WORLD TRADE
ORGANIZATIONWT/TPR/M/90/Add.1
17 January 2002
(02-0250)
Trade Policy Review Body
2 and 5 November 2001
TRADE POLICY REVIEW
MAURITIUS
Minutes of Meeting
Addendum
Page
ANNEX I ADVANCE WRITTEN QUESTIONS BY MEMBERS, AND RESPONSES BY 3
THE DELEGATION OF MAURITIUS
ORGANIGRAMME 37WT/TPR/M/90/Add.1
Page 3
ANNEX I
INTRODUCTION
The delegation of Mauritius appreciates that Members have expressed special interest in the Trade
Policy Review of Mauritius by putting questions in connection with our trade policies.  We have
found that several questions overlap both within and among the sets of questions submitted by
Members.  Consequently, as Members will note, some of the replies have been made in a consolidatedmanner.
QUESTIONS FROM SWITZERLAND
Question 1
Mauritius is an active participant in the multilateral as well as in regional trading systems and this
engagement has led to the present opened orientatio n of its economy.  Still, the number and height
of tariff bands, the existence of non tariff measures including on exports, the description of some
trades as “strategic” and the persistence of monopo lies in the trading of some goods are a little bit
worrying.  Therefore, Switzerland would like to ask whether Mauritius shares the opinion that
further liberalization measures are necessary in the very interest of Mauritius’ economy?  Further,
Switzerland would like to ask whether there is a calendar for such liberalization measures?
Answer
The high rates of tariffs (55% and above) apply mainly to consumer non-essential goods.
Historically, such high rates have been maintained for revenue-raising reasons.  As it is well known,
imposing high tariffs on goods entering into the port or airport has been traditionally the most
convenient way of raising revenue for small island economies.
Even though the number and level of the tariff bands have remained unchanged over the period under
review, there have been significant changes within the composition of the tariff bands.  In June 1999,
21% of the tariff lines attracted customs duty of 55% and above; and in June 2001, this figure has
been reduced to 17%.  Likewise, in June 1999, about 28% (1512) of the tariff lines were zero-rated
and in June 2001, this figure has increased significantly to 55% (3055).  The tariff reform is being
pursued. Unfortunately, implementation of our tariff reform has been marred by severe revenue andbudgetary constraints.  Our budget deficit is presen tly at the high level of 6.5% of GDP.  Nonetheless,
since 1999, we have been consistently lowering the overall level of tariffs and intend to pursue our
liberalization in a balanced manner.
Government’s actions in dealing with these issues are fully in line with the objectives enshrined in the
GATT Preamble with regard to developmental and other specific needs of individual Member
countries.  It should be recalled that GATT also provides for protection of health and public morals,
public safety and preservation of the environment and endangered species.
In a country with a small internal market like Mauritius, State Trading Organisations are necessary for
ensuring the regularity, reliability and conditions of supply of certain vital commodities.  They also
help to prevent cartel prices and artificial shortages and hoarding of basic staple commodities and
essential products.
Export permits are required in few cases where it is necessary to deal with seasonal or temporary
shortages of certain fresh vegetables or fish on the local market.WT/TPR/M/90/Add.1
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Question 2
Next, Switzerland would like to ask, whether Maur itius could explain the rationale underlying the
use of import prohibitions, which have increased over the last years (from 13 in 1995 to 24 in
2001)?  More specifically, Switzerland would be interested to understand what reasons lie behind
the restriction of the importation of chocolate conf ectionery?  Are the curren t plans for the removal
of this import restrictions, that affect Switzerland’s interests?
Answer
Whenever import prohibitions apply, they are, in keeping with GATT provisions, directed at
protecting public health, public morals, and environment.  There are no restrictions on the
importation of chocolate confectionery .  There is no control on the other types of sugar and
chocolate confectioneries and bubble/chewing gums .  The prohibition relates to confectionery in
the form of cigarettes.  This is in line with Government Policy discouraging the acquisition of
smoking habits among school children.  It was found that confectionery in the form of cigarettes was
a first step towards encouraging children to emulate the habit of smoking.
QUESTIONS FROM JAPAN
Questions on the Report by the Secretariat (WT/TPR/S/90)
III.  TRADE POLICY AND PRACTICES BY MEASURE
(2)  MEASURES DIRECTLY AFFECTING EXPORTS
Question 1
Export Control
We note that a permit is required for exportin g certain products for various grounds, including
those on sanitary, phytosanitary, environmen tal and food security.  Please provide more
information on the requirements necessary for exporting agricultural products.
Answer
Depending on the nature of the agricultural products, the exporter will need to have the following:
• necessary clearances from the Ministry of Agriculture which considers food security,
sanitary & phytosanitary measures;
• an export permit from Ministry of Commerce; and
• appropriate clearance from the Ministry of Health.
Question 2
Export Credits
We would appreciate receiving more information on the Mauritian export credit measures.
Answer
The export credit guarantee scheme which was managed by the Development Bank of Mauritius is no
longer in force since some fifteen years.WT/TPR/M/90/Add.1
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Question 3
According to the Report, local companies producing primarily for the domestic market are eligible
for reductions of income tax.  For example, a 30% reduction is granted when exports account for
between 10% and 30%, and a 40% reduction is grante d when more than 50% of output is exported.
Japan suspects that this system could correspond to  export subsidies prohibited in Art. 3.1 of the
Agreement on Subsidies and Countervailing Measures .  Please provide the Mauritian view on this.
Answer
The tax regime whereby tax credits are related to the ratio of export sales to turnover applied only to
companies subject to a corporate tax rate of 25% and not to those subject to a tax rate of 15%.Section 72 of the Income Tax Act specifically provides that the amount of tax allowable shall be
limited so that the tax payable after deduction of the tax credit would not be less than 15%.
In recent years, the 15% rate of tax has been extended to all manufacturing companies (except
producers of cigarettes and alcoholic beverages), agriculture, agro-based industry, tourism andsoftware development.
As a result, this tax régime has become virtually inoperative and its effect nullified.The non-removal of this tax credit is in fact an oversight and it is proposed to remedy to it in the next
budget.
Question 4
(4)  MEASURES AFFECTING PRODUCTION AND TRADE
State-owned enterprises
According to the Report, the State Trading Corporation (STC) imports the totality of Mauritius
requirements for such products as flour and ration rice.  Please explain in detail the functioning of
the STC, as well as the importing system which the STC bases its importation.
Answer
Functioning of STC
The State Trading Corporation (STC) is a Parastatal Body created by an Act of Parliament in 1982 to
import essential commodities as authorized by the Government.
In laying down the rules governing the functioning of the STC, the Government of Mauritius was
guided by the willingness to give flexibility, maximum efficiency and reasonable autonomy to the
Corporation while ensuring that it remains accountable to Government and the Parliament ofMauritius.
Importing System of STC
The STC is the sole importer of ration rice (25% brokens) and wheat flour through open international
tender.  These are staple food items and are sold at prices subsidized by Government.  The STC has to
ensure regularity of Supplies and reliability of Suppliers.  The importation of Basmati Rice is howeverliberalized and STC competes with the private traders.  The STC ensures that it carries out itsWT/TPR/M/90/Add.1
Page 6
functions on sound commercial principle and pays due consideration to competitiveness, cost-
efficiency and profitability.
The STC also imports petroleum products to ensure regularity of supplies and reasonable costs as they
are strategic products for the economy.
Mauritius is a small island which is very far from its major sources of supplies.  It is vulnerable to
changes in world prices. In order to obtain the best possible prices, the STC launches openinternational annual tender for purchases of the whole country’s requirements.  This system of
procurement is transparent.  Tenderers from many countries participate in STC’s Tenders and have
always expressed their appreciation of the procurement system of STC.
Question 5
Intellectual Property rights
According to the Report, Mauritius is finalizing a new legislation on patents and trademarks, and is
now in the process of drafting a legislation on in dustrial designs, geographical indications, and the
layout design of integrated circuits, with a view to complying with its obligations under the TRIPS
Agreement.  Japan praises Mauritius efforts for making such legislation and would appreciate
receiving information on the current situation of such legislation.
Answer
At the TRIPS review of Mauritius in June 2001, a draft legislation was circulated to all WTO
Members inviting their comments/suggestions. This draft legislation has been subsequently reviewed
and finalized in light of the observations of Members and after further clarifications from the WIPO.
The Bills will be introduced in the National Assembly shortly.
Question 6
IV.  TRADE POLICIES BY SECTOR
(4)  SERVICES
Tourism
In these paragraphs, many restrictions and limitations in the tourism sector are described.  Does
the Mauritian Government have any intention to relax such restrictions and limitations in the near
future ?
