WORLD TRADE  
ORGANIZATION  WT/TPR/M/197 
14 May 2008 
 (08-2221) 
Trade Policy Review Body 
2 and 4 April 2008  
 
 
 
TRADE POLICY REVIEW 
 
MADAGASCAR 
 
Minutes of the Meeting  
 
Chairperson:  HE Mr Mario Matus (Chile) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF MADAGASCAR 4  
III. STATEMENT BY THE DISCUSSANT 5  
IV. STATEMENTS BY MEMBERS 7  
V. REPLIES BY THE REPRESENTATIVE OF MADAGASCAR AND ADDITIONAL 
COMMENTS 11  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 15  
 
 
Note: Advance written questions by WTO Member s and the replies provided by Madagascar are 
reproduced in document WT/TPR/M/197/Add.1, and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/197 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. In opening the meeting of the second Trade Po licy Review of Madagascar, held on 2 and 
4 April 2008, the Chairperson (HE Mr Mario Matus)  welcomed the delegation of Madagascar, headed 
by HE Mr Ivohasina Razafimahefa, Minister of the Economy, Trade and Industry, and the discussant, 
HE Mr Mohammed Loulichki (Kingdom of Morocco)  who, as usual, would speak in his personal 
capacity.  In accordance with the established proc edures, the discussant had made available, in 
advance, outlines of the main issues he intended to raise (document WT/TPR/D/172). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Madagascar was contained in document 
WT/TPR/G/197 and that of the WTO Secretariat in  WT/TPR/S/197.  Questions submitted by the 
delegations of Brazil;  India;  th e United States;  Canada;  Colombia ;  Japan;  Hong Kong, China;  and 
the European Communities had been transmitted to the delegation of Madagascar.  Copies of these 
questions, together with the replies provided by th e delegation of Madagascar, were available in the 
meeting room. 
3. The documents prepared for the Review  underlined Madagascar's positive economic 
performance since 2002, with strong economic gr owth, lower inflation, an improved financial 
situation and progress made in combating poverty.  The economic growth had primarily been boosted 
by an expansion of industrial activity in free zon es and in construction, financial services, mobile 
telecommunications and transport.  The economic reforms implemented by Madagascar for a number 
of years, particularly in the area of trade libera lization, had contributed towards this achievement.  
Aid, together with debt reduction, had enabled pove rty alleviation programmes to be implemented.  
Access to financing and the supply of water and elect ricity, needed to be improved, together with 
transport and communications services.  A stable ma croeconomic environment had to be maintained, 
a competition policy implemented and measures take n to remedy shortcomings in governance. 
4. Madagascar had lowered its MFN rate from a simp le average of 16 per cent in 2001 to 13 per 
cent in 2007, and in 2005 other import duties and charges had been abolished.  Nevertheless, the 
broad exemptions had an adverse effect on the tr ansparency of the tariff regime, excise duty still 
applied to tobacco and alcoholic be verages contrary to the principle of national treatment.  The tariff 
structure hampered the competitiven ess of certain exports and encour aged the creation of enterprises 
in the free zones.  The report by the Secretariat al so indicated that Madagas car's participation in the 
WTO could be improved through technical assistance, wh ich would be particular ly valuable inasmuch 
as the Government intended to expand the scope of its commitments under the GATS.  Madagascar 
also planned to pursue regional integration thro ugh its membership of the COMESA and the SADC, 
and had recently signed an interim Economic Part nership Agreement with the European Union. WT/TPR/M/197 
Page 4  
 
