WORLD TRADE  
ORGANIZATION  WT/TPR/M/152 
7 November 2005 
 (05-5199) 
Trade Policy Review Body 
5 and 7 October 2005 Original:   French 
 
 
 
TRADE POLICY REVIEW 
 
TUNISIA 
 
Minutes of Meeting  
 
Chairperson:  HE Mr Don Stephenson (Canada) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF TUNISIA 4  
III. STATEMENT BY THE DISCUSSANT 7  
IV. STATEMENTS BY MEMBERS 9  
V. REPLIES FROM THE REPRESENTATIVE OF TUNISIA AND ADDITIONAL 
COMMENTS 12  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 17 
  
   
Note:   Advance written questions by WTO Me mbers and the replies provided by Tunisia are 
reproduced in document WT/TPR/M/152/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/152 
 Page 3 
 
 
 I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. At the opening of the second Trade Policy Re view meeting for Tunisia, held on 5 and 
7 October 2005, the Chairperson welcomed the dele gation of Tunisia, led by Mr Mondher Zenaidi, 
Minister of Trade and Crafts, as well as the discu ssant, Mrs Heather Grant (Canada) who, as was 
customary, spoke in her personal capacity and not as  a representative of her country.  In accordance 
with the established rules, she had made available in advance the main points she intended to raise 
(document WT/TPR/D/128). 
2. The Chairperson recalled the purpose of the tr ade policy review mechanism and the main 
elements of procedure for the meeting.  Th e report of Tunisia was contained in document 
WT/TPR/G/152, and the report of the WTO Secretariat in document WT/TPR/S/152.  Copies of the 
written questions submitted in advance by Japan, Ca nada, the European Communities, Argentina, the 
United States, Switzerland, Brazil, and Korea had been sent to the Tunisian delegation.  These 
questions and the replies provided by the Tunisian delegation appeared in document 
WT/TPR/M/152/Add.1. 
3. The Chairperson remarked that the documentati on prepared for the meeting testified to the 
importance of international trade in goods and services to the Tunisian economy.  Since its last review 
in 1994, Tunisia had embarked on a bilateral liberali zation process with its main trading partner, the 
European Union, as well as a trade facilitation prog ramme.  However, it seemed clear that further 
reforms aimed at rationalizing of the trade regime  by simplifying the tariff structure and reducing the 
rates, and by dismantling non-tariff barriers, would help Tunisia to adhere more closely to the 
principles of the WTO and better exploit its compar ative advantages.  Moreover, an improvement in 
its multilateral tariff commitments would make its tr ade regime more transparent and predictable.  
Members were therefore interested in knowing what the Tunisian Government's current projects in the 
trade policy area were. 
4. Before giving the floor to the Tunisian delega tion, the Chairperson pointed out that revised 
draft rules of procedure had been circulated to Members as document WT/TPR/W/34.  This draft took 
account of the changes agreed by Members in adop ting Second Appraisal of the Operation of the 
Trade Policy Review Mechanism.  Since no comments had been received concerning these revised rules, the Chairperson wished to propose the dr aft for adoption by the TPRB at the end of the 
morning's meeting. WT/TPR/M/152 
Page 4  
 
 II. OPENING STATEMENT BY THE RE PRESENTATIVE OF TUNISIA 
5. The representative of Tunisia
, after offering his thanks, pointed out that since 1994, Tunisia 
had been pursuing its integration into the world eco nomy with a view to stimulating economic growth 
and improving the welfare of its population.  Th anks to these reforms, coupled with sound 
macroeconomic management, the c ountry had been able to improve  its position on international 
markets, adapt to the demands of globalization,  and develop an open and competitive economy. 
6. Much had been achieved:  (i) an openness ratio of 96 per cent in 2004 thanks to the 
liberalization of trade and an average annual increase in FDI of nine per cent, of which more than one 
third went to the manufacturing industries;  (ii) a diversified economy and a steady growth in exports, 
spearheaded by tourism and the manufacturing indu stries;  (iii) rapid and sustained GDP growth, 
which had contributed to a sharp reduction in pove rty and an improvement in living standards and 
quality of life;  (iv) a rate of inflation brought down to 2.4 per cent on average between 2000 and 2003;  a structural current account deficit of only 2 per cent by the end of 2004, in spite of a number 
of adverse factors in 2002-2003;  a budget deficit brought down to an average of 2.4 per cent of GDP (2002-2004);  (v) a share of graduates from institutions  of higher education that was expected to reach 
23 per cent of the working population by 2016;  and (vi) an attractive environment for private 
investment.  Thanks to these performances Tunisia, ra ted fortieth in the world and first in Africa, was 
among the emerging countries to have r eceived a rating of investment grade. 
7. The consolidation of the principle of freedom of trade and current transfers had formed the 
basis of the reform of external trade established by  the law of 1994.  The reforms aimed at facilitating 
external trade by reducing the time taken to co mplete foreign trade operations, rationalizing 
procedures and documents, and reducing transaction co sts.  The first programme to be implemented 
(2000-2004) resulted in the establishment of an in tegrated system of electronic management of 
external trade procedures.  The second programme , which was launched in 2005 as part of a huge 
export development project, involved the establishmen t of a customs risk management system, more 
transparent and effective standards, technical re gulations and conformity assessment procedures, and 
a system for measuring trade efficiency indicators.   Moreover, action had already been taken to 
further simplify import and export procedures, to harmonize the activities of the various departments 
concerned, and to rationalize the documentation a nd reduce the number of documents required.  The 
ongoing review of the Customs Code would make pr ocedures more transparent, strengthen the rights 
of economic operators, and make  customs more efficient. 
8. As an original Member of the WTO, Tunisia was committed to the multilateral trading system 
and the establishment of a balanced and inclusive world economic order designed to promote growth 
and sustainable development.  The Doha Work Programme was an opportunity to incorporate the 
development dimension effectively and operationally in the results of the negotiations.  Tunisia would 
make every effort to ensure that the programme  was successfully implemented.  Moreover, the 
processes of multilateral and regional integration were complementary and mutually reinforcing 
movements, inasmuch as their common objective was to facilitate trade liberalization by reducing or 
indeed progressively eliminating barriers to trade.  In conformity with the WTO agreements, Tunisia was endeavouring to ensure appropr iate interaction between the mu ltilateral and regional frameworks, 
taking account of development needs and of the requirements of progressive liberalization and 
integration.  By concluding free trade agreements, Tunisia was seeking to intensify and diversify its 
economic and trade relations, and to consolidate its  position in order to attract more FDI and thus 
favour technology transfer. 
9. This integration process had involved far reac hing changes in tariff protection:  the WTO 
Agreement on Customs Valuation had been implemen ted;  a maximum protection rate of 43 per cent 
had been set for non-agricultural products and 150 pe r cent for agricultural products;  and the number 
of rates applied had been reduced from 53 in 2003 to  14 in 2005.  Further targeted reductions would  WT/TPR/M/152 
 Page 5 
 
