RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/198 
19 March 2008  
 
(08-1131) 
Trade Policy Review Body Original: English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
MAURITIUS 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Mauritius is attached. 
 
 
Note: This report is subject to restricted ci rculation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Mauritius. Mauritius WT/TPR/G/198 
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CONTENTS 
 
    Page 
 I. INTRODUCTION 5 
 
II. ECONOMIC OVERVIEW OF MAURITIUS 6 
 (1) S TRUCTURAL CHANGES IN THE MAURITIAN ECONOMY  6 
 (2) B ALANCE OF PAYMENTS  8 
 (3) S TRUCTURE OF IMPORTS AND EXPORTS  8 
 (4) M AIN CHALLENGES TO ECONOMIC GROWTH  9 
 (i) Inflation 9 
 (ii) Unemployment 9  (iii) Budget deficit 10 
 (iv) Trade deficit 10 
 (v) Depreciation of the Mauritian Rupee 10  (vi) Direct investment flows 11 
 (vii) Net international reserves 12 
 
III. THE ECONOMIC REFORM PROGRAMME 12 
 (1) C OMPONENTS OF THE REFORM PROGRAMME  13 
 (i) Fiscal consolidation and improved public sector efficiency 13  (ii) Improving trade competitiveness 14 
 (iii) Customs tariffs reform 14 
 (iv) Reform of excise duties 14  (v) The value added tax 15 
 (vi) Addressing the cost of services 16 
 (vii) Improving the investment climate 16  (viii) Democratizing the economy through participation, social inclusion 
  and sustainability 17 
 (ix) Reform in the labour market 17  (x) Diversifying the economic base 17 
 (xi) Cost of the Economic Reform Programme 18 
 
IV. LOCAL TRADE ENVIRONMENT 18 
 (1) T RADE LICENSING  18 
 (2) C OMPETITION  18 
 
V. TRADE FACILITA TION MEASURES 19 
 (1) N EW FACILITIES AT THE LEVEL OF THE MAURITIUS CUSTOMS  19 
 (2) T HE MAURITIUS CARGO COMMUNITY (MCCS)  PROJECT  20 
 
VI. PERFORMANCE OF MAIN SECTORS 20  (1) T
OURISM SERVICES  20 
 (2) I NFORMATION COMMUNICATION TECHNOLOGY SERVES  21 
 (3) F INANCIAL SERVICES  23 
 (4) T HE MANUFACTURING SECTOR  26 
 (5) T HE AGRICULTURAL SECTOR  27 WT/TPR/G/198 Trade Policy Review 
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    Page 
 
VII. IMPLEMENTATION OF URUGUAY ROUND AGREEMENTS, BILATERAL 
 AND REGIONAL COOPERATION 30 
 (1) C HALLENGES AND CONSTRAINTS IN IMPLEMENTING THE RESULTS  
  OF THE URUGUAY ROUND AGREEMENTS  30 
 (2) P ARTICIPATION IN THE DOHA DEVELOPMENT ROUND  30 
 (3) B ILATERAL RELATIONS  31 
 (4) R EGIONAL INTEGRATION  32 
 (i) Southern African Development Community (SADC) 32 
 (ii) Common Market for Eastern and Southern Africa (COMESA) 32 
 (iii) Economic Partnership Agreement (EPA) 33 
 (iv) Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) 34 
 
VIII. CONCLUSION  34 
 
TABLES 
 
 
II. ECONOMIC OVERVIEW OF MAURITIUS  
 
II.1 Percentage distribution of gross domestic product by industry group at current  basic prices, 2001-07 6  
II.2 Gross domestic product-sectoral real growth rates, for main sectors, 2001-07 7 II.3 Balance of payments 8  
II.4 Other economic indicators 10 
II.5 Exchange rate of the Rupee vis-à-vis  major currencies 11  
II.6 Foreign direct investment in Mauritius by sector, 2001-07 11 
II.7 Direct investment abro ad by sector, 2001-07 12  
II.8 Net international reserves, December 2001-November 2007 12 
 
 
 
 
 
   Mauritius WT/TPR/G/198 
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I. INTRODUCTION 
1. The period 2001-07 which is covered by the Third Trade Policy Review of Mauritius has 
been marked by intense international trade policy changes that had strong repercussions on the 
Mauritian economy.  It is during that period that Mauritius started experiencing the effects of the 
Uruguay Round Agreements with full intensity.  In fact, the termination of the Multi-Fibre 
Arrangement and the gradual phasing-out of the ag ricultural subsidies in Europe indirectly and 
severely affected the export interests of Mauritius in  textile and sugar.  The domination of the world 
market by products from low cost competitors also posed serious challenges to the competitiveness of 
Mauritian exports.  Moreover, trade preferences, wh ich have always played a critical role in the 
development of Mauritius, are being eroded due to continuous trade liberalization. 
2. Moreover, as a Net Food Importing Developing coun try, Mauritius has been affected by the 
price surge in basic food commodities which led to deterioration in our balance of trade.  This 
situation has put strains on our food sourcing capacity and has also constrained policy options. 
3. These trade developments had profound impacts on the socio-economic structure of 
Mauritius, and required painful adjustments.  Despite these economic problems, Mauritius has 
refrained from the temptation of policy reversals and has maintained a high degree of openness.  
Consistent with its effort to remain fully inte grated within the world economy, Mauritius has been 
very pro-active both on the national and international fronts.  As from the year 2005 it has invested in an ambitious economic reform programme which aims at moving Mauritius away from preference 
dependence to global competitiveness.  The key elements of this economic reform include 
modernisation of the traditional sectors, economic diversification, bolstering of the emerging areas 
sectors moving towards a services-oriented economy. 
4. However, Mauritius is of the view that support from the international community is critically 
important for its economic reform programme to be sustainable. That is why Mauritius has been fully 
engaged in international trade negotiations and economic diplomacy.  At the WTO, Mauritius has 
always canvassed the idea that th e “one-size-fits-all approach” w ill penalize the small, weak and 
vulnerable economies with the risk of marginalizat ion.  In this respect, it has advocated a trade 
solution with a view to mitigating the problems of  preference-dependent countries.  Mauritius has also 
deployed considerable efforts in the advancem ent of the WTO Work Programme on Small Economies 
and the Aid for Trade initiative. 
5. At the same time, Mauritius multiplied its effort s towards market diversification.  While 
consolidating its trade and economic relations with  its traditional partners through the conclusion of 
the Economic Partnership Agreement with the EU and the Trade and Investment Framework 
Agreement with the US, Mauritius has taken the in itiative to enlarge its horizon to other trading 
nations and explore the avenues of South-South trade.  It has embarked on trade and economic 
cooperation negotiations with India and Pakistan and has started bila teral trade dialogue with other 
countries like China, Brazil and Russia. 
6. It has to be underlined that throughout the process of trade policy formulation and trade 
negotiations, Mauritius has continued with its trad ition of a participatory approach whereby all 
national stakeholders are taken on board.  There exists not only a structured dialogue between the 
government and private sector, but the latter is also fully involved in trade ne gotiations at multilateral, 
regional and bilateral levels. WT/TPR/G/198 Trade Policy Review 
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II. ECONOMIC OVERVIEW OF MAURITIUS 
(1) STRUCTURAL CHANGES IN THE MAURITIAN ECONOMY  
7. The current economic set up of Mauritius is char acterised by structural  changes as evidenced 
by a lower contribution of the traditional sector s, namely sugar and textile to GDP and a 
corresponding larger contribution of the tertiary sector, which includes the services industries.  The 
relatively lower contribution of the sugar sector, comprising both sugar cane and sugar manufacturing, 
from 5.2% in 2001 to 3.1% in 2007, and of the textiles and clothing sector from 10.3% in 2002 to 
6.8% in 2007 were mostly due to  the emergence of faster growi ng economic sectors such as hotels 
and restaurants, financial intermediation and real estate, renting and business activities. This is shown 
in Table II.1 below.   
Table II.1 
Percentage distribution of gross domestic product by indus try group at current basic prices (main sectors), 2001-07 
   
2001 2002 2003 20041 20051 20061 20072 
Agriculture, hunting, forestry and fishing 7.3 6.3 6.4 6.5 6.0 5.5 4.8 
Sugarcane 4.0 3.1 3.3 3.5 3.2 2.8 2.3 
Other 3.4 3.2 3.1 3.0 2.8 2.7 2.5 
Manufacturing 23.3 22.4 21.5 21.0 19.8 20.1 19.8 
Sugar 1..2 1.0 1.0 1.1 1.0 0.9 0.7 
Food excluding sugar - 4.2 4.7 4.8 5.1 5.6 5.6 
Textiles and Clothing - 10. 3 9.0 8.1 6. 7 6.6 6.8 
Other - 6.9 6.8 7.0 7.0 7.0 6.7 
Construction 5.5 5.7 6.0 5.8 5.6 5.6 6.4 
Hotels and restaurants 7.4 7.1 6.9 7.4 7.7 8.5 9.2 
Transport , storage and communications 12.9 13.5 13.4 12.9 12.6 12.1 11.9 
Financial intermediation 8.8 9.1 10.0 9.8 10.3 10.4 10.6 
Insurance 2.4 2.6 2.7 2.8 2.9 2.8 2.8 
Banks  5.5 5.7 6.3 5.9 6.2 6.4 6.5 
Other 0.9 1.0 1.0 1.1 1.2 1.2 1.3 
Real estate, renting and business activities 9.0 9.3 9.5 9.7 10.2 10.5 11.0 
1. Revised. 
2. Forecast. 
Source:  Central Statistic Office. 
 