  II. OPENING STATEMENT BY THE REPRESENTATIVE OF MADAGASCAR 
5. After expressing his thanks, the representative of Madagascar
 said that his country's 
macroeconomic stabilization and sectoral programme was being implemented in conformity with the 
Madagascar Action Plan (MAP).  The MAP define d the development plan for the period 2007 to 
2011, in accordance with the Millennium Developmen t Goals (MDG), and the private sector was at 
the centre of the strategy for its implementation.   Economic growth had increased since 2003, there 
was sound implementation of budgetary policy, and Ma dagascar had benefited from the inflow of aid 
and capital.  Fiscal pressure had improved, inflati on was going down and the national currency was 
rising.  Exports had been diversified and, together  with import controls, their growth had led to a 
reduction in the external trade deficit.  The devel opment of industrial free zones had been encouraged 
and air transport liberalized, making the tourism sector one of Madagascar's most important sources 
of foreign currency. 
6. Trade policy focused on continued liberalization and opening up the economy to global trade.  
The Diagnostic Trade Integration Study carried out by  the Integrated Framework agencies, terminated 
in 2003, had led to the identification of measures to facilitate the inflow of foreign investment (FDI).  
The single window had been created in 2003, followed by the establishment of the Economic 
Development Board of Madagascar (EDBM) in 2006,  and a new investment law.  The State gave 
priority to good governance in order to enhance th e business climate and also to developing the basic 
infrastructure. 
7. The majority of customs duties were ad valorem  and Madagascar's tariff was divided into 
four categories.  In order to facilitate trade, th e State continued to collaborate with the Société 
Générale de Surveillance (SGS) in the context of th e company GasyNet.  The rules laid down in the 
WTO's Customs Valuation Agreement had been re produced in the Customs Code.  The State had 
limited the scope of exemptions and had reor ganized the tax and customs administration. 
8. A segment-by-segment approach had been adopted  for the development of the primary sector, 
which absorbed 75 per cent of the labour force, in order to increase exports of high-quality 
agricultural products and handicrafts.  In order to conserve its fisheries resources, Madagascar 
planned to scale down fishing activities, although forest ry was on the increase.  In the energy sector, 
Madagascar had liberalized the price of fuel, all of  which was imported.  Because of electricity supply 
problems, reorganizing the State-owned company JIRA MA was one of the Government's priorities.  
A new Mining Code and a law on large-scale inv estment in mining had allowed the country's 
considerable mining resources to be developed.  Ec otourism would be developed within a sustainable 
framework.  The Government had withdrawn fro m transport and fixed telecommunications.  
Industrial policy focused on local processing using th e raw materials available and on more effective 
competition. 
9. Madagascar intended to boost its  exports through a number of administrative measures and by 
searching for new outlets.  In order to improve ma rket access, the Government would pursue regional 
integration (COMESA, SADC, Indian Ocean Commissi on) and was part of the Eastern and Southern 
African Group in the context of the Economic Part nership Agreement with the European Union.  
Madagascar benefited from the preferential regime under the AGOA.  Trade agreements and 
investment promotion and protection agreements (IPPA) had been signed.  Within the WTO, the 
Malagasy Government was endeavouring to abide by  the Organization's rules.  It was ready to 
collaborate with other WTO Members in the resump tion and finalization of negotiations under the 
Doha Development Agenda.  As an LDC, Madag ascar would like to receive technical assistance, inter 
alia, through Aid for Trade, in order to build its  capacity and allow it to achieve its goals. 
  WT/TPR/M/197 
 Page 5 
 
 
  III. STATEMENT BY THE DISCUSSANT 
(1) MACROECONOMIC ENVIRONMENT  
10. The discussant  drew attention to the economic moment um that had followed the end of the 
political and social crisis in July 2002, with an average rate of growth of 6.2 per cent between 2003 
and 2006.  According to the Malagasy authorities, this figure could reach 8 per cent on average over 
the period 2007 to 2011, provided that the domestic  situation (social and political stability) and the 
external situation (increased foreign direct inv estment and external aid) were favourable.  The 
Government had to resolve certain structural prob lems such as the lack of rigour in budgetary 
management and in government procurement, as well as the absence of a consistent policy for 
contending with the informal sector. 
11. Since the monetary reform in 2005, the Central Bank of Madagascar had pursued an anti 
inflationary policy and had been involved in direct  action on the foreign exchange interbank market.  
Liberalization of payments for current transactions  had been reinforced by the Foreign Exchange 
Code adopted in 2006.  Since 2003, the Malagasy  Government had adopted measures to reduce the 
deficit.  At the same time, it had strengthened its tr ade relations with its partners in the region (SADC, 
COMESA, IOC) and the EU, thereby enabling it to diversify its exports a nd enhance the economic 
climate for foreign investors.  This diversificati on, free floating of the currency and the expansion of 
industrial free zones had led to a reduction in the ex ternal current account deficit.  Madagascar had 
also embarked on the liberalization of its services such as transport, tourism, telecommunications and financial services. 
(2) T
RADE POLICY  
12. It was Madagascar's objective to become fully inte grated in international trade in conformity 
with the rules of the WTO.  Its policy for liber alizing foreign trade focused on promoting exports, 
creating a modern institutional framework, encourag ing the private sector and collaborating closely 
with regional and international organizations.  Although it was an original member of the WTO, 
Madagascar did not have an interministerial comm ittee to follow up trade issues and he would like to 
know the reason for this.  He also called on the Malagasy authorities to explain how Madagascar 
intended to derive greater benefits from the re gional opportunities available and also the problems 
encountered in applying trade preferences.  Mada gascar had diversified its bilateral relations by 
signing agreements on protecting and encouraging investment, including one with Morocco.  The 
Malagasy authorities had taken concrete action to  improve the rule of law and good governance. 
13. Madagascar had abolished some import taxe s and preshipment inspection and had moved 
ahead with computerizing commercial customs opera tions.  The gradual reduction of tariff protection 
since 2001 was welcome but further efforts had to  be made.  Madagascar should bind more non 
agricultural lines.  Technical assistance would be u seful in order to ensure the application of the 
WTO's customs rules.  The principle of national treatment should be fully applied in the case of 
imported beverages and tobacco.  Considerable progress had been made in the area of standardization.  
A revision of the industrial property regime was envi saged for the near future and he would like to 
receive details of the new regime as well as the measures taken to combat piracy and counterfeiting. 
14. Madagascar had established a foreign direct i nvestment regime that was intended to be 
attractive and reliable.  Nevertheless, areas such as fixed telecommunications remained closed to foreign investors until June 2008.  He would like to  receive information on the opening up of the 
telecommunications sector to competition.  He woul d also like to know the Malagasy Government's 
plans for enhancing transparency in government procurement, the subject of a new regime and 
gradually being implemented. WT/TPR/M/197 
Page 6  
 