 
 be introduced, bringing in the MFN tariff closer to the tariff applied to preferential imports.  At the 
same time, there had been a tax reform aimed at simplifying the tax system, expanding the tax base and modernizing tax administration.  Measures had been taken to computerize tax services and install a paperless system for filing tax returns.  Finally, a study of the tax system had been launched in order 
to keep up the accelerated pace at which the economy was be ing liberalized and opened up. 
10. The development of Tunisian exports would focu s on greater diversification of their structure 
while consolidating the share of the textiles and cl othing sector.  In this connection, the electrical, 
electronic and mechanical industries and the services  sector were performing strongly.  Services were 
destined to play a more significant role in Tuni sia's development policy and in the emergence of a 
knowledge economy, whose development was based on four complementary and interdependent 
"pillars":  education and training;  research and development;  information and communication 
technologies;  and systems of innovation and organi zation.  Substantial progress had already been 
made in these areas, particularly in upgradi ng human resources, creating technology centres, 
intensifying scientific research, diversifying specia lization at higher education level, and building up 
infrastructure. 
11. Important steps had been taken to strengthen the banking sector and diversify the sources of 
financing to the benefit of private investment.  The financial market had undergone an important 
legislative and institutional transformation with a view to increasing the contribution of direct 
financing to the economy.  As regards insurance,  the most important developments involved the 
reform of the legal framework, the consolidation of  the financial position of insurance companies, and 
the development of certain branches.  The transpor t sector had been opened up to private investment; 
reforms had involved the liberalization of passenger transport activity, company restructuring, and 
improvements to the infrastructure.  Tourism was one of the pillars of the Tunisian economy, and 
Tunisia was establishing itself as one of the foremost tourist destinations in the southern Mediterranean.  It was also one of the sectors most open to foreign investment.  The strategy for the 
development of tourism involved reducing its vulnerability to exte rnal shocks and improving its 
competitiveness.  Furthermore, thanks to the quality  of its human resources, Tunisia had developed 
efficient and competitive services:  legal, IT, cultura l, design, consultancy, engineering, architectural, 
accounting, marketing, health and construction services. 
12. Agriculture played a leading role in combating the exodus from rural areas, improving 
income, stimulating rural development, and improvi ng food security.  Tunisia was one of the leading 
exporters of olive oil, dates, seafood, and various organic fruits and vegetables.  This dynamic sector 
coexisted with small, family-type farms, growing sel f-sufficiency crops with little market integration.  
Tunisia's small-scale agriculture needed protectio n and support in order to guarantee a minimum 
income for peasant farmers in the rural areas and to help with its integration into the domestic and 
foreign markets. 
13. Tunisia, which was a member of most of the international conventions on the protection of 
intellectual property, had modernized its legislati on in conformity with the WTO TRIPS Agreement.  
The strengthening of the National Standardization a nd Intellectual Property Institute and the creation 
of the Tunisian Copyright Protection Organization had contributed to the promotion of intellectual 
property and the fight against counterfeiting and piracy.  The measures aimed at suppressing such practices both on the domestic market and at the border were having a deterrent effect. 
14. Tunisia expected the ongoing WTO negotiations – particularly in the area of non-agricultural 
market access, trade in services, and agriculture – to help with the realization of its economic and 
social objectives.  In the area of non agricultural market access, the reduction of tariffs would be 
decisive.  Although there was ample scope for bi nding coverage, there was little scope for reducing 
protection of the domestic industry.  Tunisia had set itself the goal of creating 70,000 enterprises by 
2009 just when the textiles and clothing sector was passing through a phase of extensive restructuring WT/TPR/M/152 
Page 6  
 
 following the implementation of the WTO Agreement on Textiles and Clothing and the end of the 
Multifibre Agreement.  Tunisia had submitted its in itial offer on services within the time-limit, and 
supported the principle of liberalization that favoured improved economic competitiveness, increased 
valued added, technology transfer, and job creati on.  It hoped to obtain easier access to the markets 
for business and professional services, in which it enjoyed major advantages.  That would require 
more flexible travel and residence procedures and conditions for Tunisian service providers based on 
more transparent immigration policies and the reco gnition of diplomas and qualifications.  Tunisia 
hoped to take advantage of the negotiations on ag riculture to develop and diversify its agricultural 
exports.  Those negotiations should also help to ad just the liberalization of trade to the specific 
conditions prevailing in each country ;  and should take account of the need to minimize the adverse 
short-term effects of liberalization;  and sh ould enable the adjustments made to improve 
competitiveness. 
15. Its constant endeavours and achievements did not blind Tunisia to the fact that the integration 
of its economy into the world economy in order to take full advantage of the multilateral trading 
system called for even greater efforts at ever y level.  The action programme for 2004-2009 would 
make it possible to launch a new round of reforms to speed up growth, establish tighter control over 
the management macroeconomic balances, create mo re private sector enterprises, increase exports, 
liberalize the movement of capital, develop high-va lue-added services, promote research, and build a 
knowledge economy.  The country was firmly committed  to bringing this programme to a successful 
conclusion in order to consolidate the gains that had been made and create the conditions for a more 
competitive economy and a more prosperous society.  WT/TPR/M/152 
 Page 7 
 