Answer
Further liberalization in tourism will have to take into account the sustainability of the Tourism
Industry.  This will depend to a great extent on the limited land resources available for development,pressures on beach area usage, the existing airport infrastructure, road network and water supply.
Further expansion of the tourism sector and tourism-related activities is conditional on the
maintenance of the ecological balance and prevention of environmental degradation and is to be
viewed from a holistic and synergetic angle.WT/TPR/M/90/Add.1
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QUESTIONS ON BEHALF OF THE EUROPEAN UNION
Report by the Government (WT/TPR/G/90)
II.  TRADE POLICIES AND PRACTICES
Question 1
2.3  Multilateral and Regional AgreementsCOMESA(Para. 70) The report refers to the future  COMESA CET by 2004.  The EC welcomes deeper
integration initiative under COMESA  and supports actively this ongoing process.  However, this
brings up some questions: What impact will th e tariffs proposed have on the tariff structure of
Mauritius? In which way does Mauritius envisage to liaise its membership in the SADC Free Trade
Protocol with a possible COMESA CET? Does Ma uritius see any possibility of progressively
merging overlapping integration initiatives in Southern/Eastern Africa? We would be grateful tolearn about the Government’s views in this respect.
Answer
The COMESA CET will undoubtedly have serious reve nue implications for Mauritius.  Accordingly,
the COMESA Secretariat is undertaking an impact assessment for all COMESA countries.
The overlapping membership in both COMESA a nd SADC will indeed become a problem in case
each of them wishes to have separate CET regimes.  SADC and COMESA are condemned to work
together and synchronize the timing and the scope of their CET.  At the last meeting of the African
Trade Ministers, the sub-regional blocs of the African continent have been urged to harmonize their
trade liberalization programmes with a view to achieving convergence.
Question 2
General question on WTO New Round:
We are pleased to note statements of Mauritian openness on a New Round of multilateral trade
negotiations.  We would be grateful if the Go vernment could elaborate on Mauritius’s priorities
and concerns for the future negotiations.
Answer
Mauritius believes that the key issue for the Doha Meeting should be to achieve a development
agenda that will address the existing imbalances a nd inequities within the multilateral trading system
and place development at the centre of WTO work to cater for the needs and interests of developing
countries, in particular SIDS.  For these vulnerable developing countries, the maintenance ofpreferences is a sine qua non  condition for their sustainable socio-economic development.  For
instance, such preferences are vital in enabling agriculture to play a multifunctional role in Mauritius.
Mauritius supports the adoption of a Work Programme on Small Economies at the Doha Ministerial
Conference.WT/TPR/M/90/Add.1
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Report by the Secretariat (WT/TPR/S/90)
SUMMARY OBSERVATIONS
Question 3
(3)  TRADE POLICY INSTRUMENTS(Para. 12) Could Mauritius please inform if it intends to further dismantle its non-tariff barriers,
how and by when?
Answer
Non-tariff measures are in place to achieve national legitimate policy objectives and their
maintenance are in accordance with GATT/WTO provisions for health, security and environmental
reasons.  Moreover, such measures are particularly warranted in the case of a small island like
Mauritius where external shocks can have permanent and long-term consequences.
Question 4
(5)  TRADE POLICY AND TRADING PARTNERS
(Para. 21) The Secretariat report states that Mauritius is taking steps to adjust to changes in the
international trade environment.  Does Mauritius have any plans to reduce the country’s relianceon trade taxes?  Has Mauritius considered any review of the current tax system, or reduced levels
of fiscal incentives?
Answer
The Government published in 1997 a White Paper on Indirect Taxation Reform, in which its plans to
reduce Government’s reliance on trade taxes were highlighted, and these are being implemented.
As indicated in the Secretariat Report at page 31, the 5% Sales Tax on goods was replaced by a Value
Added Tax (VAT) on goods and services in September 1998.  The VAT rate is presently 12%.  Asalso indicated at pages 23 to 27, a major reform in customs tariffs is currently underway with a
lowering of rates on more than 2,000 items since 1999, and the reform on excise taxation has been
launched as from June 2001.
Paragraph 13 at page 25 clearly shows the extent of reduction in Government’s reliance on trade
taxes.  Thus, the share of customs tariffs in total tax revenue has declined from 33.5% in 1996/97 to
around 18% in 2000/01.  It is expected to decline further to 15% by the end of June 2002.
As regards the question of fiscal incentives, a comprehensive review is being undertaken by
Government, with the assistance of UNCTAD experts.  The project entitled "Fiscal Incentives Reviewof Mauritius" is financed by the United Nations Development Programme (UNDP).  The project
document has been signed on 9 October 2001.WT/TPR/M/90/Add.1
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III.  TRADE POLICIES AND PRACTICES BY MEASURE
(2)  MEASURES DIRECTLY AFFECTING IMPORTS
(ii)  Tariffs, other duties, and taxesQuestion 5
(b)  Tariff Structure(Para. 20) The Secretariat report refers to the high ra tes that apply to products of all kinds.  Could
Mauritius please explain why it maintains these high rates, in particular in application to alcoholicbeverages? Does the Government have any intentions  in order to reduce these high applied rates
tariffs and to improve the bindings?
Answer
Members will appreciate that Mauritius wants to use a judicious tariff policy as one of the instruments
of its trade policies.  Mauritius has indeed gone a long way towards reducing its tariffs autonomously
during the past years.  All these measures are not without major implications on government revenue
and industrial development.  Mauritius has also undertaken tariff reduction in the context of regional
initiatives.  Tariff and fiscal policies will be devised in the light of ongoing assessments of tax and
economic reforms undertaken by Government.
Question 6
(d)  Other duties and taxes
(Para. 31) The Secretariat report states that “There  are significant differences in the application of
excise duties between imported and locally produced goods” making a particular reference to
spirits.  We would appreciate it if Mauritius could inform if and by when it intends to amend its
practices in this area, and equalise the excise rate of imported and locally produced products.
Answer
Mauritius has already initiated a rationalization programme on excise taxation in order to equalise the
excise rate of imported and locally produced products.  Moreover, the differentiated excise taxation
has been abolished for motor cars.
Question 7
(e)  Duty and tax exemptions and refunds
(Para. 34) We would be grateful if the Governme nt could further elaborate on the exact criteria
used for “other firm-specific exemptions or concessions” and which may be granted by the Finance
Minister “on a selective basis”.
Answer
Please refer to the reply to question No. 5 of Canada.WT/TPR/M/90/Add.1
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Question 8
(v)  Import prohibitions, restrictions, and licensing
(Para. 40) According to the Secretariat report th ere are a number of prohibitions on certain
imports of goods.  Could Mauritius please explain the reason of these import prohibitions and if it
believes that they are justified under WTO rules?
Answer
These import prohibitions are meant to ensure public safety, protect public morals, and also to protect
the environment and endangered species.  They are in accordance with the provisions of GATTArticle XX.
(vii)  Government Procurement
Question 9
(Para. 46) Mauritius is not a member nor an observer of the GPA.  In its 1995 Trade Policy
Review, Mauritius indicated that it was ‘seriously considering’ participation to some degree.  Could
the Government please inform if Mauritius is ready to apply for GPA membership and when it does
foresee becoming an observer in the GPA committee?
Answer
Mauritius is not yet ready to apply for GPA membership.
Question 10
(Para. 47) The EU would be interested to recei ve some additional information about the Review of
the CBTA:  What is the status of the review of the Central Tender Board Act by the High Powered
Committee?  Mauritius states its intention of ensuring ‘conformity with international norms and
practices’; could Mauritius confirm that this new legislation will be in conformity with the GPA? Is
Mauritius ready to provide the WTO Secretariat with all preparatory legislation under this review?And finally, what are the major chan ges foreseen to existing legislation?
Answer
A reply will be provided in due course.
Question 11
(Para. 49) We would also be grateful if Maurit ius could further elaborate on the eligibility for
tender.  In particular, what are the criteria used in practice to open a tender to foreign suppliers?What is meant by ‘in principle only local firms and local agents of foreign suppliers are eligible for
open tenders’?  What is the definition of a ‘local  or domestic firm’ and a ‘local supplier’ according
to Mauritius national procurement legislation? Does the current review of the procurement
legislation intend to abolish preferential treatment for domestic suppliers?
Answer
An answer will be provided in due course.WT/TPR/M/90/Add.1
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Question 12
(3)  MEASURES DIRECTLY AFFECTING EXPORTS
(iv)  Export subsidies, and duty and tax concessions(Para. 58) Could the Mauritian government please explain how their national legislation complies
with the Agreement on Subsidies and Countervailing Measures (ASCM)?  In particular, could
Mauritius please explain how its export subsidy schemes operate, who can benefit from them and
how they are reconciled with its commitments under the ASCM?