  (3) S
ECTORAL POLICIES  
15. Madagascar had considerable agricultural poten tial, but it was not sufficiently exploited.  
Agricultural development was a priority in the MAP and one of the objectives was a green revolution, 
about which he would like to have further details .  He would like to know what measures had been 
taken to exploit Madagascar's potential for agricu ltural exports.  It was also planned to increase 
fisheries exports and he would like to know whether fishermen received assistance during the 
biological recovery period.  He congratulated Madagascar on the efforts undertaken to protect forests.  
The new regulatory framework for mining and investment in large scale projects should help the development of such activities, but he encouraged  the authorities to pursue the objective of local 
processing of crude ore and to remain sensitive to e nvironmental exigencies.  He would also like to 
know whether oil had in fact started to flow in Ma rch 2008.  As liberalization of electricity had not 
yielded any results, he would like to be informed of the programme for reorganizing the JIRAMA and 
rural electrification projects. 
16. Madagascar also had considerable tourism pot ential and had seen a noticeable increase in the 
number of tourists as a result of the opening up of the skies, the creation of tourism land reserves and 
the encouragement of the tourism economy.  The development of this sector was, however, hampered 
by the inadequacy of domestic transport services,  supplies of electricity and drinking water, 
telecommunications and the cost of  air transport.  He wondered what plans the authorities had to 
improve the regulatory framework for tourism and fo r overcoming the transport inadequacies, an area 
for which he recommended the development of an integrated national strategy. 
17. Developing handicrafts focused on increasing their share of the GDP, but growth in exports 
would be the result rather of reorganization of th is activity and putting it on a more professional basis, 
together with its integration into the formal sector.  He asked whet her there was to be a joint action 
plan involving the Government and craftsmen in or der to raise the quality of products and increase the 
number of outlets. 
18. Industry only accounted for 16 per cent of Mada gascar's GDP, but it was planned to boost this 
activity through the measures set out in the Industr ial Policy Letter.  In addition, the Government 
implemented a policy to develop training, undert ake restructuring programmes, upgrade companies 
and promote partnerships and joint ventures.  Ne vertheless, he had noted with concern that these 
industries were not competitive, partly because of ta riff costs, and sought clarification on the progress 
being made in the restructuring programmes and in  the action taken to promote industrial exports. 
19. Madagascar was one of the group of least-d eveloped countries and needed further and 
sustained technical assistance from its economic partne rs and international in stitutions in order to 
promote its international trade.  Madagascar's tr ade-related technical assistance needs concerned a 
number of areas, ranging from the implementation of trade agreements, more active participation in multilateral negotiations, the formulation of trade policies, building up production and marketing 
capacity, and integrating its trade policies into the national development strategies, including that for 
eliminating poverty.  He would like to know what priorities had been set by the Malagasy authorities 
in that respect.  WT/TPR/M/197 
 Page 7 
 
 
  IV. STATEMENTS BY MEMBERS 
20. The representative of Brazil  noted that bilateral trade with Madagascar had tripled between 
2002 and 2007, reaching US$9.4 million.  Brazil mainly exported sugar, textiles, bulldozers, tractors and tyres to Madagascar, while vanilla, clothing and precious stones were its major imports.  Bilateral 
trade had further potential in mining, construction an d oil services.  Madagascar had made efforts to 
attract foreign investment, particularly in tourism and telecommunications.  The start of oil extraction 
and of production of nickel and cobalt in the n ear future would help to sustain economic growth, 
whose benefits should be shared w ith its population to alleviate poverty.  The SADC free-trade zone, 
which would come into effect in 2008, would a llow Madagascar to deepen its trade links with 
SADC members, and also strengthen its trade with all WTO Members. 
21. The representative of India
 said that bilateral trade with Madagascar had tripled between 2002 
and 2007, reaching US$65 million.  India's main e xports to Madagascar were rice, cotton fabrics, 
pharmaceutical products, generators, engine oil and building materials, and it imported scrap metal, 
cashew nuts, cloves and gemstones.  India was funding an intranet project and training slots, and encouraged Madagascar to participate in the Pa n-African E-network.  Madagascar was still a poor 
country, with three quarters of the population engage d in agriculture, mainly subsistence farming, and 
Madagascar was encouraged to improve performan ce in this sector.  His delegation called on the 
authorities to describe their plan s for the electricity sector. 
22. The representative of the United States
 noted the improvement in Madagascar's macro-
economic fundamentals as a result of the implementati on of economic and structural reforms, notably 
fiscal reform and privatization.  Madagascar's e xports to the United States in 2007 under the AGOA 
were estimated to be US$268 m illion, mainly in textiles and apparel.  Madagascar had been a 
beneficiary of US$74 million in USAID-funded tr ade capacity-building projects between 1999 and 
2007, and had been the first country to sign a M illennium Challenge Account (MCA), which was 
releasing US$110 million in grant money.  Trade a nd investment reforms had helped to encourage 
more foreign direct investment and trade.  Mada gascar was encouraged to pursue trade liberalization 
by expanding the scope of tariff bindings , lowering bound rates and making broader 
GATS commitments.  It was also encouraged to pus h forward on transparency and implement various 
WTO Agreements, strengthen the IPR regime and consider becoming an observer at the 
WTO Committee on Government Procurement. 
23. The representative of Canada  said that in 2007 bilateral trade in goods had amounted to 
Can$29.3 million.  Canada exported mechanical a nd electrical machinery and imported knitted or 
woven articles, spices, coffee and tea.  Canadian companies were operating in a number of sectors in 
Madagascar and closer links between Canadian an d Malagasy companies would be welcome.  The 
two countries were negotiating an agreement on the pr omotion and protection of foreign investment.  
Canada welcomed Madagascar's intention to acc ede to the Extractive Industries Transparency 
Initiative. 
24. The representative of Colombia  underlined the importance of encouraging good governance, 
an area in which progress had been made, as shown in  the Government's report.  Customs duties were 
high because Madagascar obtained most of its su pplies from abroad.  The high effective tariff 
protection was not conducive to investment and ha mpered the competitiveness of finished goods.  As 
was the case in the majority of countries that were  less developed, a large share of tax revenue came 
from taxes on international trade.  He urged the Malagasy authorities to u tilize the large amount of 
development aid given to Madagascar as effectively as possible. 
25. The representative of Japan  noted the supply-side constrai nts on export expansion, which 
made further trade-related technical assistance necessary.  Japan was providing such assistance 
through its "Development Initiative for Trade", which included supply-side support for production WT/TPR/M/197 
Page 8  
 