 
 III. STATEMENT BY THE DISCUSSANT 
16. The discussant  observed that Tunisia had come a long way and done a lot to build up the 
economy to its current state of development.  Th e economic reforms introduced since the middle of 
the 1980s had enabled it to achieve an average GDP growth rate of 5 per cent per year since 1994.  
Thanks to sustained investment in training, it ha d acquired a qualified labour force, and poverty had 
declined considerably.  In terms of competitiven ess, Tunisia had been rated first among African 
countries.  However, the reforms that had been undertaken needed to be extended and completed. 
17. Thanks to its favourable geogr aphical position, its growing pe r capita GDP, its controlled 
budget deficit, and its encouraging social indicator s, such as the increase in rural income and the 
growing literacy rate, Tunisia's potential was far fro m negligible.  However, the unemployment rate 
remained high, and the non-convertibility of the dinar undermined the transparency of prices and 
could also discourage foreign investors while at the same time complicating the trade regime. 
18. Tunisia also faced major challenges.  Some of the leading industries responsible for its 
economic growth (such as textiles) were threatened, and had to adapt to a new and considerably more 
competitive environment.  Others, in particular the local enterprises, still enjoyed considerable 
protection.  Perhaps a source of even greater con cern was the fact that its model based on aggressive 
promotion of exports and protection of so-called "strategic" local industries appeared to be less and 
less compatible with the demands of an economy that it was trying to modernize and integrate more fully into the multilateral trading system.  Aware of  these challenges, the authorities had introduced a 
number of reforms, such as the reduction of tariff pr otection and the total abolition of the provisional 
supplementary duty (DCP), or attempts to open up  services.  However, these reforms needed to be 
deepened:  tariffs were still high, particularly fo r agricultural products, and there were still numerous 
barriers to FDI in services. 
19. It was impossible to speak of reform and change without mentioning Tunisia's active role in 
bilateral and regional agreements.  Its important agreement with the EU reduced tariffs on non-
agricultural products, and had resulted in an increase in  Tunisia's exports to its leading market.  This 
was no negligible matter, given that 80 per cent of Tunisian exports went to the EU.  However, the 
agreement was largely limited to non-agricultural pr oducts, and had favoured so me reforms more than 
others.  The other agreements signed by Tunisia were the Greater Arab Free Trade Area, the Arab-
Mediterranean Free Trade Agreement, and the free trade agreement with EFTA.  Although there were 
certain benefits, the coverage of these agreements  varied and sometimes overlapped, generating a 
certain amount of confusion for private enterprises. 
20. Tunisia was also placing considerable hope in the Doha Round ne gotiations, and had a 
particular interest in agriculture (partly owing to its position as a net food importing country), non-
agricultural market access, and services. 
21. Although plenty of reforms had been introduced, it remained to be seen  what their broader 
effect would be and whether they had attained their objectives.  For example, while efforts to 
modernize the customs system, such as the simplific ation and computerization of trade procedures or 
the implementation of the WTO Customs Valuat ion Agreement, had been considerable, many 
enterprises (in particular those producing for th e local market) continued to describe customs 
clearance time as a major constraint and blamed the number of institutions involved, the frequent 
physical inspections, and the long and complicated technical controls.  And although exporting enterprises benefited from a separate and simplified regime, that regime was not necessarily simple.  
Indeed, it was not always easy to sort out the differe nt incentives and advantages:  more than half of 
the customs declarations submitted in 2003 had applie d for tax incentives in the form of exemptions 
from import duties and taxes. WT/TPR/M/152 
Page 8  
 
 22. The tariff system was poorly integrated and very complex, with rates varying according to the 
nature of the product, its origin, and its func tion.  There was room for rationalization and 
simplification, both for importers and exporters, and for resident or non-resident enterprises. 
23. Also an essential part of the reform process were  the sectors in transition and those that had a 
potential for sustained growth.  The clothing industr y, which had spearheaded the country's economic 
development and still represented 40 per cent of its goods exports and accounted  for close to 250,000 
jobs (of which one third could disappear), was undergoing major restructuring.  Many of these changes were inevitable, and resulted from the implementation of the WTO Agreement on Textiles 
and Clothing.  The considerable effort that was being put into modernizing and diversifying this 
industry and increasing its value added in Tunisi a would benefit from a simplification of trade 
regulations, which would facilitate the commercia l transactions of the manufacturing enterprises, 
enhance their transparency , and reduce their costs. 
24. Agriculture employed 16 per cent of the active population.  Not many people knew that 
Tunisia was in fact one of the four leading export ers of olive oil in the world, since much of its 
production was sent in bulk to the EU to be refi ned, bottled, and marketed as coming from another 
country.  Opening up this industry to foreign invest ment might help to speed up its modernization and 
to develop a product with greater value added. 
25. Services represented a new focal point for growth .  With its qualified labour force and low 
costs, Tunisia had definite advantages in niches such as tourism and certain professional services.  However, a further opening up of infrastructure ser vices would be required in order to provide access 
to the fresh capital and expertise needed for modern ization, and increased transparency would ensure 
that there was a better understanding of the role of  the numerous institutions involved in the sector 
and of the criteria for market access.  These reform efforts would gain in efficiency if they were 
accompanied by reforms targeting greater integration between the export and import sectors.  Such reforms could help to break down the dualism creat ed within the Tunisian economy by the export 
promotion strategies applied over the last 30 years.   Greater opening up to the outside world would 
help all of these sectors, and the current round of negotiations would offe r Tunisia new opportunities 
in the services area.  WT/TPR/M/152 
 Page 9 
 