8. The textiles sector in particular witnessed negative sectoral growth rates over the 2003-05 
period, including a record 14.7% drop in 2005 (as demonstrated in Table II.2).  This can be mainly attributed to the impact of the dismantling of  the Multi Fibre Arrangement.  Though modest positive 
growth was recorded in the subsequent y ears, the sector is yet to recover fully. 
9. The economy now seem to be driven by the se rvices sectors, especially activities in "Hotels 
and Restaurants", "Transport storage and communi cations", "Real estate, renting and business 
activities" and "Financial intermediation". 
10. As shown in table 1, the contribution of the hotels and restaurant sector to GDP increased 
from 7.4% in 2001 to 9.2% in 2007.  The sectoral real  growth rate was quite moderate over the period 
2001-06, with a maximum of 5.6% in 2005.  Howeve r, the Central Statistics Office has estimated the Mauritius WT/TPR/G/198 
 Page 7 
 
 
expansion of the hotel and restaurants sector at 13. 1% in 2007 after a modest growth of 3.5% in 2006.  
This has been based on a record tourist a rrivals estimated at 900,000 for year 2007. 
11. The financial intermediation sector’s contribution to GDP increased from 8.8% in 2001 to 
10.6% in 2007 (Table II.1).  The contribution of  this sector to GDP has revolved around 10% since 
the year 2005.  It has been estimated that the sector grew by 7.3% on 2 007 following growths of 
5.1%, 7.6% and 11.1% in insurance, banks and ot her financial intermediation activities respectively 
(Table 2). 
Table II.2 
Gross domestic product-sectoral re al growth rates (% over previous year), for main sectors, 2001-07 
  2001 2002 2003 20041 20051 20061 20072 
Agriculture, hunting, forestry and fishing +7.0 -16.3 +1.9 +8.1 -5.4 +0.6 -6.8 
Sugarcane +9.9 -25.0 +3.7 +10.6 -9.2 -2.9 -12.8 
Other +4.0 -6.1 +0.1 +5.4 -1.1 +4.5 -0.7 
Manufacturing +4.4 -2.4 0.0 +0.6 -5.5 +4.0 +3.5 
Sugar +9.9 -25.0 +3.7 +10.6 -9.2 -2.9 -12.8 
Food excluding sugar - - +17.5 +4.4 +2.1 +9.6 +4 
Textiles and clothing - - -6.9 -7.2 -14.7 +2.9 10.1 
Other - - -0.7 +6.6 +0.4 +1.8 -1.2 
Construction +5.2 +6.3 +10.2 +0.5 -4.4 +5.2 +15 
Hotels and restaurants +1.2 +3.1 +3.0 +2.4 +5.6 +3.5 +13.1 
Transport , storage and communications +9.1 +7.7 +6.6 +8.1 +7.7 +7.4 +7.7 
Financial intermediation -8.5 +5.8 +11.7 +4.3 +5.4 +7.0 +7.3 
Insurance +5.0 +5.0 +5.0 +5.0 +5.0 +5.0 +5.1 
Banks  -15.0 +3.6 +14.2 +2.0 +4.8 +7.1 +7.6 
Other +5.4 +22.6 +15.2 +15.9 +9.5 +11.0 +11.1 
Real estate, renting and business activities +7.7 +5.9 +6.6 +6.7 +6.5 +6.3 +7.5 
Gross Domestic product at market prices +2.6 +1.9 +4.3 +5.8 +1.2 +3.9 +5.6 
Manufacturing industries previously 
operating with an EPZ certificate +4.4 -6.0 -6.0 -6.8 -12.3 +4.6 +8.0 
1. Revised. 
2. Forecast. 
Source: Central Statistic Office.  
12. It is worth noting that for the year 2007, a good performance was noted in some secondary 
sectors, namely manufacturing and construction respectively.  The GDP Sectoral real growth rate of the manufacturing sector had been seriously affected  by the low performance of the textile sector 
since the end of the Multi-Fibre Arrangement.  Ho wever, there has been an improvement since the 
year 2006.  For the year 2007, it is expected that the manufacturing sector will grow by 3.5% after a 
growth of 4 % in 2006 namely on account of respectiv e growth rates of 10.1% and 4% in the textile 
and food processing industries (Table 2). 
13. The Construction sector contributed 5.5% to GDP  in 2001 as compared to an estimated figure 
of 6.4% for the year 2007 (Table II.1).  It should be  noted that the GDP sectoral real growth rate of 
the construction sector surged from 5.2% in 2006 to 15% in 2007, mainly due to the construction of WT/TPR/G/198 Trade Policy Review 
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projects under the Integrated Resort Scheme [now part of the Investment Promotion (Real Estate 
Development Scheme) Regulations 2007.1 
(2) BALANCE OF PAYMENTS  
14. After having registered four successive years of surpluses since 2000, the current account of 
the balance of payments turned around in 2004-05 to post a deficit of Rs6,321 million and an even 
larger deficit of Rs10,187 million in  2005-06, mostly due to the faster growth of imports relative to 
exports.  For the fiscal year 2006-07, the deficit on the current account deteriorated further to reach 
Rs17,469 million, largely on account of a marked wor sening of the deficit in the merchandise account 
following the purchase of two aircrafts.     
15. From a surplus of Rs3,225 million in 2003-04, the overall balance of payments, measured as 
the change in reserve assets excluding valuation cha nges, registered a deficit of Rs3,133 million and 
Rs3,019 million in 2004-05 and 2005- 06, respectively.  The country’s external position witnessed an 
improvement in 2006-07, as the overall balance of pa yments recorded a surplus of Rs6,603 million.  
Table II.3 
Balance of payments 
(fiscal year) 
      Rs million 
 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 
Current account Balance +4,257 +7,458 +3,554 +1,383 -6,321  -10,187  -17,469  
GDP market prices 124,825 137,289 149,577 165,440 181,025 195,441 216,556 
Current Account Balance as a % of GDP 3.4 5.4 2.4 0.8 3.5 5.2 8.1 
Overall Balance of Payments  +5,107 +5,908 +9,099 +3,225 -3,133 -3,019 +6,603 
Source: Bank of Mauritius Monthly Statistical Bu lletin and Central Statistics Office. 
(3) STRUCTURE OF IMPORTS AND EXPORTS  
16. Total exports of goods and services increased from Rs 90.5 bn in 2001 to Rs 140.6 bn in 
2007, whereas total imports of goods and services in creased from Rs 82.6bn in 2001 to Rs 159.0 bn in 
2007. 
17. Exports have traditionally targeted mainly th e US and EU markets, accounting for 20.3% and 
67% of exports in 2001. However, the recent years ha ve demonstrated a diversification for our target 
markets. A good progression was noted on the South African and Asian markets. The percentage of 
exports to South Africa increased from 0.8% in 2001 to  2.2% in 2006 as a result of trade liberalisation 
                                                      
1 The IRS was first enacted in August 2002 under the Investment Promotion (Integrated Resort 
Scheme) Regulations 2002. The Investment Promotion Act was subsequently amended in 2007. As of date, the 
Investment Promotion (Real Estate Development Scheme) Regulations 2007 comprises two schemes: the 
Integrated Resort Scheme (IRS) for large landowners (more than 10 hectares) and the Real Estates Scheme 
(RES) for small landowners (at least 1 arpent but less than 10 hectares).  Both the IRS and the RES are targeted at non-citizens.  However, the IRS invo lves the construction and sale of luxury residential units to foreigners 
and technical specifications stat e that it should be on freehold land of more  than 10 hectares to be sold at a price 
exceeding USD 500,000.  The RES allows small landowner s to develop and sell residential property to non-
citizens.  The RES should be built on freehold land of not more than 10 hectares. Mauritius WT/TPR/G/198 
 Page 9 
 
 
in the context of the SADC Trade Protocol. Exports to the Asian countries increased from 1.6% in 
2001 to 16.7% in 2006.  
18. During the same period exports to the US declined from 21% in 2001 to 8.3% in 2006.  
Decline in exports to Europe was comparatively marginal, decreasing from 67% to 61.7%. The loss of 
market share on the US market was mainly due to  the fact that unlike other textiles and apparel 
exporters under AGOA Mauritius did not benefit from the third country fabric provision and had 
therefore to source its yarn or fabrics either from the US or from the region. 
19. The structure of exports had also been charact erized by structural changes. The export of 
prepared and preserved fish increased from 4% of  total exports in 2001 to 10.3% in 2006 as well as 
frozen fish for which there were no exports in 200 1 but made up 2.9% of total exports in 2006.  
20. A number of new sectors also performed well.  Exports of machinery and transport equipment 
increased from 1.7% in 2001 to 17.5% in 2006. Mo reover, the exports of office machinery and 
telecommunications equipment also witnessed an up ward trend. The increase was mainly fuelled by 
the rise in the exports of telecommunications a nd sound recording and reproducing apparatus and 
equipment, where exports were non-existent in 2001 subsequently made up 12.3% of total exports in 
2006.  The change in the structure of exports demonstrates the changing nature of the Mauritian 
economy characterised by diversification from traditional sectors into new sectors, like fish products and high-tech products. 
21. As far as imports are concerned, Europe and Asia have consolidated their positions as our 
main sourcing partners. As a share of total im port, imports from Europe increased from 31% in 2001 
to 36.2% in 2006.  Imports from Asia also show ed a progression from 40% to 45.6% whilst imports 
from the Middle East showed a satisfactory progression, from 6.2% to 8.4%. 
(4) M
AIN CHALLENGES TO ECONOMIC GROWTH  
(i) Inflation  
22. Inflation, which is measured by the percentage change in the yearly average Consumer Price 
Index (CPI) in Mauritius, rose from 5.1% in 2005- 06 to a double-digit figure of 10.7% in 2006-07. 
The important increase in the inflation rate is to a large extent attributable to budgetary measures, the 
pass-through of the exchange rate depreciation to dom estic prices, the increase in freight rates and 
adverse climatic conditions in certain exporting count ries leading to a hike in prices of some imported 
commodities. 
23. After surging to 10.7% during the 12 month pe riod ending June 2007, the inflation rate has 
assumed a declining trend and stood at 8.8% in Dece mber 2007. It is forecast that, barring any major 
economic shocks to the economy, the rate of infla tion would subside to around 8.0% in fiscal year 
2007-08. In the medium term, the objective of the Bank of Mauritius is to narrow the inflation differential between Mauritius a nd its major trading partners.  
(ii) Unemployment 
24. Official statistics indicate that the unemploymen t rate for the first quarter of the year 2007 
reached 9.6%.  As shown in table 4 below, the unemp loyment rate has averaged  9% for the past three 
years. The manufacturing sector seems to have been  the most severely affected as it witnessed some 
17,500 job losses for the period 2001-07. The agricu ltural sector has also to some extent been 
affected, pending major reforms to be undertaken by the sugar industry. WT/TPR/G/198 Trade Policy Review 
Page 10 
 