Answer
The incentives granted to the economic sectors in Mauritius have already been harmonized and both
the export enterprises and the domestic industries are almost at par with regard to the incentive
schemes existing in the country.
Question 13
(4)  MEASURES AFFECTING PRODUCTION AND TRADE
(v)  Intellectual Property rightsThe EU would appreciate it if Mauritius could info rm about any concrete steps to be undertaken in
order to achieve the implementation of the obligations under the TRIPS Agreement.
Answer
At the TRIPS Review of Mauritius in June 2001, we circulated our draft legislation and we invited
comments/suggestions from Members.  Our draft legislation has subsequently been reviewed and
finalized in the light of observations of Members and further clarifications from the WIPO.
IV.  TRADE POLICIES BY SECTOR
Question 14
As a general remark, we would like to encourage Mauritius to further diversify its economy away
from the strong reliance on the clothing and textil es and sugar industries.  Its efforts to build its
economy on several pillars have contributed to visibly improve the country’s economicperformance.  Nevertheless, Mauritius continues to  enjoy very high levels of protection for the
above industries.  Does the Mauritian Government agree that additional efforts are needed in order
to help the economy promote the adjustments necessary to deal with the inevitable changes over the
next five or ten years?
Answer
Please refer to the reply to question No. 2 of the United States.WT/TPR/M/90/Add.1
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Question 15
(2)  AGRICULTURE AND RELATED ACTIVITIES
(ii)  Key subsectors(Para. 18) The Secretariat report describes that though declining in share the sugar industry
remains a leading sector of the Mauritian economy mainly because of the trade preferences
granted by the EU.  We would suggest some clarif ication in this paragraph.  It should be more
specifically highlighted that in addition, under the Special Preferential Sugar Agreement,
Mauritius has the possibility to export additio nal quantities to the EU at a reduced rate.
Answer
The ACP-EU Agreements refer to a certain number of preferences including textiles and sugar.  The
preferences on sugar relate to commitments undertaken by the Community at the time of accession of
the UK to the Community and those negotiated in 1995 and 2001.  The Sugar Protocol, whichembodies these commitments of the EU and which is of indefinite duration, has been appended to the
successive Lomé Conventions, and now to the Cotonou Agreement solely for institutional
convenience.
These preferences are vital for a Small Island Developing State (SIDS) such as Mauritius which is
devoid of natural resources and suffers from numerous constraints besetting SIDS.  Moreover, sugar
cane, on account of agricultural and climatic factors, is the only crop that can be commerciallycultivated on a large scale.
Sugar is not only an economic activity in Mauritius.  It spans other domains:
• energy, coal/bagasse fired power plants contribute for some 50% of electricity
demand; such projects would maintain this percentage over the decade against the
background of rising demand; sugar is thus a key element to the energy self-
sufficiency policy of Mauritius;
• landscaping and environment: sugar not only combats erosion but also contributes to
the maintenance of the landscape;
• cane is an important carbon sink; the cane plant absorbs the highest amount of carbon
per unit area;
• employment and revenue: sugar provides gainful employment to workers and
meaningful revenue to planters;
• social life: social life in the rural areas revolves to a large extent around sugar
activities;
• research and technology:  sugar-funded institutions maintain world class research and
technology levels.
In short, sugar, though its multifunctional role, contributes significantly to the socio-economic
development of Mauritius.
The Special Preferential Sugar Agreement provides the possibility for ACP countries, including
Mauritius, to export additional quantities to the EU.  However, the EBA initiative will unfortunately
lead to the reduction of the amount of sugar exported to the EU by non-LDC ACP countries.
Mauritius will welcome initiatives which will result in an equitable form of effort-sharing of the EBAinitiative.WT/TPR/M/90/Add.1
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Question 16
(3)  MANUFACTURING
(Para. 51) The Secretariat report refers to Mauritiu s’ heavy reliance on the clothing and textile
industry, the success of which is dependent on tr ade preferences offered by the EU.  The phase out
of the MFA in particular could cause difficulties for Mauritius clothing and textile industry, whichat the moment is highly protected, suggesting a certain lack of competitiveness.
Answer
Despite its heavy reliance on textile and clothing and on preferential markets, Mauritius is taking
steps to improve the competitiveness of the sector mainly through awareness creation and initiatives
to restructure, modernize and diversify products and markets so as to prepare the manufacturing sector
to better face the phasing-out of the MFA.
The comments made by the EU illustrates the extent to which Mauritius is vulnerable.  As a small
economy, it relies on only two major products.  With the changes looming on the horizon, the risks of
marginalization are increasing.  That is why we ar e asking the international community to recognize
the fundamental role of trade preferences and support an action plan in favour of small economies.
QUESTIONS POSED BY HONG KONG, CHINA
Question 1
A.  Import Permit
It is mentioned that only traditional importers are eligible to apply for permits in respect of goods
that are under a non-restrictive system.  Could the authorities of Mauritius share with us thecriteria/conditions to qualify as traditional importers? Is there any plan to lift such restriction in
the future?
Answer
Please see reply made to question No. 10 from the United States.
Question 2
B.  Telecommunication Services
Welcome the termination of the exclusive right by Mauritius Telecom Ltd in supplying fixed
telecommunications services one year ahead of its GATS commitment.  In this connection, we
would like to know about the post-monopoly arrangem ent in respect of foreign participation in this
area.
Answer
Government is pursuing its efforts to create a more favourable climate for foreign investment for both
individual and corporate investors.  At the international level, the Government is making serious
efforts to enhance the development of this sector through various actions with a view to, inter alia ,
securing market access and attracting investment.  At the national level, Government is committed toWT/TPR/M/90/Add.1
Page 14
improving the legal and administrative framework in order to offer appropriate propriety protection, a
facilitative environment for implementation and an attractive package of incentives.
QUESTIONS POSED BY AUSTRALIA
Question 1
State-owned Monopolies
Please explain why it is necessary to maintain state-owned monopolies, such as the State Trading
Corporation and the Agricultural Marketing Board (Secretariat Report, pages 54 and 55).  Are
there any plans to dismantle these bodies?
Answer
Single desk buyers or sellers in Small Island Deve loping States (SIDS) do not have the capacity to
distort trade.  They act as shock absorbers whenever there is an upsurge of basic commodity pricesand provide security of supply whenever there is a shortage of such goods in the market or when the
free market operators are not prepared to venture in the absence of commercially viable terms of
business.
Please see also reply to question No. 4 from Japan.
Question 2
Everything But Arms Initiative
The European Union “Everything But Arms” initiative is intended to extend preferential access to
the EU market to all developing countries.  What measures are being taken by Mauritius to ensure
the relative competitiveness of Maurit ian exports in such an environment?
Answer
The first sentence is factually incorrect as the EBA applies only to LDCs.However, it must be specified that Mauritius, other SIDS and landlocked countries on account of
major physical constraints cannot and will never attain the competitiveness levels of large multi-
commodity exporting developing and developed countries.
As regards competitiveness, please refer also to the reply to question No. 2 from the United States.
QUESTIONS POSED BY THE ARGENTINE REPUBLIC
Question 1
II.  TRADE REGIME
In paragraph 24, the Secretariat states that Ma uritius considers its participation in regional
agreements as a first step towards improving it s competitiveness, diversifying its exports and
building resilience for full integration into the world economy, among other things.  However, in
paragraph 18 the Secretariat indicates that Mauritius “still attaches great importance to non-WT/TPR/M/90/Add.1
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reciprocal trade preferences and believes that these preferences should be enhanced.”  It adds that
Mauritius also believes that “consolidation of the trade preferences should be made a top priority.”
Could Mauritius indicate how it reconciles the trade policy objective set out in paragraph 18 with
the desire for competitiveness, diversification and adaptation, referred to in paragraph 24.
Answer
The trade policy objectives set out in paragraph 18 and those set out in paragraph 24 are
complementary, given the constraints of Mauritius as a small island economy.
III.  TRADE POLICES AND PRACTICES BY MEASURE
4.  Measures affecting production and trade(v)  Intellectual property rights
Question 2
According to the Secretariat report, Mauritius has not yet implemented its obligations under the
TRIPS Agreement.  In this connection, the report indicates that the legislation relating to the areas
of intellectual property rights governed by the Agreement (patents, trademarks, industrial designs,
geographical indications and layout-designs of integrated circuits) has not yet been finalized.
Could the Government of Mauritius estimate when it expects to adopt legislation serving to
implement the TRIPS Agreement?
Answer
Please refer to the reply to question No. 18 of the United States.
Question 3
In view of the fact that Mauritius completed its transitional period for implementation of the
TRIPS Agreement on 31 December 2000, could the Government of Mauritius indicate what
difficulties it faces in implementing its obligations  under the TRIPS Agreement?
Answer
Please refer to the reply to question No. 18 of the United States.
