, Mozambique's training needs remain substantial.  Mozambican officials
have underlined that the main thrust of technica l activities should be to increase substantially the
number of "knowledgeable" officials.
56. The following technical assistance activities might be considered:
- national seminars on general trade topics, on a regular basis in Maputo (or in specific
provinces) on a yearly basis;
- to invite at least two Mozambicans to each specialized regional seminar;
- to have more Mozambican officials in the trade policy courses organized by the
WTO;
- to organize trade policy courses at the regional or sub-regional level, in particular in
the context of SADC and COMESA, where Mozambican officials could participate;
and
- Mozambique's participation in the JITAP programme, which has a training of trainers
component that could assist in responding to the urgent needs for capacity-building
expressed by Mozambique.
Implementation
57. An important element of the trade policy of Mozambique is to fulfill its obligations under the
WTO.  However, a certain number of points should be borne in mind, including the difficulties
encountered in fulfilling notification requirements, adjusting the domestic legislation, and applying
effectively the WTO Agreements.
(a) Notifications
58. Mozambique has, to date, made only three notifications (Table II.3).
59. The low level of notifications derives mainly from the general lack of information and
knowledge of the officials in the responsible ministries dealing with the various WTO Agreements.
This could be noted, in particular, in the Ministri es of Agriculture and Fisheries, Industry and Trade,
and Foreign Affairs.
60. Another major bottleneck is the lack of coordination and, to  some degree, of overlap of
mandates among ministries on specific topics, in particular between the Ministry of Industry and
Trade and the Ministry of Planning and Finance.  Special assistance should be envisaged to help the
Government of Mozambique in its efforts to increase coordination and interaction among the various
ministries, technical and private-sector institutions to enable them to become more active in the area
of implementation.WT/TPR/S/79 Trade Policy Review
Page 20
(b) Adaptation of legislation
61. Technical assistance has been provided to Mozambique to bring its domestic legislation into
conformity with the relevant WTO Agreements.  Specific assistance was provided in certain areas, on
a bilateral basis, in particular on customs valuation and TRIPS.  However, it appears that assistance is
still needed in terms of a clarification and inventory of all the decrees and laws that would need to be
modified.
(c) Effective implementation
62. Despite assistance provided by some bilateral donors and international organizations (DFID,
Crown Agents, Norwegian Aid, GTZ, the World Ba nk, and IMF), there remain important needs in
terms of human and financial resources.  These are crucial, in particular considering the small number
of officials in charge of implementing the Agreements (e.g. in Customs).  This shortcoming is alsolinked to the perceived inadequacy of training in middle-ranked officials and technicians in charge of
fisheries, agriculture, industry, and unfair competition.  The Mozambican authorities also face a
serious lack of financial and technical means to implement the WTO Agreements.
63. A further important bottleneck consists in th e inadequacy of equipment relating to quality
control, in particular for exports and consumer protection.
64. Mozambican officials have also noted the need for technical assistance to overcome
difficulties in accessing foreign markets, due mainly to strict quality and health requirements (for
example in fisheries).  Financial resources and technical assistance were also requested for product
design, quality improvement, packaging, and standardization.
65. The effective implementation of multilateral agreements may also be hampered by difficulties
in law enforcement, in particular laws to prev ent exhaustion of natural resources, notably in the
fishing industry resulting from poor infrastructure, and a number of impediments related togeographical (coastal and land) issues and the economic environment (the existence of a large
informal sector).
66. Box II.1 describes the situation concerning implementation in Mozambique of selected
agreements.
Participation in the multilateral trading system67. Technical assistance is required to improve Mozambique's capacity to participate in the
multilateral trading system and the ongoing WTO negotiations.  Particular attention is needed in the
area of services, which holds considerable potential for Mozambique's economic development
(tourism, financial services, telecoms).  In this context, the authorities have mentioned the necessity to
build negotiating skills among its officials to prepare them for the next set of negotiations.
68. Mozambique does not have a permanent mission in Geneva.  It would appear necessary for a
group of negotiators to be trained in the near future to enable Mozambique to be actively represented
in the WTO and to be in a position to participate more fully in the negotiations and ongoing issues.
Seminars/workshops on negotiating techniques, as well as on dispute settlement, would be
appropriate.Mozambique WT/TPR/S/79
Page 21
Box II.1:  Implementation of selected WTO Agreements
Customs valuation :  the WTO's customs valuation agreement is being progressively put in place in
Mozambique.  For this purpose, the Government receive s the assistance of Crown Agents (U.K.), acting under
the framework of a multi-year contract.  The main areas of assistance activities include the progressive
application of the WTO definition of value;  computerization of the main 11 regional customs offices;
training of officials on the WTO valuation method;  and risk management.