 
 IV. STATEMENTS BY MEMBERS 
26. The representative of Kenya  stressed Tunisia's good economic performance since 1994 and its 
progress in liberalizing trade.  However, the country  was still faced with a high level of poverty and 
unemployment, a volatile economy de pendent on Europe for its revenue , and the threat of losing its 
textile industry's share in the traditional markets.  Kenya encouraged Tunisia to continue its reforms 
with a view to achieving sustainable growth that would enable it to integrate its economy into the 
world economy on a more competitive basis.  Kenya ag reed with Tunisia on the need for globalization 
based on equitable rules, and commended Tunisia for fulfilling many of its WTO commitments and 
for its active participation, particularly within the African group. 
27. The representative of the United States  noted the increase in trade and investment between the 
United States and Tunisia.  The opening up of the Tunisian economy was appreciated, as were its 
reforms aimed at bringing the country's trade regi me into conformity with its WTO commitments.  
Other positive trade measures had also been taken.  The United States representative stressed the dual 
nature of the economic activity involved in impor t substitution and export promotion policies, as well 
as the growing importance for Tunisia of preferential trade agreements, and the significant gap 
between MFN rates and the preferential rates.  Th e United States urged Tunisia to consider further 
reductions in MFN rates, and requested additional information concerning:  the special clearance 
treatment granted to wholly export-oriented ente rprises;  other duties and levies;  the three-tier 
technical control system, which Tunisia was asked  to notify;  and any manufacturing and services 
activities that were able to benefit from expor t advantages.  The United States hoped, in the 
framework of the Doha Development Agenda, to receive a revised services offer from Tunisia. 
28. The representative of Egypt , speaking on behalf of the African Group , welcomed Tunisia's 
participation in a series of agreements aimed at bo osting regional and bilateral trade.  Similarly, 
Tunisia wanted to strengthen sout h-south cooperation.  Egypt commended Tunisia for its efforts to 
liberalize and facilitate its trade and to reform its economy, and welcomed its active role in the Doha 
Development Agenda, in particular on issues of inte rest to the developing countries and the African 
Group. 
29. The representative of Japan  recalled the economic cooperati on between Japan and Tunisia 
and Japan's aid to development in Africa.  He  noted Tunisia's good economic performance and hoped 
that Tunisia would continue its reforms and its liber alization efforts, and that it would take steps to 
solve the pending problems.  The liberalization of services, in particular, would contribute to the 
growth and competitiveness of its economy.  While he  praised Tunisia for its initial offer on services, 
he hoped that Tunisia would continue to liberalize its services and to create an attractive trade 
environment for enterprises.  Tunisia had made comm endable efforts in the area of trade facilitation;  
however, the predictability of its trading system should be improved. 
30. The representative of Canada  noted that a number of changes had contributed to the strong 
performance of the Tunisian economy since 1994,  and stressed Tunisia's commitment to trade 
liberalization.  He also noted the good commercial re lations between Canada and Tunisia, particularly 
with respect to trade in cattle .  Canada wished to know whether Tunisia wanted to introduce 
legislative amendments in order to benefit from the conditions offered by Canada under paragraph 6 
of the Doha Declaration on TRIPS and Public Heal th.  Employment should continue to be one of 
Tunisia's major concerns, particularly in the wake of the dismantling of the Multifibre Agreement.  
Tunisia was encouraged to pursue its trade facilitati on efforts, and to intensify its policies aimed at 
increasing private and foreign investment.  Cana da hoped that there would be progress in the 
liberalization of tariffs, and welcom ed the planned reduction in the num ber and level of tariff rates.  
This reduction could lead to a decrease in requests fo r exemptions from import duties and taxes, thus 
making up for the resulting losses in revenue.  Tuni sia was also invited to continue its global 
integration without confining itself to the EU. WT/TPR/M/152 
Page 10  
 
 31. The representative of Argentina
 commented on Tunisia's strong economic performance 
following its macroeconomic reform s.  It remained the most competitive economy in North Africa, 
with a development based on textiles exports and re venue from tourism.  Argentina wished to know 
the outlook for the textiles sector and the consequen ces of the expiry of the Multifibre Agreement.  
How was the tourism sector expected to evolve, and what were the possible consequences of the 
enlargement of the EU in terms of FDI?  There was no reason why Tunisia's strong economic 
performance could not continue if its reforms favoured the creation of new growth centres, 
particularly in the services area.  Although there had been privatization efforts, certain sectors still 
needed to be opened up to competition.  He wondered whether Tunisia's different preferential 
agreements might not cause trade distortions and add to the complexity of its trade regime. 
32. The representative of Brazil  congratulated Tunisia for its economic performance since 1994 
which he attributed to its macroeconomic refo rms and the promotion of investment.  Brazil 
encouraged Tunisia to continue with its macroec onomic adjustments and its reforms aimed at creating 
new growth centres complementary to the textiles and clothing industry.  It also supported Tunisia's economic and social development plans aiming at job creation and equitable distribution of wealth.  It 
welcomed Tunisia's trade facilitation efforts, whic h would help to make the Tunisian economy more 
competitive and to integrate it into the world economy. 
33. The representative of th e European Communities
 spoke of the sound economic situation that 
had emerged in Tunisia thanks to its policies target ing the privatization, de regulation and reform of 
many sectors that were important to the country's development.  Its current development plan called 
for social development programmes that focussed on the creation of wealth and the development of 
human resources, which explained why Tunisia had sought to facilitate its trade.  The association 
agreement with the EU had led Tunisia to undert ake important reforms to boost the competitiveness 
of its enterprises.  However, its MFN tariffs and its charges remained high.  He encouraged Tunisia to 
further liberalize certain services that were essenti al to its development.  He also stressed the 
importance of streamlining government procurement pr ocedures, and encouraged Tunisia to accede to 
the WTO Agreement on Government Procurement.  Tunisia played a leading role in the Doha 
Development Agenda and in regional initiatives aimed at opening up markets.  However, it needed to 
ensure proper coherence between its measures at th e regional level and at the global level.  He 
welcomed the significant steps taken by Tunisia to strengthen the link between trade and sustainable 
development.  The EC encouraged Tunisia to open up its economy completely.  Finally, the EC 
representative asked Tunisia to explain the impact of its trade policy on its development and on the 
development of the countries in the region. 
34. The representative of Jordan, on behalf of the Arab Group , observed that thanks to its reforms 
and intelligent macroeconomic management, Tunisi a had been able to modernize its economy and 
integrate into the world economy.  He highlighted the growing involvement of the private sector in economic activities, and the important measures taken in the areas of trade facilitation, opening up of 
markets, and intellectual property.  The Tunisian economy had also benefited from an improvement in 
transactions with its trading partners. 
35. The representative of Korea
 welcomed Tunisia's structural reforms and its macroeconomic 
policy.  Tunisia and Korea had healthy economic rela tions, including active cooperation in the area of 
information and communication technologies.  While praising its efforts to integrate into the 
multilateral trading system, the representative of Ko rea wondered how Tunisia viewed the free trade 
agreements in the context of its world trade polic y, and urged Tunisia to work towards reducing its 
MFN tariffs in order to broaden its trade opportun ities.  Korea wished to know whether Tunisia 
intended to abolish the obligation for foreign automobile manufact urers wishing to export their 
vehicles to Tunisia to buy components for such vehi cles worth at least 50 per cent of the volume of 
their automobile exports to the country.  Altho ugh customs formalities had been automated, Korea 
wondered how Tunisia intended to improve wh at were still long and complex procedures.  WT/TPR/M/152 
 Page 11 
 