Question 4
Information would be appreciated on what legal means are available to interested parties, under
the Mauritian legal system, to prevent the use of  geographical indications in accordance with
Articles 22 and 23 of the TRIPS Agreement.
Answer
Please refer to the reply to question No. 18 from the United States.WT/TPR/M/90/Add.1
Page 16
Our draft legislation was duly circulated to all delegations in the context of the TRIPS review of
Mauritius in June 2001.
Question 5
The Secretariat report appears to indicate that Ma uritius has no legislation to protect its own
geographical indications.  Moreover, Mauritius has not yet implemented its obligations under theTRIPS Agreement.  Despite these two factors, Mauritius actively supports the extension to other
products of the protection for wines and spirits pr ovided for in Article 23.  Given the two factors
referred to above, could Mauritius explain the reasons for its request?
Answer
Mauritius considers that extension of Geographical Indications protection to other products will assist
many developing countries in promoting their niche products.
Question 6
The Secretariat report states (page 24) that the problem of counterfeiting affects intellectual
property rights and trademarks.  Could Mauritius indicate whether it has adopted or plans to adopt
measures to prevent counterfeiting?
Answer
Mauritius is fully committed to protecting industr ial property rights through the enactment of
legislation as indicated in the reply to the question No. 18 of the United States.  A national committee
has been set up to consider ways of strengthening existing customs legislation and building up
enforcement measures.  The Committee comprises both public and private sector representatives.
Question 7
Paragraph 13 of the Secretariat report indicates that the Joint Economic Council Task Force has
recommended that Mauritius should fully exploit its comparative advantages in four emerging
clusters, including “knowledge” and “pharmacology”.  In this connection, the Secretariat statesthat the government intends to promote these activities, including the development of software and
pharmaceuticals.
Could Mauritius indicate how it protects intellectual property rights in these two sectors?
Answer
Please refer to the reply to question No. 18 of the United States.
IV.  TRADE POLICES BY SECTOR
2.  Agriculture and related activitiesQuestion 8
According to the Secretariat report (page 57), the sugar subsector is highly protected and
subsidized.  Paragraph 23 appears to suggest that there is some tension in the balance between theWT/TPR/M/90/Add.1
Page 17
area under cultivation and the area earmarked for urbanization.  In that context of intensive
farming, could Mauritius explain the impact on the environment.
Answer
It should be pointed out that the Secretariat report does not indicate that the sugar sector of Mauritius
is highly protected and subsidized.
The “subsidy” mentioned in paragraph 21 (page 59) refers to sugar sold on the domestic market below
cost of production.  In actual fact, the so-called subsidy is a “revenue foregone” for the producer
community.
It should equally be underlined that the producers themselves fund most of the costs incurred by
institutions servicing the industry.
Regarding land issues, please refer to the reply to question No. 11 of Canada.As for the impact on environment, a report of the highly reputed Mauritius Sugar Industry Research
Institute (whose Director is currently the President of the International Society of Sugar Cane
Technologists, the world body of sugar cane scientists) has demonstrated that fertilizers and
herbicides used (for sugar cane cultivation) do not pollute the environment.  Neither insecticides nor
fungicides are used in the Mauritian sugar industry as protection against insects and fungi is ensured
through biological control.
Furthermore, optimal use of bagasse enables the generation of electricity, some 65 kwh per tonne of
cane milled.  This avoids the use of 40 kg of coal per tonne of cane milled.
On environment, please also refer to the repl y to the question No. 15 of the EU  agriculture.
Question 9
Paragraph 21 of the Secretariat report indicates that Mauritius imports most of its sugar.  Could it
explain this situation, taking into account the fact that Mauritius is at the same time a major
exporter of subsidized sugar.
Answer
Mauritius has never exported any subsidized sugar.
Under its preferential trade agreements, Mauritius has to supply specified quantities of sugar.
Domestic consumption is generally met by local production.  However, production shortages brought
about by particularly severe climatic conditions led the country to import sugar (on a limited number
of occasions in the recent past) for domestic cons umption so as not to disrupt the flow of export
earnings so vital for a single commodity exporting Small Island Developing State (SIDS).WT/TPR/M/90/Add.1
Page 18
QUESTIONS FROM THE GOVERNMENT OF CANADA
WTO Secretariat Report (WT/TPR/S/90)
Question 1
Summary Observations; Institutional Framework; paragraph 5:
According to para. 5, Mauritius has established a Regional Co-operation Council, chaired by the
Minister responsible for Foreign Affairs, to forg e a coherent regional strategy for the country.
What is the expected outcome and when will this strategy be made public?
Answer
Mauritius regards regional economic integration as a stepping-stone towards better integration into the
multilateral trading system.
Given the geographical location of the island, Mauritius is part and parcel of both the Southern and
Eastern Zones of Africa.
Mauritius is, therefore, alive to the realities in its immediate surroundings and accordingly takes an
active part in the regional initiatives taken in East and Southern Africa, namely at the level of
COMESA and SADC.  It is also a Member of the Indian Ocean Commission (IOC) and the Indian
Ocean Rim Association for Regional Cooperation (IOR-ARC).
Regional integration is a gradual and evolutionary process. Mauritius believes that all these regional
initiatives will ultimately lead towards convergence as charted out in the road-map of the Abuja
Treaty for the Establishment of the African Economic Community.
The aim of the Regional Cooperation Council is to ensure coherence and consistency in our policies
in respect of all the regional groupings in which Mauritius is involved.
Question 2
Summary Observations; Trade Policy and Trading Partners; paragraph 22:
According to para. 22, Mauritius could attract in vestment by increasing competition and by
increasing scheduling in certain service sectors.   Is the Government of Mauritius considering
further liberalization in order to increase foreign investment and participation in the economy?
Answer
As far as scheduling in GATS is concerned, Mauritius, as a developing country, has made substantial
commitments. During the Uruguay Round, Mauritius made commitments in tourism andtelecommunication services and subsequently, when it joined the Financial Services Agreement, right
from its inception, made further commitments in the sector.  Mauritius has brought its copyright
legislation in conformity with TRIPS.  As for the telecommunications sector, the monopoly of the
present provider of basic telecommunication services  will be terminated, on an autonomous basis, in
December 2003, a year ahead of the original commitment.
Mauritius has also joined the Information Technology Agreement and has made, again on an
autonomous basis, successive reductions in tariff rates.WT/TPR/M/90/Add.1
Page 19
Question 3
III.  Trade Policies and Practices By Measure;  (I) Introduction;  paragraph 4.
According to para. 4, the legislation on governmen t procurement has been revised several times in
recent years and is currently under review again by a High Powered Committee.  What measures
are being included in this latest review of Mauritius legislation on government procurement toensure that the procurement process is open and fair for foreign entities?
Answer
A response will be provided in due course.
Question 4
III.  Trade Policies and Practices By Measure;  (2) Measures Directly Affecting Imports;
(ii) Tariffs, other duties and taxes; paragraph 31:
What timelines have been laid out for the rationalization of excise taxation?  How far-reaching will
this programme be?
Answer
Within our plans to reform the indirect taxation system, we have just launched in June 2001, a major
reform of excise taxation, after that of taxation of goods and services (VAT) and that of customs
tariffs.
We have started by –
(i) eliminating existing anomalies and inconsistencies such as the 60% additional duty 
applicable to importation of cars from non-scheduled territories;
(ii) harmonizing the basis of taxation for alcoholic beverages and cigarettes levied on the 
basis of a combination of “ad valorem” and “specific” duties;
(iii) narrowing the gap in the rates of excise duty between imported and locally produced 
cigarettes and alcoholic drinks through increase in the rates applicable on local
manufactures.
Government will pursue this reform which aims at bringing our excise taxation within established
international norms, including an equalization of the excise rates of imported and locally producedgoods.  This has, however, to be carried out in phases to give sufficient time to local producers to
adapt to those changes.  We plan to complete our reform in 3 years’ time.
Question 5
III.  Trade Policies and Practices By Measure;  (2) Measures Directly Affecting Imports;
(ii) Tariffs, other duties, and taxes;  paragraph 34:
According to para. 34, firm-specific duty and tax ex emptions or concessions may be granted by the
Finance Minister on a selective basis (e.g. to incr ease domestic value added or export potential).
What is the average annual value of firm-specific exemptions granted by the Finance Minister?
How many firms received such exemptions in each of the past three years?WT/TPR/M/90/Add.1
Page 20
Answer
Section 4 of the Customs Tariff Act gives discretiona ry power to the Minister of Finance to remit or
refund customs duty leviable under the Act.
This prerogative, which dates as far back as 1970, was used extensively in the 1970s and 1980s when
customs tariffs were very high.  This was applicable to all goods and was meant to boost theindustrialization process of Mauritius.  More specifically, this section was invoked mainly to remit
duty on investment goods, raw materials and other imported inputs used by local industries.