Additional efforts are needed in areas such as the final drafting of a new Decree based on the WTO customs
valuation agreement, and publication of minimum values which have not been notified to the WTO.
SPS and TBT :  focal points dealing with sanitary and phytosanitary measures and technical barriers to trade
have already been set up.  However, the ability of theses points to respond to questions raised by other
Members remains doubtful due mainly to the lack of telecommunication equipment.  Mozambique is seekingsome assistance in the context of SADC, where harmonization among member countries is being pursued.
Rules on unfair competition :  the existence of specific Mozambican legislation dealing with unfair
competition is not clear.  Some laws dating back to 1944 were quoted by some ministries as a basis for futurefollow-up in that area, whereas it was stressed by other ministries that such legislation was abolished long
time ago.
It would be useful to evaluate the real necessity of enacting legislation on countervailing duties and safeguard
actions.
Import licensing and investment laws :  some uncertainties were noted by officials concerning the
compatibility of domestic legislation on import licensing and investment regulations with the relevant WTOAgreements.
TRIPS :  efforts to modernize the domestic legislation are needed, as Mozambique's current intellectual
property laws date back to the Portuguese administration.  It has been stressed that Mozambique has not yetsigned certain main intellectual property instruments, including the WIPO convention itself.
Source :  WTO Secretariat.
Reference Centre
69. A reference centre was installed in Maputo in 1998 to provide a permanent communication
tool with the WTO, and a solid documentation on the multilateral trading system.  This centre,
installed in the premises of the library of the Ministry of Trade, needs to be upgraded and developedto allow continuous online communication with th e WTO.  More equipment, in addition to that
supplied by the WTO, is also needed, in particul ar another computer and a photocopier, as well as
additional shelves for the books provided.  Additional training, as well as a refresher course, should be
envisaged in the near future as only two officials seem to be able to use the reference centre.
70. With respect to informatics in general, several ministries/public entities have stressed the need
for new equipment and material.  Such requests were made by the Ministries of Industry and Trade,
and Agriculture and Fisheries, among others.  A similar request was made concerning the use ofstatistical tools, including the integrated data base in the same ministries.WT/TPR/S/79 Trade Policy Review
Page 22
(iii) Regional agreements
71. At the regional level, Mozambique's economic cooperation arrangements currently revolve
around the African region, including the Southern African Development Community (SADC), and the
Cross-Border Initiative (CBI).9
(a) Southern African Development Community
72. The Southern African Development Community (SADC) Treaty aims to build a community
of nations, which together are politically and economically strong to compete in the world
marketplace.  The cornerstone of SADC is the vision of a shared future within the regional family.
Through regional cooperation and integration, the Community aims to provide balanced economic
growth and development, political stability and security, for all its member States.10
73. The SADC Treaty is a legally binding and all-encompassing framework by which the member
States coordinate, harmonize, and rationalize their policies, and develop strategies for sustainable
development in all areas of human behaviour.  The Treaty provides for the following fundamental
principles:
- sovereign equality of member States;
- solidarity, peace, and security;
- human rights, democracy, and rule of law;  and
- equity, balance, and mutual benefit.11
74. Decisions, policies, and agreements entered into under the auspices of SADC are legally
binding, and the Community will have the necessar y legal instruments to enforce such decisions,
policies and/or agreements.  The Treaty provides for protocols that will set out the principles and
procedures under which member States will conduct their cooperation in specific areas.12
75. SADC members have also negotiated a Trade Protocol, which was signed in August 1996 by
the Heads of State or Government, and which became effective on 1 September 2000.  The ultimate
objective of the Trade Protocol is the establishment of a SADC Free-Trade Area.  During the
August 2000 SADC Summit in Windhoek, Namibia,  Mozambique, along with other SADC member
countries, were allowed a six-month extension of the effective date of the Trade Protocol in order to
prepare fully for its implementation.  It is expect ed that Mozambique will implement the SADC Trade
Protocol in the first quarter of 2001.  Within the SADC regime, substantial progress has already been
made towards the harmonization of customs and trade documentation.  Negotiations on a tariff
schedule for member countries are still ongoing, but expectations are that they will soon be
concluded.
                                                     
9 The recently signed trade agreement between South Africa and the European Union is viewed as a
cause for concern based on Mozambique's fear that trade diversion may be a consequence of that accord.