 
 36. The representative of Paraguay, as Chairman of  the Informal Group of Developing Countries , 
stressed that Tunisia stood as an example for the developing countries in that it had brought peace and 
cooperation to its population, had opened up to the wo rld, and had reformed its economy.  The result 
was sustained growth, which had been transferred to  the population.  It was important that Tunisia 
should participate actively in the Doha Round if it was to overcome the challenges facing it, and that 
it should cooperate with other developing countries. 
37. The representative of Mauritania  highlighted the considerable progress that Tunisia had made 
thanks to policies and reforms aimed at improvi ng the welfare of its citizens and laying the 
foundations for an open and competitive economy.  Several of its measures testified to its 
determination, in making these changes, to respect its WTO comments, and to its considerable efforts 
to strengthen the regional and multilate ral dimensions of its foreign trade.  Tunisia was now classified 
as one of the emerging countries, and its openness ratio was one of the highest in the world.  Finally, 
he recalled the sound and multifaceted relations that existed between Mauritania and Tunisia. 
38. The representative of Morocco  recalled the fraternal relations that linked his country with 
Tunisia.  Morocco welcomed the progress achieved by Tunisia on the road to development and the 
reforms that had enabled it to achieve these signifi cant results.  Tunisia's commitment to promoting 
the multilateral trading system and its participati on in the WTO negotiations were also commendable. 
39. The representative of Pakistan  recalled the excellent bilateral relations between Pakistan and 
Tunisia based on common economic interests.  While Tunisia should be commended for its efforts to 
improve its economic performances, it continued to apply high tariff rates.  Diversification of its trade 
would enable Tunisia to be less dependent on certain products. 
40. The representative of Turkey  noted the excellent political  and economic cooperation and 
growing trade relations between his country and Tu nisia.  The success of Tunisia's economic reforms 
explained its strong economic performance.  Turk ey welcomed the curre nt reforms aimed at 
diversifying exports and to furt her integrating the Tunisian economy into the multilateral trading 
system.  However, in order to overcome certai n challenges relating to its economic and trade 
structure, Tunisia could improve the allocation of its resources by moving towards an export-oriented 
political strategy and away from its dual promotion policy.  Turkey and Tunisia were cooperating in 
the WTO negotiations on agriculture, textil es, and non-agricultural market access. 
41. The representative of Nigeria  commended Tunisia for its different commercial and economic 
reforms, and hoped that they would continue raisi ng the standard of living of the Tunisian people. 
42. After thanking Members for their statements, the representative of Tunisia  noted its excellent 
links with its trading partners and stressed the im portance of the African dimension in its foreign 
policy.  Tunisia was also seeking closer links with  South America and Asia.  He hoped that the World 
Summit on the Information Society in Tunis would provide a good opportunity for a closer look at Tunisia's achievements in the economic, social and cu ltural spheres, and in the area of development in 
general. 
43. The Chairperson
 proposed the adoption of the draft Rules of Procedure for Meetings of the 
Trade Policy Review Body.  The Members accepted the draft. WT/TPR/M/152 
Page 12  
 
 V. REPLIES FROM THE REPRESENTATIVE OF TUNISIA AND ADDITIONAL 
COMMENTS 
(i) Macroeconomic environment 
44. Tunisia's initial development scheme based on import substitution had changed completely 
thanks to the different reforms undertaken sin ce the middle of the 1980s.  Starting in 1994, the 
economy had opened up to the outside world.  A large number of measures were implemented to 
bring together the total and pa rtial export regimes, and only fiscal differences still remained.  
Moreover, Tunisian growth was largely fuelle d by new sectors that involved a high level of 
knowledge and were dynamic in  terms of investment a nd creation of value added 
(telecommunications, IT, business services, and the fina ncial sector);  their share had reached 18 per 
cent of GDP in 2004.  In spite of the continued liberalization, the upgrading of the productive sector, 
and the restructuring of public enterprises, the unemployment rate had sunk below 14 per cent in 2005 
thanks to a proactive policy of and job promotion creation. 
45. Tunisia's economic performance had resulted in the introduction of the current convertibility 
of the dinar in 1993.  The process leading to full convertibility had already begun.  The regulation of 
exchange rates and current operations had become mo re flexible.  The strategy for introducing full 
convertibility of the dinar was made up of three main  components:  deepening of the reforms in the 
financial sector in order to consolidate the fina ncial base of the banking sector;  strengthening of 
competitiveness, stimulation of exports, and preservation of external balances in order to reduce the external debt burden to approximately 40 per cent of GDP;  and continuation of a strict monetary 
policy that essentially targeted inflation while fa vouring exchange rate flexibility of the dinar. 
46. There had been privatizations in all sectors.  The gradual approach that had been adopted was 
justified by the need to ensure the necessary condi tions for their success, namely:  restructuring of 
public enterprises before privatization;  adaptation of the legal framework;  reform and modernization 
of the financial market;  and introduction of mechanis ms to limit the negative social impact.  The high 
degree of foreign participation in the privatization pr ocess had been dictated by the need to ensure the 
transfer of know-how.  At the same time, State involvement was being phased out through the 
granting of concessions.  Several measures had been taken to stimulate investment, and particular 
attention was being given to se tting up industrial zones and creati ng technology parks and business 
incubators as a means of encouraging synergy be tween research institutes and enterprises, thereby 
helping to build up the knowledge economy. 
47. Tunisia had launched reforms aimed at speeding up growth with a view to raising per capita 
income to 5000 dinars in 2009 while at the same time preserving its internal and external financial 
balances and speeding up job creation in response to the growing demand from young graduates.  
These objectives would be attained by buildi ng up an innovation – and knowledge-based economy, 
and developing private investment through the creati on of enterprises in growth sectors.  Particular 
attention would therefore be paid to human re sources development, to the modernization of 
infrastructure, and to the creation of a proper business environment. 
(ii) Trade policy 
48. Tunisia had lived up to its WTO commitments.  To  the extent that it had applied tariffs at 
rates higher than the bound rates, this was due to discrepancies – since corr ected – that arose during 
the transposition of tariff headings to the nom enclature for customs clearance of products. 
49. The liberalization of trade through the progr essive reduction of tariff protection was a 
fundamental component of Tunisia's economic and trade policy.  This process had consisted of a 
complete roll-back in protection under the free-trade ag reements with its main trading partners,  and a  WT/TPR/M/152 
 Page 13 
 