 
25. The labour market situation emphasises the fact th at it takes time to tackle job mismatch and 
other structural inefficiencies. As such, a prompt  implementation of measures aimed at improving the 
adaptability of the workforce to changing de mand conditions – including human resource 
development and an overhaul of labour legislation – is highly warranted. 
(iii) Budget deficit 
26. In view of the budgetary reforms, the ratio of the budget deficit to GDP declined by 1% 
between 2006 and 2007 as evidenced by Table 4 below. Ac cordingly, public sector debt is expected to 
maintain a downward trend and r each more sustainable levels. 
Table II.4  
Other economic indicators  
 2001 2002 2003 2004 2005 2006 2007 
Rate of inflation % Calendar y ear 5.4 6.4 3.9 4.7 4.9 8.9 N/A 
Rate of inflation % 
Fiscal year 4.4 6.3 5.1 3.9 5.6 5.1 10.7 
Unemployment Rate Mid year % 6.8 7.2 7.7 8.4 9.6 9.1 9.2 
Government Recurrent Revenue Rs million, Fiscal year 24,149 24,606 29,487 32,404 35, 074 38,183 41,335 
Government Recurrent Expenditure Rs million,  Fiscal year 31,398 29, 577 33,529 36,879 40, 564 45,237 48,215 
Ratio of Budget deficit to GDP at market prices -6.7 -6.1 -6.2 -5.4 -5 -5.3 -4.3 
Source: Bank of Mauritius.  
(iv) Trade deficit  
27. Since 2001-02, the country has been experiencing worsening year on year trade deficit.  The 
trade deficit (excluding purchases of aircrafts a nd marine vessels) which stood at Rs8,638 million in 
2001-02 has deteriorated to reach Rs38,323 million in 2006-07, reflecting the relatively faster growth 
in value of imports compared to exports.  In the wake of surging oil prices on the world market, the 
import bill for petroleum products has witnessed a mo re than three fold increase between 2001-02 and 
2006-07.    
28. With imports prices (+56.1%) increasing strongly compared to export prices (+39.0%) 
between 2001-02 and 2006-07, the terms of trade in dex (base year 2003 = 100), defined as the ratio of 
the export price index to the import price index, in Mauritius decreased by 10 percentage points from 
93 to 83. 
(v) Depreciation of the Mauritian Rupee 
29. Over the period 2001-07, the rupee, on average, has depreciated against all major currencies.  
On a point-to-point basis, the rupee, between 2001 and 2007, recorded the highest depreciation 
against the New Zealand dollar (47.8%), followed by  the Australian dollar (43.5%), euro (40.1%), 
Swiss franc (34.9%) and Pound sterling (34.1%).  The Mauritian Rupee registered 8.3% depreciation 
against the U.S. dollar between 2001 and 2007. Mauritius WT/TPR/G/198 
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Table II.5 
Exchange rate of the Rupee vis-à-vis  major currencies 
(period average) 
Indicative Selling Rates 2001 2002 2003 2004 2005 2006 2007 
Australian dollar 15.186 16.4858 18.6967 20.5989 22.7408 24.1339 26.8831 
Hong Kong dollar 3.7904 3.9017 3.6989 3.6254 3.8661 4.1456 4.128 
Indian rupee (100) 62.939 63.3347 62.504 62.8425 68.6707 71.3506 78.2158 
Japanese yen (100) 24.1479 24.199 24.711 25.8964 27.0826 27.5816 27.3625 
Kenya shilling (100) 37.7979 38.9254 38.2962 36.0465 40.2517 45.1096 48.2507 
New Zealand dollar 12.3071 14.1438 16.7587 18.7105 21.1115 20.8183 23.5697 
Singapore dollar 16.5042 17.0269 16.5752 16.7193 18.0565 20.2224 21.4372 
South African rand 3.486 2.9296 3.8611 4.4475 4.7688 4.8433 4.6283 
Swiss franc 17.353 19.4505 21.2078 22.5163 23.8856 25.4604 26.6644 
US dollar 29.2627 30.1482 28.5549 27.959 29.7457 31.7212 31.9133 
Pound sterling 42.1365 45.3325 46.6188 51.2678 54.0962 58.9711 63.9774 
Euro 26.1961 28.5276 32.2748 34.7338 36.9957 40.3405 43.762 
Source: Bank of Mauritius. 
(vi) Direct investment flows 
30. Since 2006, there have been substantial forei gn direct investment (F DI) inflows directed 
mainly to the tourism and banking sectors. FDI in the tourism sector took place in the hotel industry 
and gathered momentum lately unde r the Integrated Resort Scheme2 which is now part of the 
Investment Promotion (Real Estate Development Scheme) Regulations 2007.  As demonstrated in 
Table 6 below, FDI in the tourism sector surged fr om a mere Rs 100 million in 2002 to Rs 4.6 bn in 
2007.  Within the banking sector, new banks became operational while there was also a rise in the 
share capital of certain foreign-owned banks.  
Table II.6 
Foreign direct investment in  Mauritius by sector, 2001-07  
     Rs million   
 2001 2002 2003 2004 2005 2006 20071 2 
Export Processing Zone 3 41 77 248 106 90 71 
Tourism - 100 103 121 536 2,610 4,610 
Banking 600 316 1,301 310 454 3,511 2,246 
Telecommunications - - - 38 175 43 16 
Other 333 522 485 1,079 1,536 968 2,058 
Total 936 979 1,966 1,796 2,807 7,222 9,001 
1 Provisional. 
2 January to September. 
Source:  Bank of Mauritius Monthl y Statistical Bulletin. 
31. As demonstrated in Table II.7, FDI outflows we re mainly directed towards the manufacturing, 
tourism and agricultural sectors. Mauritian investors have delocalised some of their textile production 
units to lower cost countries in the region. FDI from Mauritius has been subs tantial in the tourism 
                                                      
2 As explained in the first section (footnote 1), the IRS Scheme was first enacted in 2002. The first IRS 
Certificates were issued in 2005. WT/TPR/G/198 Trade Policy Review 
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sector in the Seychelles and Maldives. Local suga r companies have also carried out substantial 
investment in the agricultural sector in main land Africa, namely in Mozambique, Tanzania and 
Uganda. 
Table II.7 
direct investment abroad by sector, 2001-07  
     Rs million   
 2001 2002 2003 2004 2005 2006 20071 2 
Tourism - - 137 422 967 391 528 
Banking 47 - 440 - - - - 
Manufacturing - 245 41 101 258 335 118 
Other 36 33 538 447 717 408 234 
Total 83 278 1,156 970 1,942 1,134 880 
1 Provisional. 
2 January to September. 
Source:  Bank of Mauritius Monthl y Statistical Bulletin. 
(vii) Net international reserves 
32. As demonstrated in table 8 the net international reserves of the country3, increased to 
Rs74,192 million as at end-December 2006 comp ared with Rs35,764 million as at end-
December 2001.  The end-November 2007 level of net international reserves of the country, based on 
the value of the import bill for fiscal year 2006-07, (exclusive of the purchase of aircrafts) represented 41.2 weeks of imports. 
Table II.8 
Net international reserves , December 2001-November 2007 
 Bank of Mauritius 
Net Foreign Assets Banks Net Foreign 
Assets2 Others 1 Net International 
Reserves Import Coverage 
(No. of weeks) 
 (Rs million)  
Dec-01 25,220 9,992 553 35,764 33.0 
Dec-02 35,617 7,850 575 44,041 35.8 
Dec-03 40,805 7,248 849 48,902 39.2 
Dec-04 44,948 6,917 690 52,824 36.1 
Dec-05 41,117 14,664 768 56,549 31.6 
Dec-06 44,127 29,522 543 74,192 35.5 
Nov-07 51,988 35,721 333 88,042 41.2 
1 Comprises Foreign Assets of the Government and the country's Reserve Position in the IMF. 
2 With effect from June 2005, comprises the Net Foreign Assets of banks, adjusted for transac tions of Global Business Licence 
 Holders. 
Source: Bank of Mauritius.  
III. THE ECONOMIC REFORM PROGRAMME 
33. Mauritius is currently implementing an ambiti ous reform programme aimed at moving away 
the economy from dependence on trade prefer ences to global competitiveness.   
34. Moreover, it is doing so in a difficult envi ronment because of trade shocks caused by the 
erosion of trade preferences in sugar and textiles and the rise in oil prices.  
                                                      
 3 The net international reserves are made up of th e net foreign assets of the banking system, the 
country’s reserve position with the IM F, and Government’s foreign assets. 
 Mauritius WT/TPR/G/198 
 Page 13 
 
 
 
35. The reform programme is aimed at putting the economy onto a higher growth path and 
therefore making it less vulnerable to external shocks. The reform programme is particularly aimed at achieving the following:  
(i) Reduction in the budget deficit and the debt burden in order to bring them to more   
 sustainable levels;  (ii) Improving productivity in the traditional sectors of the economy with a view to   restoring their competitiveness and facilitating the development of exports;  (iii) Improving the institutional framework fo r business by streamlining procedures for  
 business registration and incentives schemes in order to attract more foreign direct 
 investments, and  (iv) Facilitating employment creation and promoting social equity. 
 