It is now very rarely used given that duties on such goods have been virtually removed from the Tariff
Book, as part of our tariff reform.  This is indicated in the Report of the Secretariat.  Even then, theremission is not firm-specific, but industry-specific and is granted in cases where the input is
classified in the same H.S. code as a finished product or in cases of wrong classification of goods.
This section of the Act has been maintained to cater for practical cases such as refund of duty
incorrectly charged or remission of duty to natural persons and charitable and like institutions onhumanitarian grounds.  It is to be noted that, in the Value Added Tax Act of 1998, no discretionary
power of remission is provided for.
Question 6
III.  Trade Policies and Practices By Measure;  (4) Measures Affecting Production and Trade;
(iii) Competition Policy and Regulatory Issues;  paragraph 94:
According to para. 94, price controls are to be abolished gradually as soon as the competition
legislation is enacted and markets become effectively competitive.  Does this competition legislation
have built-in provisions for the elimination of price controls?  Or will the abolition of price controls
depend on how the Government of Mauritius pe rceives the effectiveness of the forthcoming
competition legislation?
Answer
Government believes that price control may have distorting effects on trade and may not lead to the
protection of the consumer.  Government also beli eves that competition among trade operators is a
more effective way of ensuring regularity of supplies and consumer protection.  In the absence of a
proper regulatory framework and in a small economy, price liberalization may lead to unfair trade
practices like cartels or monopoly to the detriment of the national interest.  Government is therefore
introducing in the weeks to come a Competition Bill which will provide for the setting up of an Officeof Fair Trading and a Competiti on Tribunal which will provide a regulatory framework for trade
liberalization.
Question 7
IV.  Trade Policy by Sector,  (4) Services;  (i) Overview; paragraph 62:
According to para. 62, measures affecting presence of natural persons are unbound.  However, we
understand that Mauritius did bind some measures in its specific commitments.  Please explain the
measures affecting the entry and temporary stay of highly qualified natural persons under the acts
cited in the specific commitments (e.g. Passport, Immigration, Income Tax, Non-Citizen
Employment Restrictions).WT/TPR/M/90/Add.1
Page 21
Answer
The entry and temporary stay of highly qualified natural persons are treated on a case-by-case basis.
Question 8
IV.  Trade Policy by Sector;  (4) Services, (ii) Tourism, paragraph 72:
As indicated in para. 72,. Mauritius has made subs tantial commitments in tourism services.  There
are, however, still some restrictions on investme nt and limitations on market access and national
treatment.  Given the growing importance of the tourism sector in the Mauritius economy, does the
Government foresee further liberalization in tourism?
Answer
Please refer to reply made to question No. 6 of Japan.
Question 9
IV.  Trade Policy by Sector;  (4) Services;  (iv) Telecommunications and postal services;
paragraph 93:
The Secretariat Report indicates that private courier companies can be licensed by the Mauritius
Post Office to provide postal services other than domestic courier services and letter mail.  Couldthe Government of Mauritius please list the “other forms of postal services” that the Mauritius Post
Office licenses private courier companies to provide?
Answer
Under the Postal Office Act 1933, the Postal Services manage and operate the letter mail service.
However Courier Services (transmission of express letters – inbound and outbound) are also offered
by 7 private companies.  Any company can provide parcel service.
Government Report (WT/TPR/G/90)
Question 10
Main Productive Sectors;  Information Technology;  paragraph 34:
According to para. 34, the Government is pursuing it s efforts to create a more favourable climate
for foreign investments.  At the national level, the Government is committed to improving the legal
and administrative framework to offer appropriate propriety protection, hassle-free implementation
and attractive packages of incentives.  Please pr ovide further detail on these incentives.  What are
they? Who will be eligible to receive them?
Answer
All foreign investors in the Information and Communication Technologies (ICT) Sector in Mauritius
benefit from existing investment incentive schemes, including the following:
• No import duty or VAT on equipment and raw materials
• No personal income tax on 2 expatriate staffWT/TPR/M/90/Add.1
Page 22
However, a new package of investment incentives, specifically for the ICT Sector is being devised
with a view to promoting Mauritius as a preferred destination.
Question 11
Domestic Laws and Regulations Governing the Application of Trade Policies, para 46-64:
Paras. 46-54 describe the various domestic laws and regulations governing the application of trade
policies.  What are the current domestic regulations in place to regulate the use of land (allocation
to particular mills and zoning for cane) for the su gar sector?  What are the various labour laws in
place for workers in the sugar sector?
Answer
The Cane Planters and Millers Arbitration and Control Board Act governs the relations between cane
millers who are also owners of cane plantations and cane planters who are not mill owners.  The Act
refers to cane testing, cane payment and the definition of factory areas.  A factory area relates to afactory and to the area in respect of which all canes have to be processed by this factory.
While the miller is not penalised in that he has an adequate level of cane supply, the planter also is not
penalised in that he is paid on the basis of national efficiency criteria.
The Sugar Industry Efficiency (SIE) Act 2001, which has repealed the Sugar Industry Efficiency Act
1998, contains provisions relating to the conversion of agricultural land.  These provisions areessential in a small island where land is a scarce resource.  Unfettered use of land would be highly
detrimental to the future economic development and the necessary ecological equilibrium of
Mauritius.
Land conversion can be effected for specific purposes, in accordance with planning guidelines, and, if
as the case may be, upon payment of a land conversion tax.
The Act spells out the criteria to be used before granting a conversion, it also specifies in a transparent
manner the cases where tax can be exempted.  Ministerial power is limited to the acceptance or
otherwise of the recommendations of a land conversion committee.  Indeed, the Minister cannot remittax payable.
The Sugar Industry Efficiency Act 2001, the Labour Act and the relevant remuneration orders govern
the workers of the sugar industry.  Members of the Staff are governed by agreements between the
sugar companies and the staff association.
The cornerstone of Labour Legislation in respect of the sugar industry is the need to ensure that the
benefits of the preferential trade agreements accrue in a fair manner to all partners, sugar companies,
all of them local owned, planters, workers and staff.
The Sugar Industry Efficiency Act 2001 while maintaining the acquis of those in employment has
introduced two major modifications to the sugar scene, namely:
(i) the introduction of a voluntary retirement scheme, which has met with  significant success; 
and
(ii) the possibility for companies to have recourse to seasonal Labour.WT/TPR/M/90/Add.1
Page 23
Do these allocations, zoning and labour laws crea te any negative externalities on other sectors of
the economy?
Answer
The allocation and zoning of areas for sugar mills relates only to land under cane and has no positive
or negative externality on other sectors.
On the labour front, the sugar sector, mainly on account of its strenuous nature, has difficulties to
attract labour.
Planning directives and the new provisions of the SIE Act 2001 ensure that there is minimal
competition between agriculture and other sectors. Indeed, conversion for purposes of agro-industry,
business parks, biotechnology centres, IT centres, industrial parks and residential parcelling is
possible.
What is the impact of these laws on the co st of production in Mauritius sugar sector?
Answer
The SIE Act 2001 by its provisions, for instance on the labour framework, will significantly
contribute to reduce the cost of production of an industry where labour accounts for some 55% of the
cost of production.
The factory area concept ensures that mills use their crushing capacity optimally.  In addition, the
planter payment system based on National efficiency criteria provides further incentives for mills to
operate as per best practice.
Question 12
Conclusion;  paragraph 131:
With respect to participating more fully in the liberalization process, what are the main concerns of
Mauritius on mode 4 issues and pr oposals in the GATS negotiations?
Answer
The GATS negotiations must be based upon Article XIX mandate taking fully into account Article IV
provisions and the specific concerns of small economies and small developing country suppliers.
Mauritius looks forward to greater flexibility in developed country markets in favour of service
suppliers from small economies under Mode 4.WT/TPR/M/90/Add.1
Page 24
QUESTIONS FROM THE UNITED STATES
Question 1
SUMMARY OBSERVATIONS
(I)  INTRODUCTIONPara. 2The Secretariat’s Report notes that the Mauritiu s economy “has elements of duality:  companies
producing for the domestic market are fairly highly protected, while export enterprises are grantedincentives under various schemes” which has created tensions in resource allocation between the
export and domestic sectors.  What steps is the Government of Mauritius taking or considering
taking to reduce this duality and tension?
Answer
Government has already initiated action to address these elements of duality in the Mauritian
economy.  Thus all manufacturing, tourism, agricultural, agro-industrial and information technology
companies are subject to the same rate of corporate tax, irrespective of whether they are producing for
exports or for the domestic market.  Tariffs are being lowered as a result of, on the one hand, ongoing
reform of tariffs and on the other, the coming into force of the SADC Trade Protocol and the
COMESA Free Trade Area.