 
 narrowing of the gap between MFN treatment and pr eferential treatment.  Current tariff protection vis-
à-vis  the EU for all tariff lines that were not con cerned by the dismantling of tariffs amounted to 
18 per cent, and only 6.3 per cent for non-agricultu ral products, which would be totally exempted by 
January 2008.  The same preferential treatment ha d been granted to products from EFTA countries.  
All products from the Arab world had been totall y exempted from customs duties since 2005.  About 
85 per cent of Tunisian imports came from count ries with which it had free trade agreements. 
50. Regarding MFN duties, 15 per cent of tariff lin es entered at zero duty;  customs duties for 
582 non-agricultural products had been reduced;  cap ital goods and raw materials entered duty free;  
duties for a list of products had been reduced by 50 per cent in order to bring MFN rates closer to the 
preferential rates;  and the tariff had been simplified by a reduction in the number of rates from 53 to 
14.  Thus, the average MFN rates applied to non-ag ricultural products was 23 per cent, as compared 
to 6.3 per cent under the agreement with the EU. 
51. At the same time, measures had been take n to simplify customs procedures and reduce 
clearance time.  The automatic sorting of clearance data into three channels had been implemented, 
and thanks to the introduction of a paperless system  for foreign trade operations, all of the required 
documents could be submitted electronically.  Co mpanies working in the export sector could 
withdraw their goods by submitting a simplified decl aration.  The Customs Administration was also 
studying measures to strengthen those already take n through the implementation of the Agreement on 
Customs Valuation. 
52. The reform had also affected the procedur es of the conformity assessment bodies.  An 
integrated system for the electronic management of  foreign trade procedures had been introduced, the 
legislation revised, the number of products subjected  to systematic control reduced, and the functions 
of the different conformity assessment bodies estab lished.  There was no longer any overlapping of 
competences between the control ag encies and the other agencies responsible for checking conformity 
with standards.  Other trade facilitation reforms woul d be introduced to enhance the fluidity of trade 
and reduce transaction time and costs.  Moreover, in  order to ensure efficiency and predictability, 
Tunisia refrained from applying any quantitative impo rt restrictions for commercial reasons, and had 
not resorted to contingency trade measures. 
53. Starting in 1988, a number of important tax re forms had been introduced:  the former system 
of turnover tax had been abolished and VAT introdu ced;  direct taxes, registration fees and local 
taxation had been reformed;  and the Tax Adva ntage Code and the Code of Fiscal Rights and 
Procedures had been promulgated.  These reforms ha d been consolidated by various finance laws, and 
had had a positive impact on fiscal revenue.  A st udy was under way to propose measures to further 
rationalize the tax system and align it to best interna tional practices so that the country could meet the 
requirements for integration into the world economy. 
54. Tunisia's government procurement procedures we re transparent:  non-discriminatory control 
was carried out at every stage by independent internal and external bodies.  The selection was made 
on the basis of technical criteria, and national preference had been reduced to 10 per cent. 
55. Tunisia's trade was rooted in the Mediterran ean region.  Through its Partnership Agreement 
with the EU, Tunisia had consolidated the pref erential treatment enjoye d by its non-agricultural 
products on the European market, and improved mark et access conditions for its agricultural products.  
It had undertaken to phase out tariff protection fo r non-agricultural products by 2008, and to improve 
market access for certain agricultural products.  Since the entry into force of that agreement, Tunisia's 
economic performance showed that it had successfully  completed its transition period.  Imports from 
the EU had registered a reasonable progression, and exports to the EU had evolved positively. WT/TPR/M/152 
Page 14  
 