  and processing, the improvement of distribution facilities, and assistance in establishing marketing 
channels.  In addition, Madagascar was a participant in the fourth meeting of the Tokyo International 
Conference on African Development (TICAD), to be  held in May 2008.  Madagascar could improve 
the transparency of its taxation regime by expa nding the scope of tariff bindings and lowering the 
ceiling binding on "other duties and taxes".  Madag ascar was also urged to make its notifications to 
the WTO, in particular on TBT and SPS measures. 
26. The representative of Hong Kong, China
 noted that bilateral trade had grown by an annual 
average rate of 9.1 per cent between 2003 and 2007, and had further growth potential.  His delegation 
welcomed the measures taken to streamline and co mputerize customs procedures, which Madagascar 
was encouraged to pursue to facilita te trade.  His delegation also we lcomed the decline in the average 
applied tariff from 16 per cent in 2000 to 13 per cent in 2006, and the abolition of other taxes and 
charges on trade in 2005.  To improve the predicta bility of its tariff regime, Madagascar could expand 
the coverage of its bindings.  Madagascar was also  urged to meet its notif ication obligations, expand 
services commitments, and further liberalize t ourism and other travel-related services. 
27. The representative of the European Communities  emphasized the close involvement in 
carrying out the MAP and asked what were the broad outlines of the trade policy and regional 
integration policy adopted by the Malagasy Govern ment?  The low rate of agricultural productivity 
had to be improved and the informal sector integr ated, an issue about which the EC would like to 
know more concerning the authorities' plans.  The EC wondered what action was planned to respect 
the commitments undertaken with the EC in relation to good governance, as well as the main thrust of 
the Government's decentralization policy.  Mada gascar and the EC had close relations and the 
EC were still Madagascar's leading trade partner and principal investor.  An interim agreement had 
been initialed on 11 December 2007 in the context of the Economic Partnership Agreement (EPA), 
which would be concluded by the end of 2008.  With in the framework of the Tenth EDF, the EC and 
its member States were contributing €588.2 milli on to a programme for Madgascar.  The EC had 
three areas of concern, namely:  failure to observe  the principle of national treatment when applying 
excise duty on imported alcoholic beverages and tob acco products, the tariff structure, which did not 
encourage the competitiveness of certain processed goods ;  the absence of notifications to the WTO, 
particularly regarding the standardization regime, accreditation and certification procedures;  and the 
low level of competition.  The EC would theref ore like to know what measures were planned to 
improve competition, as well as the broad outline of the privatization programme. 
28. The representative of Zambia  noted the challenge to Madagasc ar of supply-side constraints 
and gaining access to markets.  Madagascar had a narrow export base, composed mainly of 
unprocessed products, and access to its principal export markets was secured under agreements 
outside the WTO.  This underlined the need for WTO Members to grant duty-free and quota-free 
access to LDCs, while addressing supply-side constrai nts through technical assistance and capacity-
building. 
29. The representative of Mauritius  drew attention to the strong ties between his country and 
Madagascar.  He welcomed the substantial economic progress made by Madagascar in recent years and the determination to maintain this trend.  Their two countries shared many challenges:  they were 
participants in the same regional integration in itiatives (IOC, SADC, COMESA, EPA with the EU);  
they were affected by the end of the Multi-Fibr e Arrangement, the erosion of preferences and the 
soaring prices of food and energy;  land, human an d natural resources were scarce in Mauritius, but 
more abundant in Madagascar;  and they were pur suing similarly profound economic reforms.  His 
Government considered that collective strategic thinking could transform their strong bilateral 
cooperation into an enduring part nership covering new areas that would further their economic 
integration, notably in the agro-industry and seafood sectors.  He called for the full support of Madagascar's development partne rs to underpin its reforms.  WT/TPR/M/197 
 Page 9 
 