The stated objective of Government is to have a harmonized fiscal regime for both export and
domestic sectors.  Government is pursuing its efforts in this direction and has undertaken a
comprehensive study with the assistance of UNCTAD experts with a view to reviewing the fiscal
incentive regime.
Question 2
1.  ECONOMIC ENVIRONMENT
(4)  OUTLOOK
Para. 1The Secretariat’s Report notes that the prospect of economic growth in Mauritius will largely
depend on adjustment measures that the Government will implement to take up the challenges
faced by the economy.  These challenges range from  the scarcity of land resources and skilled and
ageing of the population to challenges in the international environment.  What steps is the
Government of Mauritius taking to face these challenges?
Answer
Policy response
As rightly pointed out by the United States, Mauritius faces daunting challenges, some of which are
not only difficult but also, indeed, insurmountable.  Some of these challenges constitute permanent
constraints.  The scarcity of land resources and other factor endowments have much to do with thegeographical features of the country which is a small island developing economy.  Other seriousWT/TPR/M/90/Add.1
Page 25
challenges which we are having to face are the on-going erosion of trade preferences for Mauritian
exports, mounting pressures on scarce resources, high production costs and the need to improveproductivity of the labour force.  Mauritius has already embarked on a series of second generation
reforms programmes with the objective of establishing the foundations for a more dynamic and
competitive economy.  The policy measures in the following priority sectors are:
Education and Training
The education reform proposed by Government comprises implementing the eleven years of
compulsory schooling, which will require more than doubling the number of places in public
secondary schools in the five years to come; providing all primary and secondary schools with
adequate Information Communication Technology (ICT) resources in order to make all students atleast computer-literate; renewing the primary school curriculum to reflect modern international
standards; and converting part of the best-performing secondary schools into Form VI (Upper
Secondary Level) National Colleges.  These measures will end the intensive competition at the
primary schooling level (Certificate of Primary Education) and break the admission bottleneck at
secondary level.  It will also reduce the skills mismatch which has developed over the years andprovide the necessary skilled manpower for growth sectors.
Under the Skills Development Programme, employers are being encouraged to provide young
graduates and unemployed secondary school leavers traineeship and attachments.  Trainees and
Interns are paid an allowance, equally shared by the employer and the Government.  This scheme has
been designed to assist enterprises to meet th eir demand for highly skilled, educated and experienced
workers.
The University of Mauritius is implementing the Student Work Experience Programme.  The purpose
of the programme is to ensure that the graduates are exposed to the world of work.
The University of Technology, Mauritius (UTM) has been set up this year to provide education and
training at diploma, degree and post graduate level with emphasis on science and technology to meet
the development needs of Mauritius.
The Industrial and Vocational Training Board (IVTB) has already started a programme for Higher
School Certificate (end of secondary schooling) leavers in the field of IT.  Some 1,500 are beingtrained in private training centres for eventual employment in call centres.  The Government of
Mauritius is investing heavily in education.  In addition to the above schemes, several other measures
are being taken including a stipend of Rs 2,000 which is being given to them to encourage Higher
School Certificate (end of secondary schooling) leavers to follow these programmes.  The IVTB is
also implementing a series of retraining programmes for workers.
The Hotel School of Mauritius (HSM) is being expand ed to enable an increase in the annual intake of
full-time trainees from 850 to about 1,400.  In addition, to meet the requirements of the sector in terms
of qualified manpower, the HSM envisages to create Regional Antennas.  The Higher National
Diploma has recently been introduced.
Government has already formulated an Action Plan for the National Integrated Training Strategy.
The main objective is to re-orient the overall training strategy to make it more responsive to the needs
of the economy.  In this context, it is envisaged to set up a top-level mechanism - the Human
Resource Development Council - which will focus, among others, on manpower planning and skills
development.WT/TPR/M/90/Add.1
Page 26
The list of Priority Fields of Study will be completely reviewed to reflect the manpower requirements
of Mauritius for the medium term.  Upcoming sectors will be identified to ensure employmentopportunities for the new entrants on the labour market.
Consolidating and diversifying key sectors of the economy
The whole financial landscape is being given a real stimulus by restructuring our regulatory and
supervisory institutions.  The three Acts that have recently been passed by the National Assembly,
namely the Financial Services Development Act, the Companies Act and the Trusts Act, have set the
stage for this important sector of the economy to move on a higher growth trajectory, both in terms of
value-added and high-skilled job creation.  The Financial Services Commission (FSC) will be fully
operational as from December 2001.  The legal framework will be further consolidated with theintroduction of an Insolvency Bill, a Securities Bill, a new Insurance Bill and a Collective Investment
Schemes Bill.
While the new Companies Act already includes some of the international best practices on corporate
governance, the Ministry of Financial Services intends to develop some non-binding principles of
corporate governance that will serve as a re ference point for the continuous evaluation and
improvement of our legal, institutional and regulatory framework.
A sugar sector strategic plan for the 2001-5 period has been prepared and the necessary legislative
framework, the Sugar Industry Efficiency Act 2001, has been voted.  The plan, inter alia , calls for
substantial cost reduction, an optimal use of land, water resources, a greater use of biomass and a
greater diversification within the sector through the use of molasses, production of special sugars, rumand ethanol.  The plan, while aiming at maintaining the efficiency and viability of the sugar industry,
also promotes the further democratization of ownership in the sugar industry.
Government is preparing a Strategic Plan for the non-sugar agricultural sector.  The Plan will focus on
possibilities of using the region as a production base and supporting the development of the agro-industry in Mauritius.
Because of the inter-linkages among the different sectors, a main Task Force has been set up to devise
strategic policies to promote both EPZ and non-EPZ enterprises and identify the opportunities of the
AGOA.  The Task Force will be developing a strategic plan for restructuring the textile sector.  Themain objective of the plan is to consider the constraints and challenges faced by the textile sector,
devise appropriate measures to improve profitability, increase capitalization, enhance productivity of
enterprises, develop new niches and move up-market, as well as to provide the necessary training for
human resource development.
A new Freeport Legislation has been proposed, which ai ms to give a new boost to the freeport sector.
This Act redefines the respective roles and responsibilities of the Mauritius Freeport Authority
(MFA).
Government is according high priority to the deve lopment of the ICT sector to transform the country
into a Cyber Island.  A strategy is being developed in this regard.  Government will create:
• an ICT Authority to regulate the ICT sector, including, telecommunications,
electronic commerce and online services;  and
• an ICT Promotion Agency which will be responsible mainly for the marketing,
promotion and development of activities necessary to make of Mauritius, an ICT hub.WT/TPR/M/90/Add.1
Page 27
For the further development of the ICT sector and to combat cyber-crime, Government will be
introducing five new legislations, namely the Data Protection Bill, the Privacy Bill, the ComputerMisuse Bill, the Cyber-crime Bill and the Consumer Protection Bill.
Government is giving a new impetus to regional co-operation.  The project of the special economic
zone (SEZ) of 100,000 hectares in Mozambique is being reactivated with a greater regional emphasis.
The pre-feasibility study by PriceWaterHouseCoopers has been completed.  The objectives of thestudy were to delineate the exact areas which could form part of the SEZ;  provide extensive
information on the land and its appropriate type of activities; and provide a plan for and assess the
cost of development of the land.
In line with Government’s policy to further enhance the efficiency of the Port Louis Harbour, the
Cargo Handling Corporation Ltd (CHC) is bracing itse lf for an alliance with a strategic international
partner.  Mauritius emphasises the need for providing technical assistance in this important sector.
Government is shortly introducing a Tourism Bill in the National Assembly to respond to the new
exigencies of this competitive industry.
Enhancing Competitiveness
Mauritius has initiated a thorough and critical review of its tax system with a view to rationalisating
its fiscal incentive regime. A first draft report of the study by UNCTAD is expected by December
2001.  A Task Force has been set up in connection with this study to consider the fiscal strategy
proposals.  Three Sub-Committees have been constituted to look into and assess fiscal policies andprocedures (including the whole tariff structure), non-fiscal incentives and procedures, and the
appropriate legislation.
The capital market will be given an additional stimulus through the development of an active and
liquid secondary  market for Government Debt.  This will enhance open market operations and make
monetary policy more effective.  There will also be greater competition in the money and capital
markets that will enhance the liquidity needs of the markets, induce banks to cover the lending and
deposit interest rate spread and eventually lead to more competitive interest rates that will be
conducive to growth.