10  The current SADC member States are:  Angola, Botswana, the Democratic Republic of Congo,
Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia,
and Zimbabwe.  SADC online information, available at:  http://www.sadc.int/overview/vision.htm.
11 Article 4 of the Treaty.  SADC online information available at:  http://www.sadc.int/overview/
treaty.htm.
12 Information available at:  http://www.sadc.int/overview/treaty.htm.Mozambique WT/TPR/S/79
Page 23
(b) Cross-Border Initiative
76. The Cross-Border Initiative (CBI) aims to move its member countries (including
Mozambique) towards increased economic integration by facilitating private investment, trade, and
payments between them.  Member States are the countries in eastern and southern Africa, and the
Indian Ocean.  The CBI has been developed in close collaboration with the economic integration
organizations in the region.  Launched in 1992, the CBI is co-sponsored by the EuropeanCommission, the International Monetary Fund, the World Bank and the African Development Bank.
The impact of the CBI on Mozambique has been minimal so far, but it could be a factor in the future.
(iv) Other trade agreements or arrangements
77. Mozambique is a signatory to the Cotonou Agreement (the successor agreement to the Lomé
Convention), which affords a group of 71 African, Caribbean, and Pacific (ACP) countriespreferential trade and aid links with the EU.  The current 20-year agreement was signed in Cotonou,
Benin, on 23 June 2000, and replaced the previous agreements signed in Lomé in 1975, 1979, 1984,
and 1989.
13  Although signed, the new agreement must be  ratified by ACP and EU Member States.
78. Under the Cotonou Agreement, the EU grants n on-reciprocal trade preferences to imports of
industrial and processed agricultural products originating from the ACP countries (but notunprocessed agricultural products), and provides special market access under "commodity protocols"
for a few products (bananas, rum, beef and veal, and sugar).  The Cotonou Agreement abolishes
Stabex, Sysmin, and the rum protocol of the Lomé  Conventions.  The current all-ACP non-reciprocal
tariff preferences are maintained until 31 December 2007;  they will be replaced by a set of Economic
Partnership Agreements (EPAs) starting in 2008.  These free-trade agreements are expected to be
reciprocal and WTO-compatible;  they will be implemented over 10 to 12 years.
14
79. Mozambique also benefits from preferential tariff treatment granted by Australia, Canada,
the EU, Japan, New Zealand, and the United States , under the Generalized System of Preferences
(GSP).  India grants preferential access to Mozamb ique under the Global System of Trade Preferences
(GSTP).15
80. In 1986, Denmark, Finland, Norway, and Sweden signed an economic cooperation accord
with SADC, known as the Nord ic/SADC Accord, aimed at providing market opportunities for
SADC-made products on highly concessionary terms.
(v) Trade disputes and consultations
81. Mozambique is not currently involved, either as a complainant or defendant, in any trade
dispute, either at the WTO or any regional organization.
82. The COMESA Court of Justice is competent to adjudicate on all issues that may be referred
to it under the Treaty (section (iii)(b)).  Likewi se, as a member of SADC, Mozambique will have
access to a regional dispute process, which, as yet, has not been codified.  SADC plans to create a
Tribunal that will ensure adherence to, and proper interpretation of the provisions of the SADC Treaty
and subsidiary instruments.  The Tribunal will also adjudicate disputes referred to it.  The
                                                     
13 Information available at:  http://www.o neworld.org/acpsec/gb/cotonou/accord1e.htm
14 Information available at:  http://www.oneworld.org/ecdpm/lome/lnb8_gb.htm
15 WTO document WT/LDC/HL/20, 23 October 1997.  Turkey indicated its intention to grant
Mozambique preferential tariff rates under the GSTP, WTO document WT/COMTD/W/ 39, 30 March 1998.WT/TPR/S/79 Trade Policy Review
Page 24
composition, powers, functions, procedures, and other related matters governing the Tribunal will be
prescribed in a future Protocol.  Decisions of the Tribunal will be final and binding.16
(vi) Investment agreements or arrangements
83. Mozambique is a signatory to the Convention establishing the Multilateral Investment
Guarantee Agency (MIGA), and a member of the International Centre for the Settlement of
Investment Disputes (ICSID).  The Cotonou Agreement between the ACP States and the EuropeanUnion contains principles protecting European in vestments in the ACP countries (Articles 75, 76, 77,
and 78).
17
                                                     
16 SADC online information, available at:  http://www.sadc.int/overview/works.htm.
17 The Cotonou Agreement is available online at:  http://www.oneworld.org/thinktank/eucoop.htm.