 
  30. The representative of Burkina Faso  said that Madagascar was a pioneer in the Integrated 
Framework, the AGOA and the Millennium Challenge Account.  It was still a poor country and needed its partners' support in order to make its development a success. 
31. The representative of Mali
 emphasized that a sound trade po licy represented decisive leverage 
in achieving socio-economic development objectives.   Mali and Madagascar were involved in the 
economic integration process within the African Uni on, and also in the development of relations 
between the ACP countries and the EC, which could make trade a catalyst for development.  More 
trade aid would provide support. 
32. The representative of Nigeria  welcomed the central role given to the private sector in the 
MAP.  Basic infrastructure would help Madagascar to remain competitive.  To enhance its effective 
participation in the WTO, Nigeria hoped all developm ent partners would provide technical assistance. 
33. The representative of Lesotho  noted the importance of trade in Madagascar's recent economic 
performance, and urged developed country partne rs to provide duty-free and quota-free access for 
imports from LDCs, and to apply simple rules of or igin.  Trade in services should also be given 
priority. 
34. The representative of Tunisia  welcomed the Malagasy Governme nt's continued reform efforts 
despite the various problems facing the country such  as depreciation of its currency, difficulties in 
obtaining access to financing, transport-related problems and deterioration of the global economic 
climate.  Privatization, modernization of the financial sector and reform of the investment regime had enabled high rates of economic growth to be achieve d.  He hoped that Madaga scar would be given the 
assistance needed to bring its development effort s to a successful conclusion and combat poverty 
more effectively. 
35. The representative of Zimbabwe
 noted that Madagascar was also a member of the SADC and 
COMESA.  Madagascar's substantial progress on its re forms had led to high rates of growth.  Supply-
side constraints limited the expansion of its exte rnal trade, and Zimbabwe hoped that Madagascar 
would receive the assistance required to overc ome these and fulfil the goals in the MAP. 
36. The representative of the Democratic Republic of the Congo  pointed out that his country and 
Madagascar were both members of the COMESA an d SADC.  Aid for Trade was needed to support 
the goals in the MAP, but also to develop the basic infrastructure so that trade could become a catalyst 
for development. 
37. The representative of Senegal  congratulated Madagascar on the efforts made as an LDC in 
order to become more integrated in global trade.   The Malagasy Government was urged to make 
notifications, enhance the climate for competition, and pursue regional economic  integration with the 
ultimate goal being the African Union. 
38. The representative of Angola  paid tribute to the efforts made by Madagascar in the areas of 
good governance, combating corruption, developing the infrastructure, government procurement, 
securitization of investment, and improving financ ial management.  The good prospects for mining 
and petroleum exploitation would help  to consolidate economic growth. 
39. The representative of Tanzania  said that the regional integration efforts of Madagascar 
through the SADC and the IOC enhanced the prospect s of all countries in the region.  His delegation 
encouraged Madagascar to persist with its economic  reforms, which developm ent partners were urged 
to support. WT/TPR/M/197 
Page 10  
 
  40. The representative of Benin
 underscored the important role play ed by trade-related reforms in 
Madagascar's economic performance.  His delegatio n placed its hopes in the Aid for Trade initiative 
and urged all development pa rtners to support Madagascar.  WT/TPR/M/197 
 Page 11 
 