(1) C
OMPONENTS OF THE REFORM PROGRAMME  
36. With a view to achieving the above key objectiv es, the programme is articulated around the 
following four main pillars:  
(i) Consolidating fiscal performance and improving public sector efficiency;  
(ii) enhancing trade competitiveness;  (iii) improving the investment climate and;  (iv) democratising the economy through participa tion, social inclusion and sustainability.  
 
37. The reforms which have started with th e 2005/2006 budget encompassed inter-alia:  
• The reduction of tax expenditures ( exemp tions and exonerations) by 0.5% of GDP; 
• the adoption of a legislation to abolish mini sterial discretion over tax and duty exemptions; 
• measures to strengthen tax administration; 
• the revision of the corporate tax rate; 
• the unification of investment incentive regimes; 
• the deepening of financial services, meas ures to reduce time to start business; 
• ease restrictions on work and residency permits and expand support to SMEs; 
• the preparation of a master plan for poverty reduction; and 
• the implementation of training and re-employment programmes. 
 
(i) Fiscal Consolidation and Improved Public Sector Efficiency 
38. Fiscal consolidation is also at the core of the reform programme and intends to curb deficits 
and debt on a downward path by the following measures:  
(i) Limiting government borrowing to the financing of the capital budget; and 
(ii) reducing the ratio of net public debt to GDP. 
 
39. The Government intends to achieve the above results through the Medium-Term Expenditure 
Framework (MTEF).  MTEF will underpin this cons olidation anchoring annu al budgets within an 
aggregate multi-year framework and enabling the Gove rnment to set priorities and resolve budgetary 
trade-offs. At the same  time, there is a lot of emphasis on improving revenue collection through, 
namely, the recent setting up of the Mauritius Revenue  Authority; a reduction in tax expenditures and 
less discretionary ministerial powers to remit taxes and duties. At the same time, modifications to the 
structure of direct taxes has streamlined incentives and increase equity. The expectation is that the WT/TPR/G/198 Trade Policy Review 
Page 14 
 
 
new tax structure will better reward effort, innova tion and entrepreneurship, increase transparency, 
and encourage investment and job creation, especia lly by small and medium enterprises (SMEs). On 
the expenditure side, policy measures focus on elim inating waste and increasing efficiency. More 
careful monitoring of capital projects is intended to  improve the quality of public investments and 
discourage unjustified cost overruns.  Closer scru tiny of recurrent expenditures will reduce waste and 
improve efficiency. 
(ii) Improving trade competitiveness 
40. The centrepiece of the effort to improve trade competitiveness is an overhaul of the incentive 
framework to reduce distortions and biases. A thre e-year programme (2006-09) to liberalize tariffs 
and turn Mauritius into a duty-free island will level the playing field between those producing for the 
domestic and export markets. The tariff liberaliza tion programme is aimed at achieving a low and 
uniform level of protection for the manufacturing sector while preparing Mauritius to become a ‘duty 
free island’. 
(iii) Customs tariffs reform 
41. At the time of the last Trade Policy Review a 10% additional duty was valid for goods 
attracting 55% duty when imported from "non-sch eduled countries".  In April 2005, the 10% 
additional duty was removed.  Thus customs tariffs  became fully compliant with the Most Favoured 
Nation Rule of the WTO. 
42. Customs Tariff reforms started with the 2005 Budg et.  In the 2005 Budget, the top tariff rate 
was lowered from 80% to 65% and tariffs were elim inated on a large number of products.  However, 
as from the 2006 Budget, the tariff structure was ove rhauled and tariff liberalization was accelerated 
with a view to moving towards a Duty Free Isla nd. The 2006 tariff reform led to the following 
changes: 
• The maximum ad valorem tariff was brought down from 65% to 30%; 
• the rates of 65%, 55% and 40% was lowered to 30%; 
• the tariff structure has been simplified w ith only 3 non-zero bands (10,15 and 30 %) as 
compared to 7; 
• 79 % of all our tariff lines have become duty-free i.e attracting zero duty; and 
• the simple average tariff rate has been brought down from 9.5 to 6.6 %. 
(iv) Reform of excise duties 
43. Since the last Trade Policy Review of Mauritius,  numerous changes have been brought to the 
excise duties, especially to achieve compliance with the Most Favoured Nation Principle and the 
National Treatment Principle of the WTO. 
Motor cars 
 
44. A 60 % duty surcharge was previously levied  on motor cars imported from non-scheduled 
territories.  This additional duty surcharge was a bolished as from 12 June 2001.  The same rate of 
excise duty now applies on motor cars irrespective of  its origin.  The same rate applies to domestic 
manufacture of cars or imported ones.   Mauritius WT/TPR/G/198 
 Page 15 
 
 
Cigarettes 
 
45. Imported cigarettes and locally-ma nufactured ones were subject to different rates of excise 
duty.  A new structure was put in place in July 200 5, whereby the same rate of excise duty is now 
applicable to both.  The rates are specific and ar e based on classification by Tobacco Board in four 
categories.  The rates vary from Rs 1,770 to Rs 2,370 per thousand cigarettes. 
Alcoholic products 
 
46. In June 2006, the excise duties on alcoholic pro ducts were reformed.  The main objectives of 
the reform were to encourage value addition and expo rt in the sector, move towards international best 
practices and make the excise taxation system WTO-compliant.  The following principles were adopted in reforming the excise taxation: 
• Rationalisation and simplification of categorization  of alcoholic products; 
• removal of existing tax biases against producti on of quality products from molasses and cane 
juice; 
• phasing out of the duty differential between  bulk importation and importation of bottled 
spirits; 
• spirits would be taxed on an Absolute Alcohol Content basis so that the higher the alcoholic 
content, the higher the duty amount; and 
• application of the same rate of dut y on local production and on imports. 
(v) The value added tax 
47. A 10% VAT was introduced as from 7 September 1998 in replacement of the 8% sales tax.  
The rate was subsequently increased from 10% to 12% in July 2001 and from 12% to 15% in 
July 2002. It is currently applied on all supplies ma de by a taxable person in the course of furtherance 
of any business, unless specifically exempted or zero-rated by law. Main exempted
4 goods and 
services include:- basic foodstuffs (rice, flour, butt er, milk, cheese, infant food), health (medical, 
hospital and dental services, pharmaceutical product s and antibiotics) and others such as public 
transport, educational and training services, journals, herbicides etc.  Main zero-rated5 supplies 
include wheat flour, edible oil, margarine, ghee,  milk, yogurt, poultry, electricity, water etc. 
48. In the 2006 Budget, the annual turnover th reshold above which VAT registration is 
compulsory was lowered from Rs 3 million to Rs 2 million. However, professionals such as 
accountants, auditors, advertising agents, advisers, c onsultants, notaries among others are required to 
register irrespective of their turnover.  The turnover threshold for submission of VAT returns on a quarterly basis was set at Rs 10 million instead of Rs 12 million. However, flexibility is given to a 
taxpayer with a turnover below that amount to choo se to submit his return every month. VAT which 
has been paid on capital goods is refunded by the MR A if the amount involved is at least Rs 100,000 
against Rs 150,000 two years back. 
 