 56. A study of the impact of the implementation of the Greater Arab Free Trade Area (GAFTA) 
on Tunisian trade in that region would help to iden tify the mechanisms to be developed in order to 
boost such trade and take advantage of the signi ficant potential in the region.  Negotiations on 
liberalization of services on the basis of Article V of the GATS had been launched in order to deepen 
inter-Arab regional integration.  Tunisia's trade in  goods with the GAFTA countries was totally free.  
Tunisia had harmonized the different liberalization regimes envisaged by the GZALE and the bilateral 
agreements with the countries making up the zone, giving preference to the application of the GZALE 
regime. 
57. The harmonization of the preferential regimes at the Euromed level had been achieved by 
aligning the dismantling schemes on the scheme adopted  with the EU at the product list level, 
adopting the same timetable for the reduction of tariff protection for EFTA, and applying identical 
rules of origin.  The Pan-Arab Committee on Rules of  Origin had begun a revision of the current rules 
with a view to aligning and harmonizing th em with the Pan-Euro-Mediterranean rules. 
58. The multilateral and regional integration processes were complementary, and reinforced each 
other, since their common objective was to facilitate the liberalization of trade flows by reducing or 
progressively phasing out barriers to trade.  In conformity with the WTO Agreements, Tunisia was 
making every effort to ensure appropriate in teraction between the multilateral and regional 
frameworks, taking account of its needs in terms of development, progressive liberalization, and 
integration. 
59. Tunisia expected the ongoing WTO negotiations – pa rticularly in the areas of non-agricultural 
market access, trade in services, and agriculture – to help it to achieve its economic and social 
objectives.  With regard to non-agricultural mark et access, tariff reductions would be decisive.  
Tunisia hoped to obtain better market access for its suppliers of business services, including 
professional services, an area in which it had consid erable advantages.  This would require more 
flexible travel and residence procedures for Tuni sian service suppliers, which meant more transparent 
immigration policies, and the recognition of diplom as and qualifications.  Tunisia was prepared to 
improve its initial offer on services as long as its dema nds were satisfied.  It hoped to take advantage 
of the agriculture negotiations to develop and di versify its exports.  These negotiations must take 
account of a need to minimize the negative impact of  liberalization in the short term, and enable the 
adjustments made to produce thei r positive influence on competitiveness. 
60. Tunisia had ratified most of the internationa l conventions on intellect ual property, and was 
ensuring that they were implemented.  Under the Tunisian Constitution, they took precedence over 
ordinary laws.  Domestic laws had been adopted to cover industrial, literary and artistic property, 
while neighbouring rights were protected on the basis of the WTO TRIPS Agreement and ordinary 
Tunisian law.  Moreover, the modernization of indus try also promoted industrial property.  Tunisia 
had participated in the adoption of the Gene ral Council Decision on para graph 6 of the Doha 
Declaration, a decision which was important in co mbating serious diseases and its provisions needed 
to be incorporated in the TRIPS Agreement.  It hoped that this issue would be resolved rapidly. 
(iii) Sectoral policies  
61. While consolidating the position of the traditi onal sectors, sectoral policy was turning more 
and more towards new, dynamic sectors, and essentia lly consisted in boosting competitiveness and the 
role of the domestic and foreign private sector. 
62. The agricultural sector was dominated by small- scale farming, and was subject to irregular 
rainfall conditions.  Seven per cent of the useful ag ricultural area was irrigated.  In spite of these 
constraints, the results testified to the competitiv eness of the sector and the rational allocation of 
resources.  Following a policy of improvement of food security and preservation of the role of  WT/TPR/M/152 
 Page 15 
 
 
 agriculture in rural development, the new agricultural policy aimed to moderate the impact of climatic 
vagaries and prepare the sector for further liberalizati on.  To that end, Tunisia has pursued ambitious 
programmes to mobilize hydraulic resources and pr eserve the water and soil in order to ensure 
sustainable development, with an emphasis on sanita ry and product quality aspects in order to adapt 
domestic production to international requirements and st andards.  Thus, health legislation was revised 
with a view to reorganizing sanitary controls w ithin the country and ensuring better sanitary and 
phytosanitary coverage.  In additio n, this policy called for the promotion of agronomic research,  the 
organization of the profession,  the development of  quality signs and labels,  and the upgrading of 
specialized laboratories. 
63. At the same time, the Stat e was withdrawing from the production and marketing of 
agricultural products, and liberalization efforts were  being pursued according to economic and social 
conditions.  Tunisia had a free pricing policy, with the exception of durum wheat and soft wheat.  The 
implementation of the structural adjustment progr amme for the agricultural sector had to a great 
extent liberalized agriculture.  Input and interest ra te subsidies had been eliminated, and the marketing 
boards had partially lost their monopoly.  Agricu ltural activities were financed in accordance with 
market rules, and the eligibility criteria for ba nk loans were established in accordance with the 
profitability of the activity and the borrower's ability to reimburse the loan and to provide guarantees.  
The agri-food sector showed considerable potentia l for development which was often undermined by 
market distortions.  Tunisia had high expecta tions from the ongoing multilateral negotiations to 
improve access to foreign markets and enhance the value of its agri-food products. 
64. The manufacturing industry (approximately 19 per cent of GDP) had played a significant role 
in the country's growth.  FDI had increased and ne w and promising sectors had emerged, with growth 
rates of 20 per cent per year;  indeed, their share in  exports was expected to increase to 20/25 per cent 
by 2009.  The integration of the economy into the world economy called for restructuring that involved job losses.  Tunisia had taken account of th is fact by progressively preparing its economy for 
these new challenges, and introducing appropriate instruments. 
65. The textiles sector had been liberalized in accord ance with the timetable of the Agreement on 
Textiles and Clothing.  A strategy had been implemen ted to promote the sector and prepare it for this 
process by encouraging enterprises to move from subc ontracting to co-contracting, to diversify the 
sources of supply of raw materials, and to keep the costs of certain services under control.  In spite of 
the massive arrival on Tunisia's traditional export markets of Asian products, exports had evolved 
positively, investment had progressed, and new projects had developed with forei gn participation.  An 
improvement in the quality range of exported products was expected, with prospects for an increase in 
higher skilled jobs.  Thus, the loss of jobs would be limited, and confin ed to the short-term. 
66. Tunisia ranked third in the world for the exportation of phosphate derivatives.  In view of the 
surge in crude oil prices, a programme had been in troduced to control energy consumption, and a law 
on energy conservation had been promulgated.  Privatization of the en ergy sector had begun. 
67. Services (approximately 54 per cent of GDP) had experienced steady growth.  This sector was 
destined to develop and gather strength in view of  Tunisia's advantages in terms of human resources 
and geographical proximity to Europe, and thanks to the reforms aimed at upgrading certain services 
and opening up to the private sector.  Important steps had already been taken in the telecommunications and transport areas.  There w as considerable foreign participation in tourism 
following the privatization of a large number of hot els.  Its development relied on the upgrading of 
hotel complexes, the diversification of its products, a nd the restructuring of its finances.  The financial 
sector was also being heavily reformed, as was the insurance sector.  The capital market had been 
strengthened in preparation for an opening up th at would make it easier to finance the economy.  
Other emerging services played an increasingly important role (health services, private higher WT/TPR/M/152 
Page 16  
 