A Model Factory is being set up at the Clothing Technology Centre to initiate local enterprises to the
latest technologies and best practice management.  The set-up will comprise state-of-the-art cutting
room equipped with CAD/CAM facilities, coupled with the latest computerised spreading machines,
servo cutters and computer cutting equipment.  The Model Factory will also address the problem of
multi-skilling, re-skilling and skills realignment in the clothing sector.  An intensive trainingprogramme is being designed to retrain operators and turn them into multi-skilled operators capable of
dealing with the different facets of constructed manufacture with higher value-added content so as to
support product upgrade and diversification within the sector.
Government has set up a new project, "Enhancing the Competitiveness of SMEs".  The project is
being financed by the European Commission under the 8
th European Development Fund to the tune of
Euro 7 million (about Rs 175 m).  The project aims at facilitating private sector access to
technological know-how and finance.  SMEs will  be provided the necessary expertise and support
systems in areas such as improving quality and standards of products and processes; development of
skills; and technical assistance for investment in technology.
The Government has decided to open up the internet service provider (ISP) market to a pro-
competitive and duly regulated environment.  The reduction in the annual licence fee has been a majorWT/TPR/M/90/Add.1
Page 28
step towards making the internet available at reasonable cost to people across the island.  This will
ease the process for the rapid digitalisation of the economy.
Government has already prepared a Concept Paper outlining its objectives in the e-sector.  One of the
objectives is that by 2005, its services will be available on line.  So far around 48 application forms,
including applications for passports, driving licences, birth and death certificates, work permits and
courses at the tertiary level, are already on-line.   Government is now preparing an E-government
Master Plan to fine-tune the vision for the short-, medium- and long-term development of
E-government in Mauritius; devise appropriate strategies and policies to achieve this vision; and
produce an action plan for the rolling out of e-government services.
II.  TRADE REGIME
Question 3
(2)  Policy Formulation and Implementation
The Secretariat’s Report notes that the WTO Standing Co-ordination Committee was set up to deal
with the implementation, follow-u p and coordination of trade policy issues that fall under the WTO
agreements.  We would appreciate receiving more information on the membership of the
Committee and the various sub-committees and their various activities.
Answer
Please see the organigramme on page 37.  We would like to emphasize that the WTO Standing Co-
ordination Committee which is chaired by the Minist er of Industry and International Trade comprises
both public and private sector representatives.  Likewise, all the sub-committees comprise public and
private sector representatives.
Question 4
(3)  Trade Policy Objectives
Para. 15The Secretariat’s Report notes that the rates of customs duties on imported inputs are being
reduced to zero, starting with more than 1,300 ty pes of raw material and equipment in the 2000-01
Budget.  What are the next steps for this reduction?
Answer
Please refer to the comprehensive reply to question No. 1 above.WT/TPR/M/90/Add.1
Page 29
III.  TRADE POLICIES AND PRACTICES BY MEASURE
Question 5
(1)  INTRODUCTION
Para. 1The Secretariat’s Report notes that since its last Trade Policy Review in 1995, Mauritius has
continued its trade related reform effort, althou gh border protection remains relatively high in
some areas and notes that manufacturing is the most protected sector with a simple average tariff
of nearly 21 percent.  What steps is the Government of Mauritius taking to reduce these high tariffrates?
Answer
Please refer to comprehensive reply to question No. 1 above.
(2)  MEASURES DIRECTLY AFFECTING IMPORTS
Question 6
(i)  Registration, documentation and procedures
Para. 10
The Secretariat’s Report notes that on January 1, 2000 Mauritius switched from a hybrid system of
customs valuation to the method based on th e transaction value.  How did Government of
Mauritius make this change?
Answer
In conformity with the commitments taken, Government introduced in January 2000 new rules and
procedures that are in line with the provisions of the WTO Customs Valuation Agreement.  TheCustoms Act was amended in the Finance Act 1999 and regulations were made on 23 December 1999
under section 163 of the Customs Act 1988 to swit ch to the WTO valuation system (G.N. 176 of
1999).
Mauritius benefited from technical assistance from the WTO and from the Trade Facilitation Office of
Canada, with funding from the Commonwealth Secretariat.  Both Government and the business
community were fully engaged in this exercise.
(ii)  Tariffs, other duties and taxes
(b)  Tariff structure
Question 7
The Secretariat’s Report notes that in the Uruguay Round Mauritius bound duties on 14.6% of all
its tariff lines.  An increase in the coverage of the bindings would enhance the predictability of the
Mauritius tariff regime.  Is the Government of Mauritius planning to increase the coverage of itsbindings?WT/TPR/M/90/Add.1
Page 30
Answer
The Commitment of Mauritius to the Multilateral Trading System (MTS) is well-known.  We have
sustained our efforts in spite of our severe constraints as a small island economy. In the Uruguay
Round of Negotiations, Mauritius bound duties for industrial products on several tariff lines, availing
itself of the flexibility given to developing countries in the scheduling of their commitments.
Mauritius will pursue its participation in the MTS keeping in view the need to achieve a balancebetween its rights and obligations.
Question 8
The document states that importers may appeal initially to the Customs Advisory Committee and,
subsequently, to the Tax Appeal Tribunal and th e Supreme Court.  However, the 25 to 30 cases
heard by the Customs Advisory Committee compar ed to the 2500 cases adjudicated by the Tax
Appeal Tribunal would seem to indicate that the latter is the first place of appeal.  Is this incorrect?
Answer
Any dispute relating to the classification, valuation and origin of goods at the Customs Department is
first referred to the Customs Advisory Committee (CAC).
Any person who is not satisfied with the decision of the CAC may appeal to the Tax Appeal Tribunal
(TAT).
Any party aggrieved by a determination of the TAT may appeal to the Supreme Court.
It must be emphasized that the TAT deals with not only appeals in respect of Customs but also those
in respect of VAT, Income Tax, Registration Duty and other taxes.  The figure of 2,500 cases relates
mostly to non-Customs matters.
In fact, during the year 1 July 1999 to 30 June 2000, there were only 63 cases of appeal against the
decision of the CAC lodged with the Tax Appeal Tribunal, of which 32 have been disposed by the
Tribunal.
Question 9
Mauritius notes that there are significant differences in the application of excise duties between
imported and locally produced goods.  Excise duties  are said to be significantly higher on imports
than on locally produced goods.  This situation is a violation of the non-discrimination principle.
Does Mauritius intend to equalize these excise duties in the near future?
Answer
Please refer to replies to questions No. 6 from the European Union and No. 4 from Canada.
Question 10
Mauritius states that only “traditional” importe rs are eligible to apply for permits in respect of
goods that are under a non-restrictive system.  What  constitutes a “traditional” importer?  Do all
commercial imports require an import permit?WT/TPR/M/90/Add.1
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Answer
(i) A person holding a trade licence to carry out a specific line of business and importing specific
items for his business is considered to be a traditional supplier for the purpose of issuing an 
import permit.  For example, a jeweller holding a trade licence to manufacture goldwares and 
who need to import gold for the purposes of his trade will be a “traditional importer”.
(ii) Only a very limited number of commercial imports are subject to an import permit.
Question 11
(d) Other duties and taxes
Para. 29The Secretariat’s Report notes that in Septembe r 1998 Mauritius switched from a sales tax to a
value added tax.  How did Government of Mauritius make this change?
Answer
The Value Added Tax (VAT) Act 1998 came into effect as from 7 September 1998, and the Sales Tax
Act 1982 was repealed.
Government’s intention in replacing the Sales Tax on goods by a VAT on goods and services up to
the retail stage was announced by way of a White Paper on Indirect Taxation Reform (which was
circulated to all stakeholders in the country).  This Paper, released in May 1997, outlines the reasons,
the need for and the advantages of the reform.  It strongly argues that the cornerstone of the reform
had to be the introduction of VAT.
In the devising and implementation process of the VAT, Government sought for and obtained
assistance from the IMF.  A resident IMF adviser was attached in Mauritius for over one year.
Besides advising Government on the various features and scope of the VAT, he helped Government
in sensitizing the business community, through a series  of meetings.  Furthermore, prior to the coming
into force of the VAT, Government undertook an aggressive campaign (talks, publication of leaflets,TV and radio spots, etc) to inform the population about the working of the new tax.  The IMF adviser
also ran training programmes for officers of the VAT Department.
Question 12
(v)  Import prohibitions, restrictions and licensing
Para. 41The Secretariat’s Report notes that imports of table potatoes and table salt are subject to quotas.
What is Mauritius rationale for maintaining qu otas on the importation of potatoes and salt?
Answer
These staple and sensitive products were effectually liberalized.  However, we have had to go back to
the old system as experience has shown that market operations have resulted in extreme cases of gluts
and shortages, thus causing serious inconvenience including food security as well as uncertainty forlocal producers who have otherwise been assuring regular supplies of these basic items on the market.WT/TPR/M/90/Add.1
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Question 13
(vii)  Government Procurement
The Secretariat’s Report notes that in October 2000, a new Central Tender Board replaced existing
legislation on government procurement and that a High Powered Committee has been established
to review existing legislation on government pr ocurement and proposed amendments with a view to
ensuring conformity with international norms and practices.  Is the Government of Mauritius
going to consider becoming an observer or a member of the Government Procurement Agreement
or support the proposed Transparency in  the Government Procurement Agreement?