                                                     
 
4 For exempted goods VAT is not charged on output, However VAT paid on inputs cannot be 
reclaimed as credit/refund.  Thus, the VAT will be borne by the manufacturer. 
5 Zero rating refers to a situation in which the rate of  tax applied to sales is ze ro, though credit/refund is 
still given to VAT paid on inputs. In this case, the firm will be granted full credit/ref und of VAT paid on inputs. 
Exports, which are zero-rated, mean that expo rts leave the country free of any domestic VAT. WT/TPR/G/198 Trade Policy Review 
Page 16 
 
 
49. With the consolidation of investment certifi cate regimes and the integration of the EPZ sector 
and non-EPZ sectors, amendments were brought to th e Value Added Tax Act by way of the Finance 
Act 2006.  The special VAT regime for EPZ was abolished on 1 October 2006.   
50. It indirectly favoured imported inputs over local ones and worked against development of 
inter-linkages in the economy. As a counterpart, a fast-track VAT refund system was put in place at 
the MRA. Additionally, with a view to easing the transition and limiting impact on cash-flows, a 
number of industrial inputs that were subject to VAT  were made either exempt or zero-rated. These 
included cotton, yarn, fabrics, textile labels a nd accessories such as buttons and zippers, leather, 
dyeing services, silver and platinum, diamonds a nd other precious stones and textile machinery. 
(vi) Addressing the cost of services  
51. A second phase of the economic reform programme will tackle the high cost of services. The 
cost of International Private Leased Circuits (IPLC ) will be reduced by 25 percent immediately, while 
increasing competition and strengthening the Inform ation Communication Technology Authority (the 
telecommunications regulator) will promote more cost -effective supply in the future. Other measures 
call for liberalizing air access, developing ports in frastructure, increasing training and promotional 
efforts for the hospitality and tourism sector , and strengthening financial institutions. 
52. Restoring global competitiveness also requires modernizing and restructuring existing sectors 
(sugar and textiles and clothing) and, where a role fo r the public sector is indicated, providing public 
support for the development of new activities such as ICT, financial services, specialty tourism, 
seafood and land-based ocean activities. Achieving th ese objectives will entail adequate planning and 
preparation of long term development plans and sectoral strategies as well as enhanced access to 
financial services. 
53. Another challenge is to identify which services  have potential for growth and what are the 
markets for these services.  Export of professional services has been identified as one of the areas 
where the full potential remains untapped.  The Government is in the process of developing a roadmap for the export of professional services in th e following four areas: healthcare; HR training & 
development; IT and outsourcing; and prof essional services, including financial services.  
(vii) Improving the investment climate  
54. The range of reforms has started to make th e regulatory environment more transparent and 
less burdensome. The Business Facilitation (Misce llaneous Provisions) Act enacted in August 2006 
has amended 11 Acts with the objective to set a new course towards modernizing Mauritius by 
sweeping away the non-functional systems and putti ng an end to the suffocating bureaucracies that 
stifle enterprise. 
55. The major reforms brought about by the Busi ness Facilitation (Miscellaneous Provisions) Act 
eliminated the Trade Licence, merged the Building Permit and Development Permit into a single 
permit and reduced the number of days tremendously  i.e. 3 days for an SME and 14 days for other 
businesses.  It also provides for a new legal framewo rk, which allows business to start operations on 
the basis of self-adherence to comprehensive and cl ear guideline with ex-post control and monitoring. 
56. The plethora of incentive schemes has been streamlined with the abolishment of all 
investment schemes approval of investment projects,  except for the Real Estate Development Scheme 
and Freeport Scheme. At present, there is no need to submit project briefs and feasibility studies 
before starting a business except for the Freeport se ctor and the Real Estate Development Scheme. 
Moreover, in 2006, a single occupation permit compri sing the work and residence permits has been Mauritius WT/TPR/G/198 
 Page 17 
 
 
introduced for certain categories of non citizens. In this regard, Mauritius aims at attracting the right 
foreign talent, know how, ideas and technology.  Th e objective is to make of Mauritius the top 10 
investment destinations in the world. 
(viii) Democratizing the economy through participat ion, social inclusion and sustainability 
57. The Government announced an Empower ment Programme to ease the burden of 
unemployment, enhance job prospects, reduce labour  and skills mismatches and promote small and 
medium enterprise (SME) development. A big comp onent of the programme will provide for on-the-
job training or retraining for 20,000 unemployed and redeployed workers over the next five years.  
There will also be special programmes for women who have been particularly affected by the 
downsizing of the textile sector. Other components will make land available for small entrepreneurs, 
provide social housing and increase fina ncial and technical support for SMEs. 
58. Education and training will be key components of the Programme, designed both to broaden 
workers’ access to jobs and incr ease the skills base available to em ployers. Two priority areas for 
skills development and upgrading are the tourism se ctor and ICT. The Government also will support 
upgrading and training of teachers and supervisory personnel, review  the educational curriculum to 
encourage creativity and cognitive thinking, revita lize the "Zones d’Education Prioritaires" (ZEP) 
providing special support to pupils attending low performing primary schools,  and develop a national 
strategy for tertiary education to enha nce competitiveness in the global economy. 
59. To ensure sustainability of social spending, social subsidy programmes will be reconfigured 
to target income support to the needy, and th e pension age will be progressively raised from 60 
currently to 65 years. Another objective is to ensu re access to high quality health care for all, with 
special attention to vector borne disease (Chi kungunya), HIV/AIDS which has been on an upward 
trend among drug users, and diabetes, as Mauritius h as one of the world’s highest prevalence rates. 
(ix) Reform in the labour market 
60. As part of the reforms aimed at addressing the ex isting rigidities and mismatch of skills in the 
labour market, the Government has already announced its intention to review the current labour laws 
and regulations.  The main objective is to set  up a National Wages Council which will replace the 
current centralized system of wage determina tion. The implementation of the Wages Council will 
allow enterprises to focus on enhanced productivit y and competitiveness as well as cost reduction. 
61. In that respect two pieces of legislation, namely the Employment Relations Bill and the 
Employment Rights Bill, are presently in the final stages of drafting and will be presented to the 
Cabinet and the National Assembly in the very n ear future. The objects the Employment Relations 
Bill are to consolidate and revise the existing legisl ation, with emphasis on the "collective bargaining" 
process and enhancing the dispute settlement mechan ism. The Employment Rights Bill, in addition, 
seeks to introduce a workfare programme with a vi ew to consolidating measures relating to the 
training and re-skilling of workers, given the m obility of labour which the new economic paradigm 
demands.  
(x) Diversifying the economic base  
62. Mauritius has been a monocrop economy in th e 1970’s, and later dive rsified its economic 
base to encompass textile, sugar and tourism in the 1980’s to the ear ly 1990’s. Slowly, the services 
sectors started to assume a more prominent role with  the financial services sector, the consolidation of 
tourism services and Freeport activities. Now the ta rget is to consolidate the existing productive WT/TPR/G/198 Trade Policy Review 
Page 18 
 
 
sectors and to further enlarge the spectrum of ec onomic activities. Those new sectors which have been 
identified include: ICT/BPO, Real estate, seaf ood, aquaculture, pharmaceutical, and energy.  
63. The development of the Land Based Oceanic I ndustry, which ranks highly on the economic 
development agenda of Government, will contribute to widen the economic base of the country and 
boost existing industries through linkages w ith sectors like tourism and manufacturing. 
64. Mauritius is ideally positioned to exploit d eep-sea water of the Great Conveyor Belt.6 In this 
regard, the objective of Government is to comme rcially exploit the position of Mauritius on the Great 
Conveyor Belt through technologies and processes that  are sustainable, environmental friendly and 
which result in niche products that are in great  demand in the world. These products might include, 
inter alia, desalinated bottled water; fish and fish  related products from aquaculture; thalassotherapy; 
pharmaceutical as well as cosmetic products.  
(xi) Cost of the Economic Reform Programme  
65. The cost of the reform programme has been estim ated to be some four billion euros, which is 
roughly equivalent to the current GDP of Mauritius  over the next 10 years, with investment in 
production and infrastructure development accounting for respectively 1.9 billion and 1.8 billion.   As 
a small economy, it would be difficult for Mauritius to  successfully implement this reform programme 
without the assistance for external development pa rtners.  While domestic resources and Investment 
could finance 50% of the cost of the reform, th e remaining 50% will have to be met by FDI and 
external assistance, including grants and concessional loans.  In this regard Mauritius awaits the early 
operationalisation of the Aid for Trade initiative un der which it expects to secure enough resources to 
finance the Reform Programme. 
IV. LOCAL TRADE ENVIRONMENT 
(1) TRADE LICENSING  
66. In Mauritius, trade policies are geared toward s securing a liberal trading environment where 
import, export and re-export activities can take place with minimal restrictions. There are a limited 
number of products which are subject to import contro l.  Existing control relate mainly to health, 
sanitary and phytosanitary, security, social and envi ronmental concerns. The delivery of permits is 
under the purview of the relevant ministries such  as Commerce, Health, Agriculture, Fisheries or 
other controlling agencies. Similarly for exports, ther e are no restrictions except for a few products of 
strategic importance where export permits are require d such as cement, silver and gold. Clear rules 
and procedures are available on the web site of the Ministry of Industry, Small and Medium 
Enterprises, Commerce and Co-operatives for obtaining import and export permits. 
(2) COMPETITION  
67. With a view of providing a competitive trading environment, the Competition Act was voted 
in Parliament in November 2007. The Competition Act establishes the legal framework for the control 
of restrictive business practices so as to enhance competition in Mauritius and provide for fair and 
transparent competition rules. The Act also provid es for the setting up of an independent Competition 
Commission to administer all matters relating to competition in Mauritius. 
 