 
  V. REPLIES BY THE REPRESENTATIVE OF MADAGASCAR AND ADDITIONAL 
COMMENTS 
41. After expressing his thanks, the representative of Madagascar  replied to the questions raised 
by Members, grouped into five th emes and relating to the following main points:  the strategy for 
combating poverty;  the rights of women and child ren;  enhancing the business climate;  the new 
investment regime as of 2008;  access to loans for small companies;  measures intended to enhance 
the competitiveness of exports;  the AGOA;  tax and customs exemptions, excise duty and national 
treatment;  standardization, accreditation and certifi cation;  sanitary and phytosanitary measures;  
protection of intellectual property rights;  compe tition;  trade policy and practice in the areas of 
tourism, telecommunications, agriculture, fishing and government procurement;  technical assistance 
needs;  measures taken to boost rice production;  electricity supplies;  the problem of transport in 
relation to trade;  and the deficit in the trade balance. 
(1) ECONOMIC AND SOCIAL ENVIRONMENT  
42. The social protection objectives set out in the MDGs  had been integrated into the MAP.  After 
being endorsed in December 2007, the implementa tion of the National Social Protection Policy 
(PNPS) and the National Risk Management and Social Protection Strategy (SNGRPS) had 
commenced during the first quarter of 2008.  Action ha d been taken in relation to leadership, dialogue 
and training.  The resources given to various development programmes had been increased.  These 
actions had been assisting the implementation of th e struggle against hunger and the achievement of 
the MAP since January 2007.  In addition, the measures taken to improve the rights of women and children concerned the following:  ratification of th e relevant international conventions;  the adoption 
of their implementing texts, and the establishment of  infrastructure to underpin and apply policy on 
women's and children's rights;  the creation of an environment conducive to the survival and 
development of children, including access to medical services and education;  better access to medical services for women and the promotion of women's participation in economic and political activities. 
(2) T
RADE AND INVESTMENT REGIME  
43. Madagascar's trade policy focused on opening up and liberalization.  Among measures taken 
to enhance the business climate in order to attract investment, special mention should be made of the 
enactment of new laws on investment and free zones and enterprises in Madagascar (Laws Nos 2007-036 and 2007-037 of 14 January 2008);  the ratification of bilateral investment promotion 
and protection agreements;  facilitation of access to land ownership;  securitization of investment;  
intensive promotion of Madagascar as a destination by the EDBM;  the establishment of infrastructure 
conducive to investment (energy, industrial zones, land  ownership, etc.);  and the signature of regional 
and international agreements  to enhance investors' confidence and market access. 
44. Access to financing for SMEs had improved following the development of micro-finance 
institutions, the availability of funds to support SMEs  such as financing by the SME Solutions Center 
(IFC/World Bank), and the plan to create a develo pment bank for SMEs.  The Government would be 
submitting a new export promotion law to Parlia ment before June 2008 and the free zones and 
enterprises regime would be incorporated therein in order to harmonize it with the ordinary law 
regime.  Within the AGOA framework, in order to en sure the competitiveness of exports, the textiles 
subsector would be integrated, together with deve lopment of the cotton subsector, and a search was 
being made for investors to diversify the eligible sectors. 
(3) T
RADE POLICIES AND PRACTICES  
45. The main objective of the customs legislation was transparency when applying the customs 
tariff.  The customs published the criteria for gran ting all tariff concessions.  The exemptions were WT/TPR/M/197 
Page 12  
 
  classified into seven categories, one of which concerned "goods importe d free of duty on an 
exceptional basis following a decision taken by the Government Council".  The customs procedures 
and the implementation of reforms were the subject  of a publication.  The TRADENET was available 
in all the major customs offices and was intende d to facilitate customs operations through the 
exchange of data between ec onomic operators and the customs through the GasyNet and the 
ASYCUDA++.  The customs organized a monthly round  table with interested economic operators to 
discuss the application of customs legislation and th e results of the reforms.  Madagascar had adopted 
new measures with a view to a pplying the Customs Valuation Agreem ent correctly.  Regarding excise 
duty, since 2008 the duty on locally produced and im ported sugar and flour had been aligned and 
other products would gradually be brought into line  in order to abide by the WTO's national treatment 
principle. 
46. In the course of 2008, Madagascar intended to comply with the provisions of the 
WTO Agreement on Technical Barriers to Trade (TBT ) and to make the necessary notification.  The 
standards drawn up by the Madagascar Standard s Bureau were harmonize d with international 
standards.  There were still problems, however, at  the testing laboratory level, but it was planned to 
establish a national laboratory.  In the meantime, the choice of foreign laboratory was dictated by 
two main criteria, namely recognition by the principal exporting and importing countries and 
accreditation by an internationally-recognized body.  Madagascar also intended to comply with the 
provisions of the WTO Agreement on SPS Measures.  New officials had been appointed in the National Notifications Authority and the Enquiry Point.  Two notifications to the WTO had been made, one on a draft implementing decree for the Law on Livestock, and another on the draft Food 
Law drawn up by the National Codex Alimentarius Committee. 
47. Madagascar would not wait until the target date of 2013 given to LDCs to bring its legislation 
into conformity with the provisions of the TRI PS Agreement.  The draft revising the legislation 
currently in force, which took into account the comments and recommendations of the WIPO, would 
be finalized before the end of 2008.  It was pl anned to establish a national structure to combat 
counterfeiting and piracy in the near future.  The full application of the competition policy awaited the 
establishment of the Competition Council during 2 008.  The new government procurement regime 
governed all orders by public enterprises and Stat e-owned companies and the relevant texts were 
available on the site of the Government Pu rchasing Regulatory Authority (www.armp.mg). 
(4) A
NALYSIS OF TRADE POLICY AND PRACTICE BY SECTOR  
48. Energy :  A recovery plan to improve the perform ance of the State-owned company JIRAMA 
had been drawn up by the Government covering the period 2005-2009, and was accompanied by a 
short- and medium-term investme nt programme and a long-term production plan.  The long-term 
option chosen was preferential management of JI RAMA.  The electricity law governed independent 
energy producers (production, transport, distributio n and sales) and institutional reform (ADER, ORE, 
FNE) was under way. 
49. Transport :  Madagascar had undertaken to follow th rough with the reform in the maritime 
transport sector, including the management of the four major ports. 
50. Tourism :  In 2007, 25,000 people worked in this  sector and foreign and national service 
suppliers were treated in the same way.  Promoters were free to select their service suppliers according to their needs. 
51. Agriculture :  The sustainable green revolution envisaged in the MAP would allow modern 
production techniques to be used and thus lead to  a sharp increase in yields and production (a 
threefold increase in 2011), while at the same time prot ecting the environment.  In order to give effect 
to this revolution, it was planned that there s hould be a strong partnership among all interested  WT/TPR/M/197 
 Page 13 
 