 education services, and business services);  their development required easier and broader access to 
the international market under mode 4. 
68. The discussant
 asked Tunisia to elaborate on its plans to reform the dinar and the time period 
involved.  She wished to have further information on the tariff cuts planned by 2008, and asked whether Tunisia envisaged harmonizing its bilateral or regional agreements and signing others.  She 
wished to know how Tunisia intended to manage certain tariff cuts and th e protection of domestic 
production, and asked the Tunisian representative to elaborate on the efforts aimed at diversifying and 
increasing value added in the textiles sector a nd adapting to the consequences of job losses. 
69. The representative of the EC
 congratulated Tunisia for its improved customs procedures.  He 
wished to receive statistical data on government procurement. 
70. The representative of Canada  asked whether the local content requirement for the production 
of medicines had recently been abolished.  He wished to know whether the necessary criteria for 
investment or the exercise of a profession were available on the Internet. 
71. The representative of the United States  wished to know whether Tunisia intended to simplify 
tariff exemptions.  The United States advised Tuni sia to re-examine its incentives based on export 
performance in order to ensure their conformity with WTO provisions. 
72. Replying to the questions of the di scussant, the representative of Tunisia  noted that the 
introduction of total convertibility of the dinar had already begun.  He hoped that serious progress 
would be made by 2009 in liberalizing capital move ments so that total convertibility of the dinar 
could perhaps be declared during the 2007-2011 period.   Other regional and bila teral agreements were 
planned.  Textile exports had resisted the dism antling of the Multifibre Agreement and competition 
from Asia on Tunisian markets.  Although their quantity had declined, their value had increased, 
which meant that Tunisia's policy of restructur ing the sector was well under way.  Alongside the 
textiles sector, other sectors were also very dynamic and capable of compensating for job losses in the 
textiles sector if market access for Tunisian products could be improved.  The best protection for the 
domestic industry was the competitiveness of Tunisian products.  The Tunisian economy's openness 
ratio was 95 per cent;  exports should account for 50 per cent of GDP in 2009;  and protection could 
therefore only be limited in duration.  In response to the EC, the Tunisian representative reaffirmed 
his country's commitment to trade facilitation, and pointed out that the statistical data could be found 
on page 35 of the written replies.  In response to Ca nada, he noted that if needed, an additional reply 
would be provided on the necessary criteria for partic ipation in the capital of travel agencies.  And 
replying to the United States, he pointed out that the study on taxation would shed light on the 
incentives relating to the investment regime. 
73. The representative of Canada  asked whether the criteria provided in the written questions 
were available on the Internet. 
74. The representative of Tunisia  replied that all of the informa tion was available on the web sites 
of the different agencies concerned.  WT/TPR/M/152 
 Page 17 
 
 
 VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
75. This second Trade Policy Review of Tunisia has enlightened us on the country's economic 
and trade performance since the first review in 1994 .  Our discussions were facilitated by the active 
and open participation of the Tuni sian delegation, headed by HE Minister Mondher Zenaidi, by the 
discerning comments of the discussant, and by the inspiring statements of Members. 
76. Members congratulated Tunisia on its good economic performance and its progress in 
improving its standard of living, achieved largely th anks to its macroeconomic reforms over the past 
decade.  Several Members enquired about the regiona l and bilateral agreements  concluded by Tunisia 
and about the role of trade policy and the multilatera l trading system in its strategy of sustainable 
development and reduction of unemployment.  In view of Tunisia's economic regulation, Members 
felt that in order to stimulate the economy and re duce unemployment, there was a need for further 
reforms aimed at liberalizing the trade and fore ign exchange regimes, eliminating the dualism 
between the export sector and the domestic sect or, and reducing the presence of the State. 
77. Some Members congratulated Tunisia on its recen t efforts in the area of trade facilitation and 
dismantling of quantitative import restrictions.  Ho wever, customs clearance  procedures remained 
slow and technical inspections complex.  A numb er of Members invited Tunisia to improve its 
multilateral tariff bindings while reducing its app lied MFN tariffs (32 per cent on average, and 
67 per cent for agricultural products), some of whic h exceeded the bindings.  There was also mention 
of the need to rationalize the numerous incentives (including investment, production and, in particular, export incentives) as well as the high internal taxes. 
78. Tunisia was asked to clarify the prospects for diversification of the manufacturing sector in 
view of the growing competition in the leading export sector, textiles and clothing.  Certain Members 
felt that if Tunisia were to open up its services s ector (telecommunications, and postal and financial 
services), for example by strengthening its commitments under the GATS, the economy would be more attractive to foreign investors and the c ountry would be in a better position to exploit its 
comparative advantages in sectors such as touris m, business services, and health and wellness 
services.  Tunisia was also asked to clarify its lo cal content measures (pharmaceutical and automotive 
industries), the revision of the 1955 Customs Code, government procurement, and the protection of 
intellectual property. 
79. Members welcomed the Tunisian delegation's in -depth replies to the different questions. 
80. In conclusion, this meeting had brought to lig ht the economic reforms introduced by Tunisia 
and provided an opportunity to discuss further refo rms that could help it to deregulate its economy in 
general and to rationalize its trade re gime in particular.  Broader trade reform should enable Tunisia to 
adhere more closely to the principles of the WT O, to overcome the dualism within its economy, and 
to exploit its comparative advantages more effectiv ely.  Coupled with reduced State involvement in 
economic activities, these reforms would lower produc tion costs and revitalize the Tunisian economy.  
Moreover, an improvement in its multilateral commitm ents would help to make its trade regime more 
transparent and predictable.  I call upon Members to  support Tunisia in this effort by guaranteeing 
improved access to their markets. 
__________