                                                      
6 The Great Conveyor Bell circles the globe moving massive undercurrents of 2,500 year old seawater 
of the highest purity, free of pollutants and rich in important minerals and nutrients. Mauritius WT/TPR/G/198 
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V. TRADE FACILITATION MEASURES 
(1) NEW FACILITIES AT THE LEVEL OF THE MAURITIUS CUSTOMS  
68. Since the recent years, Mauritius has adopted a programme for the Reform and Modernisation 
of our Customs facilities to provide world- class service to stakeholders as follows: 
(a) Single document for implementation procedures 
69. With the implementation of the automated Customs Management System (CMS), a single 
document (SGD) as recommended by WTO/WCO has been  introduced to replace all the different sets 
of documents which were bei ng used to clear goods from Customs.  The SDG is submitted 
electronically, processed and validated by CMS using the Electronic Data Interchange (EDI-
TradeNet) platform.  This has been a key component  in the trade facilitation concept and all customs 
declarations for imports/exports, freeport transactions  and movements of containers are done using the 
Single Goods Declaration. 
(b)  Risk assessment and management techniques 
70. Through the application of risk Management Techniques and establishment of user friendly 
procedures, Customs is trying to identify and c oncentrate only on those vessels, consignments and 
travellers who represent the highest risks to the country in terns of revenue collection, protection of 
society, environment and IPR. 
(c) Post audit clearance 
71. Post audit clearance is used as an effective tool  for customs control and it facilitates trade by 
allowing the rapid clearance of goods through custom s rather than attempting to verify declaration 
when they are presented.  It is a process which en ables customs officers to verify the accuracy of 
declaration, through the examination of books, r ecords, business systems and all relevant customs 
commercial data held by person or companies directly  or indirectly involved in international trade. 
(d)  Publication on the Internet 
72. Information on customs requirement that is of in terest to the general public is available on the 
website of the Mauritius Revenue Authority (MRA).  Customs laws and regulations are also published 
in Government gazette.  Publication of applied tariff rates is also available on the internet. 
(e) Publication of fees and charges 
73. Any fees and charges to be paid in connecti on with importation and exportation are specified 
in the Customs Regulations.   
(f) Voluntary compliance 
74. The Customs Department of the MRA is en couraging voluntary compliance by rewarding 
compliant traders with a new, expedited cargo cl earance process. A history of compliance and proof 
of being compliant in the past (t hrough a customs compliance audit) are some of the prerequisites for 
becoming eligible for membership to the CARGO FAST TRACK. 
75. Membership to the Fast Track allows traders to continue to get their paperless import/export 
declarations processed through a special new BL UE CHANNEL clearance process. Blue Channel WT/TPR/G/198 Trade Policy Review 
Page 20 
 
 
goods undergo a low rate of random cargo inspection and even when required it is undertaken at the 
importer’s premises. 
(g) Single Window 
76. A single window has been made operational at the Cargo Inspection Shed at the New Cargo 
Terminal. The aim is to provide office and counter space for inspectors employed by other 
government agencies. The single window ensures offi cer availability and customer convenience when 
cargo must be inspected by other agencies, samp les taken or laboratory analysis performed.  
(h) One Stop Shop for Exporters 
77. A single Window for exporters has been opened and hours of work extended in order to allow 
exporters to have their export declarations  processed and certificates of origin issued. 
(2) THE MAURITIUS CARGO COMMUNITY SERVICES (MCCS)  PROJECT  
78. The Mauritius Cargo Community Services (MCCS) emanates from a partnership between the 
public sector and private sector including the Ma uritius Chamber of Commerce and Industry, the 
Mauritius Export Association, the State Investment  Corporation and the Mauritius Ports Authority. 
The MCCS aims to set up an integrated logistics plat form in Mauritius by inte rlinking all stakeholders 
so as to optimise supply chain business processes betw een all cargo stakeholders. The new system is 
expected to considerably improve the dwell ti me for the movement of goods through the port by 
optimisation of data capture and tracking of goods. 
VI. PERFORMANCE OF MAIN SECTORS 
(1) TOURISM SERVICES  
79. The tourism sector continued to register a positive growth from the years 2001-06, with a 
continued increase in tourist arrivals. In 2006, the gr oss earnings per tourist reached Rs 40, 521 which 
is almost double the Rs 27511 figure for the year 2001.  
80. At present, the tourism sector is regulated by two main pieces of legislation, namely the 
Tourism Authority Act 2006 and th e Tourism Employees Welfare Act.  The objectives of the Tourism 
Act is to better regulate the operations of the pleasu re craft and also tourism enterprises which include 
all businesses dealing with tourists such as hotels, rest aurants, diving centres, tour operators, car rental 
companies and so on. The Tourism Employees Welfare Fund act aims at establishing a fund for the social and economic welfare of employees of tourism enterprises and their families.  
81. It is useful to note that the tourism sector is  largely dominated by the local group of hotels.  
Furthermore, the market is highly concentrated , with the six biggest hotel groups, namely New 
Mauritius Hotels, Sun Resorts, Naiade, Constance Hotels, Apavou and Accor controlling 60-65% of 
the market.   
82. Mauritius is aiming at 2 million tourists by the year 2015. This would require a 10.5% growth 
per annum, if account is taken of the fact that tour ist arrivals for the year 2006 totalled approximately 
788,292 tourists. With a view to maintaining an d sustaining the present growth in the tourism 
industry, the Ministry of Tourism has elaborated a few basic guidelines which are expected to guide a 
coherent and cohesive developmen t strategy in the tourism sector. The guidelines would cover the 
following: Mauritius WT/TPR/G/198 
 Page 21 
 
 
(i) Grading:  Priority of consideration would be given to hotel projects of either 4 or 5  
 star category in order to concentrate on traffic flows belonging to the high spending   tourists. (ii) Investment:  Government will exercise more caution in the choice of foreign 
 investors to ensure a diversified mix of capital mobilization. Opportunities would be  
 given to international brand names to invest  in luxury hotel development and thereby  
 benefit from their existing marketing network and expertise. (iii) Coastal guidelines: Some specific guidelines regarding for example, height, plot   coverage of buildings have been elaborat ed with a view to protecting the general  
 landscape and seascape characteristics of our natural landscape. Moreover, built  
 structures which combine judicious land use with environment friendly development   would be privileged.  (iv) Government would not encourage the deve lopment of sites which are not conducive  
 to quality development. Promoters would also  be expected to make maximum use of  
 the available beachfront. 
(v) Projects would have to strike the right equilibrium between the exigencies of the  
 tourism sector and the recreational needs of the Mauritians. (vi) Islets: Projects would only cover those isle ts which are not classified as strict nature  
 reserves and which have a tourist potential. 
 
(2) I
NFORMATION COMMUNICATION TECHNOLOGY SERVICES  
83. In line with the ICT vision of Mauritius to make of ICT a pillar of the economy and to 
position the country as a Regional ICT hub, the Na tional ICT Strategic Plan (NICTSP) 2007-11 has 
recently been adopted at Government level. It set s the framework for Government and Private sector 
interventions to meet the following the prim ary targets over a period of five years: 
  
• A 7% contribution into Mauritius GDP from o ffshore ICT export services which currently 
stands at less than 1%; 
• employment to increase from around 10,000 to at least 29,000 individuals in the ICT sector; 
• doubling the number of foreign investors into the ICT sector in Mauritius. 
 
84. The NICTSP would also seek to maximize the growth of the ICT industry for the export 
market and aim at making Mauritius a regional busin ess hub. It would try to do so by identifying 
schemes and facilities aiming at creating a more c onducive environment to attract international 
partnerships. 
(a) Recent Development in the ICT Sector 
 Infrastructure 
85. A modern telecommunications infrastructure has been developed. Mauritius has been 
connected to the SAFE/SAT3/WASC submarine fi bre optic cable system which provides high 
bandwidth international connectivity. The South Africa Far East (SAFE) cable network links 
Mauritius to Europe via South Africa and to As ia via India and Malaysia. Deregulation of the 
telecommunications sector has resulted in the expect ed reductions in tariffs coupled with enhanced 
quality of service.  
86. The costs of international connectivity as well as local phone costs experienced a significant 
decline recently. The connectivity costs between Ma uritius and Europe decreased by up to 52% over 
less than a year (from December 2005 to July 2006). Local phone costs were reduced by 27% (in WT/TPR/G/198 Trade Policy Review 
Page 22 
 
 
December 2005). International Private Lease Circuits  (IPLC) tariffs were brought down in July 2006 
resulting in an average drop of around 19% in the then existing rates. In September 2007, a further 
20% decrease in the tariffs of th e Half-Circuit, (IPLC) was undertaken to further promote Mauritius as 
a competitive ICT destination and is expected to  boost investment in Business Process Outsourcing 
and Call Centre businesses. 
87. The international connectivity status of Maur itius has been enhanced whilst also emphasizing 
the role of Mauritius as the bridge between Africa a nd Asia. This is done by exploring alternatives to 
facilitate connectivity to the East ern Africa Submarine System (EA SSy cable. In late 2006, Mauritius 
officially became part of the EASSy project  by signing the NEPAD ICT Broadband Network 
Infrastructure Protocol. Mauritius is spearheading, at the level of the IOC, an inter-island connectivity 
project which will consist of, the creation of a subm arine cable network between its member countries 
with an option of connecting to the EASSy cable  or any other alternative submarine cable.  
 Legal framework 
88. A crucial element for ICT devel opment is a proper legal and regulatory framework. In this 
perspective, appropriate legisl ations on data security, protection against cyber crimes, the 
liberalisation and regulation of telecommunicati ons and data protection have been enacted. 
 Human Resources 
89. The availability of a critical mass of qualifie d and skilled manpower is a sine qua non factor 
for ICT development. To build capacity for the ICT sector, educational and training institutions have 
been offering new courses in ICT and have considerably increased their student intake. 
90. ICT education and culture has been further promoted through the provision of broadband 
Internet connectivity  in all schools; the installati on of at least 5 computers in each  primary school; 
the implementation of the Universal ICT Edu cation Programme which provides a universally 
recognised basic benchmark imparting computer literacy/proficiency skills in the different segments of the population at a not-for-profit cost; the launching of the Community Empowerment Programme; the implementation of Public internet access points to service the community (Internet facilities to the 
unemployed, old age people and people with inabilities is provided free of charge). 
 Export oriented Industry  
91. The ICT industry in Mauritius has evolved towa rds export-oriented services. An increasing 
number of foreign ICT companies are setting up th eir development centres in Mauritius to conduct 
software development, multimedia, BPO and ITES  activities for the export market. Key players 
already in Mauritius include Microsoft, Infosys, Accenture, Oracle and Cisco. 
92. ITES/BPO activities uptake such that A T Kear ney, a world recognised global management 
consulting firm, has ranked Mauritius at the 25th pos ition in its latest report, well ahead of major 
offshoring competitors.  It is the only one of four new entrants in the Inde x to jump into the top 
25 countries. As at March 2007, there were 185 BPO companies employing 6,960 persons with a 
cumulative investment of Rs1.5 bn.  Moreover, an  additional investment of Rs 542 million is also 
envisaged by these companies. 
(b) Other Recent Development to enhance the efficiency of the ICT Sector 
93. Initiatives to facilitate the development of the local ICT industry include the following: Mauritius WT/TPR/G/198 
 Page 23 
 