 
  economic operators and their associations, suppliers  of services, inputs and agricultural equipment 
and machinery, research centres and analytical labor atories, micro-finance and loan institutions, and 
financial and technical partners.  The rice-growing area was estimated to be 1.2 million hectares in the 
2004-2005 season, with varying yields.  A large number  of varieties were grow n (except for Basmati), 
most of which were produced by the National Cent re for Applied Research for Rural Development 
(FOFIFA).  It was planned to increase the average yi eld at the national level to 3 tonnes/hectare.  It 
was also planned to start exporting rice within two years at an initial volume of 50,000 to 100,000 tonnes annually.  A special partnership be tween rice producers and the exporting company 
had to be put in place in order to increase annual exports. 
52. Fisheries :  Fishing for tuna took place in the Exclusive Economic Zone (EEZ) under bilateral 
agreements between Madagascar and the European Union (EU) and Japan, and fishing agreements 
with five foreign fisheries.  In order to ensure  sustainable and rational exploitation, the Fisheries 
Monitoring Centre, an agency belonging to the Ministry responsible for fishing but with financial autonomy, had been given the following tasks:  protection and conservation of fisheries and aquaculture resources;  control and monitoring of all traditional, small-scale and industrial fishing;  
control and monitoring of traditional, small-scale a nd industrial fishing activities and vessels fishing 
in Madagascar's waters, and control of the activit ies of economic operators in the fisheries and 
aquaculture sector.  As far as shrimp stocks were  concerned, the latest evaluation by the National 
Oceanographic Research Centre (CNR O) dated back to 1986, when the stocks had been estimated to 
be 8,000 tonnes/annually.  This threshold had been  reached in 1996 and as of 1998 it was decided to 
"freeze fishing".  In 2005 and 2006, the catch  had been lowered to 5,248 tonnes (2005) and 
5,442 tonnes (2006).  Prior to 2007, management of shrimp fishing had been linked to engine power 
but since 2008 it had depended on the length of the netsonde. 
(5) T
ECHNICAL ASSISTANCE  
53. Technical and financial assistance needs had b een identified in the following main areas:  
implementation of trade-related agreements;  prep aring notifications;  support for the creation of 
standardization laboratories;  capac ity-building in the area of trade negotiations and the formulation of 
trade policies that enhanced the benefits and decreased as far as possible the potential cost of 
implementing the agreements;  the creation of a financing structure for SMEs and SMIs;  facilitation of access to loans;  improving supply capacity;  a nd a campaign to promote high-quality products.  
Further technical and financial assistance, both through the Enhanced Integrated Framework and 
through Aid for Trade, would allow Madagascar to  comply with its international commitments and 
facilitate its gradual integration in to the multilateral trading system. 
54. After expressing his thanks, the discussant
 underscored the general appreciation of 
Madagascar's potential and the determination of its partners to improve their relations with 
Madagascar.  There was also considerable readines s to assist Madagascar's development efforts, 
particularly by increasing trade, creating joint vent ures and providing the technical assistance sought.  
Madagascar was also encouraged to  follow through with its reforms, whose benefits were evident.  
The fact that Madagascar was the first country to benefit from the Millennium Change Account was 
encouraging.  Madagascar had the political will to  pursue change, transparency and good governance. 
55. Specific questions had been posed to the Ma lagasy delegation and the replies given had 
enabled the progress made by the Government to be assessed.  Discussions had allowed an inventory 
of the obstacles and constraints hampering Madagascar 's development efforts to be drawn up.  In 
order to remove these, the Government was establishing a partnership among the government 
authorities, the private sector, civil society and de velopment partners.  The international community 
and the WTO had their role to play inasmuch as Ma dagascar's needs in rela tion to capacity-building 
and technical assistance had been identified. WT/TPR/M/197 
Page 14  
 