Answer
Please refer to the reply to question No. 9 from the European Union.
Question 14
(3)  MEASURES DIRECTLY AFFECTING EXPORTS
(iv)  Export subsidies and duty and tax concessionsThe Secretariat’s Report notes that various incentives schemes are available to Mauritian
companies producing for export.  It notes the Freight Rebate Scheme has been transferred to the
from the Agricultural Products Export Promotion Authority which ceased operation in January2001 to the Agricultural Marketing Board and is bein g reviewed.  What is the present status of the
Freight Rebate Scheme?
Answer
Under a new plan under preparation for the non-sugar sector, the whole issue of export of agricultural
products, incentives;  permits, if any;  authorizations;  and certifications (SPS in particular) is being
reviewed.
(2)  MEASURES AFFECTING PRODUCTION AND TRADE
(iii) Competition policy and regulatory issuesQuestion 15
Para. 89The Secretariat’s Report notes that Mauritius is finalizing draft legislation on competition.  When
is it going to be submitted to the Parliament?
Answer
The Bill is to be introduced in the National Assembly shortly.WT/TPR/M/90/Add.1
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Question 16
Para. 93
The Secretariat’s Report notes that the number of  products subject to price control was increased
in 2000.  What caused this increase in the number of products?
Answer
A response will be provided in due course.
Question 17
(iv)  State-owned enterprises and privatization
The Secretariat Report notes that Mauritius has several parastatal bodies through which the State
intervenes in economic activities and that a White Paper on Privatization and Workers
Participation proposed an Economic Restructuring Action Plan.  What is the Mauritius plan to
move forward on privatization?
Answer
In the light of the experience from other countries, both developing and developed, Mauritius has
adopted a pragmatic and cautious approach to privatization.
As stated in the Secretariat report at paragraphs 99 and 100, Government has recently significantly
reduced its shareholding in Air Mauritius, the State Bank of Mauritius Ltd, and Mauritius Telecom.  It
also announced in the 2001/02 Budget Speech its in tention to enter into strategic alliances with
established international operators for the following public enterprises: the Cargo Handling
Corporation, the Central Electricity Board, the Central Water Authority and the Postal Services.
Question 18
(v)  Intellectual Property rights
Para. 106
The Secretariat’s Report notes that Mauritius is finalizing new legislation on patents and trade
marks, and drafting legislation on industrial desi gns, geographical indications, and layout designs
of integrated circuits with a view to complying with its obligations under the WTO Agreement onTRIPS.  When is it going to be submitted to the Parliament?
Answer
At the TRIPS review of Mauritius in June 2001, we circulated our draft legislation and we invited
comments/suggestions from Members.  Our draft legislation has been subsequently reviewed and
finalized in the light of the observations of Memb ers and further clarifications from the WIPO.  The
Bills will be introduced in the National Assembly shortly.WT/TPR/M/90/Add.1
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CHAPTER IV:  TRADE POLICIES BY SECTOR
Question 19
(2)  AGRICULTURE
(c)  Food CropsPara. 33The Secretariat’s Report notes that Mauritius agricultural policy is aimed at diversifying
production away from sugar.  How is Mauri tius increasing the production of food crops?
Answer
Food crop production in Mauritius is carried out:
• on land that has been traditionally devoted to food crops;
• on new land brought to this cultivation and which would have been under other non-
sugar crops, tea for instance;
• in cane interlines or cane rotational land i.e. land available between the uprooting of a
7 – 8 year old cane and the plantation establishment of a new plantation.
It cannot therefore be inferred from paragraph 33 that food crop production is being effected at the
expense of the sugar sector.  Instead, sugar land is being used in an optimal manner for both sugar and
food crops.
Government is finalizing a strategic plan for the non-sugar sector which will cover production and
processing aspects in Mauritius and in countries of the region, Mozambique for instance.
Question 20
(3)  MANUFACTURING
The Secretariat’s Report notes that Mauritius manufacturing sector has increased from 15 percent
of real GDP in 1980 to 20 percent.  Preferential  market access provided by certain developed
countries has contributed to this.  What steps has the Mauritius Government taken to encourage
the private sector to take advantage to these preferential access programs?
Answer
We wish to re-iterate the importance of preferential market access for the development process of a
severely constrained small island economy like Mauritius.  Government will pursue its promotion
policy, jointly with the private sector, both for traditional and more recent preferential market access
programmes.  Government, along with all other stakeholders, is finalizing an Action Plan for themanufacturing sector.  Traditionally, awareness campaigns have been carried out by Government in
close cooperation with private sector institutions by way of the following actions:
• Establishment of the EPZ scheme
• Awareness creationWT/TPR/M/90/Add.1
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• Aggressive marketing
• Emphasis on quality
• Technology diffusion scheme
• Adoption of a clustering strategy
(4)  SERVICES
Question 21
(ii)  TourismPara. 64The Secretariat’s Report notes that tourism is the third largest source of Mauritius foreign
exchange earnings.  In recent ye ars the Government has taken steps to encourage joint-promotion
efforts from the public and private sectors.  What type of activities has Mauritius focused on? Is the
Government considering reducing restrictions on foreign investment in the tourism sector and onforeign participation in tour operating and other services?
Answer
The size of the hotel parks on the island is quite substantial.  Additional expressions of interest to
build new hotels are being received at the Board of  Investment (BOI).  Additionally, several projects
to develop leisure parks, mainly golf courses have also been received at the BOI. On the other hand
projects to provide diversified leisure activities have not so been forthcoming.
A three-pronged approach is being adopted:
(a) Flagship companies
To attract flagship hotel companies with international repute to undertake management 
contracts.
(b) Appropriate leisure projects
To promote the setting up of further leisure projects, such as:
• Spa complexes
• Health and Therapeutical centers
• Karting
• Driving ranges
• Indoor entertainment complexes
• Parasailing
• Bungy jumping
• Parachuting
• Leisure villages
• Lagoon-based marine activities
• Amusement and attraction parks
• Enhanced night life
• Round the island, dinner-dance cruisesWT/TPR/M/90/Add.1
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(c) Supporting Services
To develop supporting services through
• Hotel Management Institutes
• Centre of Excellence for Hotel Catering
• Advance Training Centres for the hospitality industry
For the second part of the question, please refer to answer provided to question No. 6 of Japan.
Question 22
(iii)  Financial Services
The Secretariat’s Report notes that financial services currently contributes some 14 percent to real
GDP and has grown by seven percent in recent years.  Mauritius par ticipated in the WTO
Financial Services Agreement and made commitments in several areas.  Is the Government
considering increasing its commitments in financial services?
Answer
Mauritius made commitments in 1998 in accor dance with the General Agreement on Trade in
Services (GATS).  These commitments highlighted the liberal environment in which this sector
operates.
Presently, Mauritius is undergoing a major re-structuring of the regulatory framework in the financial
services sector with the setting up of a single unified regulatory authority for the non-banking
financial services sector.  New legislation and guidelines will be introduced to reinforce the
supervision and regulation of the sector.  As it may be noted, all initiatives and efforts by the
Government in this area of work are being pursued within the overall framework of progressive
liberalization and national policy objectives as provided under the GATS architecture.
Question 23
(iv)  Telecommunications and postal services
The Secretariat’s Report notes that international phone calls are relatively expensive.  What steps is
the Government taking to encourage competition and reduce the costs of such telecommunication
services?
Answer
The monopoly of the present provider of basic telecommunication services will be terminated in
December 2003, one year ahead of commitments taken at the WTO in this sector.
International phone call rates will go down after the forthcoming tariff rebalancing exercise.  It is also
expected that the operationalisation of the submarine Optical Cable Fibre Project (SAFE Project) in
early 2002 will lead to reduced costs.WT/TPR/M/90/Add.1
Page 37ORGANIGRAMME
Sub-Committee
TRIPSSub-Committee
Trade and Services
Investment
Technical Committee
on
Accountancy ServiceTechnical Committee
Telecommunication
ServicesTechnical Committee
Financial ServicesTechnical Committee
on Engineering
and
Architectural ServicesTechnical Committee
Tourism ServicesTechnical Committee
GATS RulesTechnical Committee
on
Air Transport ServicesSub-Committee
Trade in ServicesSub-Committee
Trade and
Competition PolicySub-Committee
on
AgricultureCore Group of the WTOWTO Standing
Co-ordination
Committee
__________