 
(i) The management of an ICT Incubator Ce ntre by the National Computer Board (NCB); 
(ii) participation in international ICT exhib itions to promote the local ICT industry such as 
 SeCA, a major call centre fair held in Pari s, Govtech in South Africa and Outsource World 
 in New-York which are IT and BPO events; 
(iii) the organisation of Infotech, the largest national annual ICT event; 
(iv) the holding of the ICT Regional Conferen ce and the Buyers-Sellers Meet, which bring 
 together local and international ICT operators; (v) the facilitation of exports of ICT products and services; (vi) the compilation of promotional materials and  
(vii) the setting up of portals to promote the expansion of the ICT industry.  
 
94. Moreover, the coming into operation of a number of Government computerisation projects as 
well as the availability of on-line services will ensure  more efficiency and effectiveness in the 
delivery of Government services. 
(3) F
INANCIAL SERVICES  
95. Financial Services consist of  banking and non-banking activities and currently contributes 
about 11% to real GDP and is growing by an averag e rate of 8% per annum.  The financial Services 
sector employs around 9300 persons. 
(a) The Banking Sector 
96. With the continued development and sophisti cation of the banking industry, the Bank of 
Mauritius (BOM) has enhanced its regulatory frame work consequent to the promulgation of the 
Banking Act 2004 and the Bank of Mauritius Act 2004.  The Banking Act 2004 provides for the 
integration of domestic a nd offshore banking business and eliminat es the previous distinction between 
offshore banks and domestic banks.  The new legisla tion has helped to dissipate the misapprehension 
regarding regulation of offshore banks and further improve the overall image of our financial sector. 
97. The Banking Act 2004 has also been amended in  2007 to enable existing and new banks to 
provide Islamic financial services in Mauritius. 
98. Under the Bank of Mauritius Act 2004 and Banki ng Act 2004, the BOM is responsible for the 
regulation and supervision of banks , money-changers and foreign ex change dealers, and the deposit-
taking activity of non-bank financial instituti ons.  The other activities of non-bank financial 
institutions are regulated and supervised by the Financial Services Commission under the authority of 
the Financial Services Act 2007.  A banking licen ce should be accompanied by the payment of non-
refundable processing fee as stipulated in the re gulations made under the Banking Act 2004 and other 
guidelines/regulations issued under this Act.  Th e banks are required, under the Banking Act, to 
submit returns and statements as per format and frequency prescribed by the BOM. 
99. The minimum capital for operating a bank in Maur itius is MUR 200 million or the equivalent 
amount in any freely convertible currency held in assets in or outside Mauritius, as may be approved 
by BOM or such higher amount as may be prescribed, after deduction of the accumulated losses.  Banks have also to maintain a risk-weighted capital ad equacy ratio of 10 per cent or such higher ratio 
as may be specified by BOM. 
100. Banks have to comply with the provisions of the Financial Intelligence and Anti-Money 
Laundering Act 2002 and regulations issued under that Act.  The Act provides inter-alia, for measures 
to combat money laundering and that exchange of in relation to money laundering and reporting of WT/TPR/G/198 Trade Policy Review 
Page 24 
 
 
suspicious transactions to the Financial Intelligen ce Unit, established under the Act.  The Act replaced 
the Economic Crime and Anti-Money Laundering Act 2002. 
101. The BOM has set up the Mauritius Credit Inform ation Bureau (MCIB) in December 2005 as 
part of its objective to ensure the development of an overall sound credit environment.  At present 
13 banks are the main participants of the MCIB.  Other banks and non-bank deposit taking institutions 
are expected to join the MCIB in the year 2008.  The MCIB acts as a repository of credit information, 
which is used by banks to assess the actual exposure of  borrowers as well as their total risk profiles.  
Institutions involved in the MCIB update informati on on their customers’ debts which is in turn 
consolidated by the MCIB and provided on an on-line basis to participating banks.  As from 
1 December 2005, it is mandatory for all participan ts to make the necessary enquiry from the MCIB 
before appraising or reviewing any credit facility.  The MCIB aims at facilitating credit decision 
making for banks by providing them with a su mmary of borrowers’ overall indebtedness towards 
other participating institutions.  The MCIB is a usef ul instrument for the participating banks to reduce 
the level of non-performing advances in their portfolios. 
102. After extensive consultation with banks during the year 2005-06, a consensus was reached on 
the International Bank Account Number (IBAN) form at which was implemented by the banks as from 
March 2006.  Banks were requested to issue an IBAN to their clients as from 1 April 2006.  The BOM 
has also made a request to the European Comm ittee for Banking Standards (ECBS) to register the 
IBAN format for Mauritius. 
103. With a view to further modernizing the Payment System in Mauritius the BOI has embarked 
together with commercial banks, on a Cheque Trun cation Project.  Cheque Truncation represents a 
paradigm shift in the processing and cleaning of cheques whereby the recto and verso image of 
cheques are captured and forwarded by electronic me ans to the paying bank for cleaning.  The main 
benefits of the system are that it improves the payment system by reducing the cleaning delay to same day settlement and eliminated the physical moveme nt of cheques through the cleaning hours.  The 
project is expected to go live in August 2008. 
104. Another important development brought by  the Bank of Mauritius Act 2004 was the 
establishment of a Monetary Policy Committee (M PC). The MPC would be responsible for the 
formulation of the monetary policy to be c onducted by the Bank of Mauritius.  The MPC was 
launched on 23 April 2007.  The members of the MP C are the Governor, the two Deputy Governors, 
two Board members appointed by the Minister of Finance and three other persons appointed by the 
Minister who are neither Board Members nor employees of the Bank.  The Governor is the 
Chairperson of the MPC.  The MPC holds its meeti ngs on a quarterly basis.  Interim MPC meetings 
may be convened as and when the need arises.  To provide for further independence of the MPC, 
decisions of the MPC no longer requires the approval of the Board of Directors of the Bank of Mauritius after the enactment of the Finance Act 2007.  Effective September 2007, the MPC 
formulates and determines monetary policy. 
(b) Non-Banking Financial Services Sector 
105. In an attempt to keep pace with evolving inte rnational developments in the financial services 
industry, major changes were brought to the regulator y framework and the set up of financial services 
since the last trade policy revi ew of Mauritius. The non-banking financial services sector, which 
includes the global business sector, the insurance industry and capital market, is regulated since 2001 
by an integrated regulator, the Financial Services Commission (FSC).   Mauritius WT/TPR/G/198 
 Page 25 
 
 
(c) Reforms and legislative changes  
106. The Financial Services Act 2007(FSA) was introdu ced in 2007 to streamline and consolidate 
the licensing, regulatory and supervisory framework  for various non-bank financial institutions and 
financial service providers.  
107. The FSA introduces a new concept of global bus iness, which must now have substantive 
business activities being controlled and managed from Mauritius.   
108. In a view to attract further investment and to make Mauritius a more competitive jurisdiction 
there no longer is a prescribed list of activities qualifyi ng for a Category 17 global business. A global 
business company holding a Category 1 licence will now be able to c onduct any activit y, provided it 
is not unlawful or contrary to public interest  or will not cause prejudice to the good repute of 
Mauritius.   
Insurance Sector 
 
109. A new Insurance Act was introduced in 2005 to replace the Insurance Act 1987.  The new Act 
purports to improve the soundness of the insurance market in Mauritius and aims at enhancing the 
regulatory and supervisory insuran ce framework by incorporating inte rnational standards set out by 
the IAIS.  
110. Insurance companies are now subject to a risk  based capital requirement as per international 
standards. Special focus has al so been placed on early warning systems and the protection of 
policyholders.    
Capital Market Sector 
 
111. The Securities Act 2005 has brought the regulati on of the securities market in Mauritius in 
line with internationally accepted standards and princi ples, namely the principles of the International 
Organisation of Securities Commissions (IOSCO).  Th is has enhanced the confidence of both local 
and foreign investors in our securities markets. 
112. The new framework ensures an adequate level of protection to investors, as well as an 
orderly, fair, efficient and transparent market. Furthermore it puts in place a system of proper disclosure,   control and supervision of market  intermediaries and self-regulatory organisations. 
113. Any securities exchange, settlement and clearing facility as well as securities trading system 
require a licence from FSC.  
114. Investment dealers and Investment advisers mu st observe capital and liquidity requirements 
and other prudential requirements.  
                                                     