  56. The representative of the European Communities
 said that her dele gation would submit 
several additional questions in writing regarding ta xation and government procurement at the end of 
the meeting.  Her delegation wished to emphasize that all the reforms adopted by Madagascar should 
be part of the regional integr ation process and Madagascar was en couraged to contribute towards 
building up the COMESA and to continue implementi ng reforms in the field.  The EC welcomed the 
Malagasy Government's commitment to reach a full economic partnership agreement (EPA) by the 
end of 2008 in order to strengthen the framework fo r trade and economic relations with the EC.  The 
Malagasy authorities were urged to continue implem enting the essential structural reforms needed to 
enhance the country's production capacity and diversify its economic base so as to achieve 
Madagascar's significant potentia l in accordance with the MAP. 
57. The representative of Colombia  underlined his delegation's inte rest in the management of 
Madagascar's fisheries sector becau se Madagascar had the fourth larg est Exclusive Economic Zone in 
the world and had considerable economic potential.  The policy ap plied in this sector was also 
relevant to the current WTO negotiations on fishi ng subsidies, whose objective was to limit excess 
fishing capacity and over-fishing.  In these negotiati ons, the LDCs had been given specific provisions 
in the form of special and differential treatment, but  they were also concerned by over-fishing, which 
was harmful to fisheries resources.  In that cont ext, his delegation would like to know whether the 
bilateral agreements with Japan and the EC est ablished a link between catches and revenue.  It 
appeared to him that there was over-exploitation of shrimps and perhaps also of other species, as the 
discussant had intimated.  Madagascar was therefore not  in a position to develop the exploitation of its 
fisheries resources. 
58. The representative of the United States  noted with satisfaction that the Malagasy authorities 
intended to take greater advantage of the opportunities for exports to the United States under the AGOA and also to develop exports in sectors other than textiles and clothing.  Like Colombia, his 
delegation would like to obtain further information on the bilateral agreements on tuna fishing signed 
with the EC and Japan, as well as the assessment of the stocks undertaken for species other than 
shrimps, for example, tuna, an issue that was releva nt to the current negotiations on fishing subsidies. 
59. The discussant
 pointed out that he had not expressed any opinion on the state of Malagasy's 
fisheries resources in his opening statement but  had raised the question because Madagascar's 
maritime area was very extensive and difficult to control.  On the other hand, small-scale fishing 
exerted social pressure to avoid measures to conserve  stocks.  In order to de velop fishing, a balance 
had to be struck between nationa l social imperatives, the protecti on of natural resources and the 
commitments made by foreign partners. 
60. The representative of Madagascar  confirmed that fishing was an important source of revenue 
for his country and also had significant potential, but it appeared to have declined because of over 
exploitation.  As the discussant had pointed out, it was essential to find the right balance among the 
short, medium and long terms, ensuring that fisheries resources were protected and increased.  Fishing 
would therefore be closed for four months as of 2008 rather than for three months as previously.  The 
bilateral agreements covered payment per vessel.  Madagascar's policy was to manage its fisheries 
resources sustainably so that they could reproduce in the medium and long terms.  WT/TPR/M/197 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
61. This second Trade Policy Review of Madagascar had allowed us significantly to improve our 
understanding of its trade and relate d policies, and their evolution since its previous Review in 2001.  
Our discussions had greatly benefited from the partic ipation of Mr Razafimahefa, Minister of the 
Economy, Trade and Industry, and his delegation.  Our thanks were also due to our discussant, 
HE Mr Mohammed Loulichki, for his thoughtful and stimulating contribution, as well as to 
delegations for their comments. 
62. Members had commended Madagascar on its im pressive economic performance since 2002, 
with high real GDP growth rates and decreasing inflation.  They had expressed the hope that continuation of this economic performance would help to alleviate poverty.  A least-developed 
country, Madagascar had benefited from a large reduction of its multilateral debt, as well as 
substantial donor support.  It had liberalized trad e by lowering the simple average tariff, eliminating 
mandatory preshipment inspection and other import taxes, and customs procedures had been streamlined.  Madagascar's open skies policy had grea tly expanded the supply of air transport services 
and had helped to revitalize tourism.  Madagascar  participated in regional integration through its 
membership of the COMESA and SADC, enjoyed preferential access to the EC market under the 
EBA Initiative and the Cotonou Agreem ent, and to the markets of othe r trading partners, including the 
United States under the AGOA's LDC provisions.  Mada gascar was finalizing its negotiations on an 
Economic Partnership Agreement with the EC. 
63. Members had encouraged Madagascar to improve the transparency of its trade regime and 
related policies by making key notifications on, inter alia , customs valuation, licensing procedures, 
and on restrictions maintained on SPS grounds or b ecause of TBT.  They had urged Madagascar to 
comply with the national treatment principle with  respect to excise duty on tobacco products and 
alcoholic beverages, and fully to align its inte llectual property rights regime with the relevant 
WTO provisions.  The tax regime could be improved if ad hoc exemptions were limited.  Madagascar 
was encouraged to implement its new competition re gime fully and to become an observer at the 
WTO Committee on Government Procurement. 
64. Members had enquired about plans to restructur e the State-owned enterprise in the energy 
sector with a view to attracting investment by inde pendent producers.  Madagascar had been asked to 
clarify the state of its fisheries resources and the measures being taken to manage them on a sustainable basis.  Further information had been  sought on the investment regime, and on tourism 
services.  Other issues of interest to Members had included the regimes for business-related 
professional services and express postal services;  plans for expanding rice production and exports;  
and policies under consideration to sustai n exports and reduce the trade deficit. 
65. Members had appreciated the responses provided by the delegation of Madagascar, and 
looked forward to receiving written an swers to any outstanding questions. 
66. In conclusion, Members had commended Madagasc ar on its participation in the multilateral 
trading system.  They had congratulated it on its commitment to trade reform and encouraged it to 
take further steps to enhance the transparency and predictability of its trade regime, and to adhere 
more closely to WTO principles.  Members ha d urged Madagascar to improve its multilateral 
commitments on goods and services, notably by expa nding their scope to more non-agricultural goods 
and to telecommunications and maritime transpor t services, as well as by lowering bound rates.  
Members could help by keeping their markets ope n to products and services of interest to 
Madagascar, and by providing technical assistance. 
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