 
7 A category 1 Business corporation meant activities which were carried out within Mauritius in foreign 
currency in the following areas: Ai rcraft financing and leasing, asset management, consultancy services, 
employment services, financial services, funds management , ICT services, insurance, licensing and franchising, 
logistics and/or marketing, operational headquarters, pension funds, shipping and ship management, trading and 
any other activities as may be approved by the commission. 
 WT/TPR/G/198 Trade Policy Review 
Page 26 
 
 
(4) THE MANUFACTURING SECTOR  
115. The manufacturing sector remains a major pillar of the economy as it currently contributes 
19.8% to GDP.  As at December 2007, the manufacturing sector employed some 123,200 workers representing around 23.5% of the total work force.  Ho wever, it is worthwhile, noting that in 2001, the 
manufacturing sector generated some 140,700 jobs (around 28.5% of the total workforce). The 17,500 
job losses for the time period 2001-2007 were mainly due to contraction in the former EPZ sector.  
116. It is important to note that as from this year the Central Statistical Office no longer makes any 
distinction between the EPZ and non-EPZ sector.  In fact the Finance Act 2006 has abolished all incentive schemes initially provided for under the Industrial Expansion Act of 1993.  There is 
currently no EPZ regime in Mauritius.  Some ince ntives given to companies involved in spinning 
activities have been grand-fathered. Companies having started their operations by 30 June 2006 in spinning, weaving, dyeing and knitting activities,  will be exempted from corporate tax form 
10 income years from the income year in which they started their operations.  Moreover, those 
Companies starting their operations between 1 Ju ly 2006 and 30 June 2008 and engaged in spinning, 
weaving, dyeing and knitting activities will be exem pted from corporate tax up to 30 June 2016.  
Companies exempted as above will pay corporate tax at  the rate of 15% after the period of exemption. 
117. The average growth rate for the manufacturing sector for the period 2001-07 stood at 
approximately 0.5% mainly due to difficulties enc ountered in the former EPZ sector which recorded 
negative growth rates for the period 2002-05. Howeve r the manufacturing sector recorded 4% growth 
in 2006. A growth rate of 3.5% is forecast for the year 2007. Several initiatives to re-engineer the 
manufacturing sector have been undertaken by Enterprise Mauritius, which is a collaborative 
partnership between public and private sectors.  Actions have been initiate d in terms of business 
development, capacity building to enhance expor t readiness of industrial operators and product 
development taking into account the limited product basket. 
118. Trade Promotions in major international fair s in various sectors including apparel, agro 
industry, and printing have been undertaken to develop new export avenues for SMEs. Enterprise 
Mauritius is also active in assisting Mauritian compani es to develop cross border regional initiatives.   
119.  However, textile rebounded in 2006 as it recorded  a GDP sectoral real growth rate of 2.9%. 
120. Textiles remain an important contributor to the manufacturing sector.  However, other sub 
sectors have also performed well recently, namely: 
• Fish and fish preparations sector has been increasing steadily over the years from Rs 1.8 bn 
in 2001 to Rs 7.1 bn in 2006.  For the first semester 2007, an increase of 14.1% was 
experienced compared to the same period last year.  This is attributed mainly to the rise in the 
price of Tuna fish resulting from a short supply of fish. 
• Optical goods  sector witnessed a declining trend dur ing the period 2001 and 2003.  However, 
since 2004, there was a reversal in the declining trends; from Rs 159 mn in 2004 to Rs 207 mn in 2006.  For the first semester 2007,  exports for this sector reached Rs 100 mn.   
• The Pearl and Precious & Semi precious stones sub-sectors  has been increasing steadily 
over the years from Rs 881 mn in 2001 to Rs 1,514 mn in 2006.  For the first semester 2007, 
exports for the sector stood at Rs 748 mn. 
• Jewellery, goldsmith & silversmith wares  witnessed an upward trend during the period 
2001 and 2005 with a peak in 2002.  For the y ear 2006, a decline was noted and for the first 
semester of 2007, exports stood at Rs 457 mn.  Mauritius WT/TPR/G/198 
 Page 27 
 
 
• After an unfavourable performance in 2002, Watches and clocks  has been increasing steadily 
as from 2003.  For the first semester 2007, the up ward trend has persisted to reach Rs 303 mn. 
• Exports of Toys, Games & Sporting Goods have  experienced a downward trend since 2003.  
The decline of this sector is attributed to th e closures of several enterprises in this sector. 
 
(5) THE AGRICULTURAL SECTOR  
121. The contribution of the agricultural sector to GDP  registered a decline from 7.3% in 2001 to 
5% in 2007. For the sugar sector, which includes both sugar cane and sugar milling, the decline in 
contribution ran from 5.2% to 3.1% over the same period. 
122. Mauritius’s increasing reliance on food imports, be it for direct consumption or for 
processing, has revealed the precarious nature of its food security. The frequent outbreak of diseases, 
natural calamities and climate change, which greatly  affect agricultural production over the world, 
coupled with the gradual phasing out of export s ubsidies in developed countries, are having an 
increasingly marked impact on the local economy. 
123. Over the 2001-2005 period, Mauritius has importe d food for an average value of Rs 8,120M 
annually. The average yearly increase was of the or der of Rs 750M and in 2005, the import bill for 
agricultural and food products am ounted to Rs 9,700 million.  Th is represents about 10% of the 
country’s total imports. The Food Import Bill is ho wever just below the level of foreign currency 
earnings derived from sugar expor ts (Rs 10,536 million in 2005). 
124. The above situation will most likely worsen in  the near future as sugar prices drop (by 17% 
this year and by a total of at least 36% as from 2009)  and food prices continue to soar on international 
markets.  The plight of Mauritius as a Net Food Importing Developing Country (NFIDC) will require 
adequate redress measures, including those, which may be taken at the international level, namely the 
WTO.  
(a) From a Sugarcane Island to a Broad-Based Economy 
125. By providing Mauritius with a predictable and st able source of earnings over the years, the 
Sugar Protocol has been instrumental in developi ng the local sugar industry and in fostering the 
economic diversification of the island. Revenues from sugar exports have continually been re-invested 
into other economic activities, some of which ha ve today developed into major pillars of the 
Mauritian economy, namely manufacturi ng, tourism and finance. Sugar is still an important pillar of 
the economy and will continue to play a vital role in the socio-economic fabric of Mauritius and its 
physical environment. 
126. Practically all of Mauritius’ s ugar production is exported to the EU under the ACP/EU Sugar 
Protocol. Sugar currently accounts for almost 24% in  value terms of the country’s domestic exports of 
goods and up to 3.1% of its GDP (of which 0.7% from sugar milling). 
127. However, under the new EU sugar regime, which lasts from 1 July 2006 to 
30 September 2015, the EU reference price for both raw and white sugars will undergo a staged cut up 
to 36% by October 2009.  
128. As the biggest quota holder under the Sugar Protoc ol (37%), Mauritius is the mostly affected 
country. It is expected to lose up to €895 million during the nine years of the implementation of the 
new Sugar Regime and suffer from a direct  permanent loss of € 95 million annually. WT/TPR/G/198 Trade Policy Review 
Page 28 
 
 
129. The adverse impact of this fall in sugar e xport earnings is compounded if the less tangible 
benefits of the Sugar Protocol are also considered . These benefits are just as valuable, particularly 
with regard to the multi-functional role of the suga r industry and its benefits to other industries as well 
as to the country’s physical environment.  
130. The high versatility of the crop has actually enab led value optimisation of its main product, 
sugar, into a wide variety of higher value-adde d sugars, as well as the production of valuable co-
products such as electricity from bagasse.  The suga r sector has thus evolved into a vast sugar cane 
cluster with a very high multiplier effect at the m acro-economic level. More importantly, the industry 
has consistently met its overseas market commitments ove r a period of more than 30 years without 
any interruption. 
(b) Domestic Reforms 
131. The agricultural sector and in particular its s ugarcane cluster is to remain a major source of 
wealth for the Mauritian economy and one of the country’s main development pillar.  
132. In 2005, against a backdrop of decreasing revenue  resulting from the drastic price cut of 36% 
over a period of 4 years, Government launched the Roadmap for the Sugarcane Industry for the 
21st Century and subsequently in  2006, the Multi-Annual Adaptation Strategy (MAAS) Action Plan 
2006-15. The MAAS aims at further rationalising an d integrating the sugar sector by its conversion 
into major clusters having the capacity to tap to th e fullest potential the country’s sugar cane biomass 
resource, converting it into the most economically viable and sustainable production mix, consisting 
mainly of sugars, electricity and ethanol. The plan  calls for, amongst others , centralisation of sugar 
factories, regrouping of small planters, right-s izing of human resources through a Voluntary 
Retirement Scheme, extension of field mechanisation through land derocking and preparation, and the 
production of electricity and ethanol from the cane biomass. 
133. The Action Plan contains bold and deep measure s aiming at ensuring the long term viability 
and sustainability of the industry and enabling it to  continue fulfilling its multifunctional role in the 
country. The MAAS has received broad consensus with the industry's stakeholders. The course is thus 
set for a new development age for the Mauritian agricultural sector at large. 
134. The core objectives of the plan are thus to: 
(i) Further modernize and diversify the sector with a view to transforming it into a more cost-
 efficient and competitive sugar cane cluster, geared towards the production of raw, white, 
 industrial and special sugars, electricity from bagasse/coal and ethanol from molasses;  
(ii) Continuing to fulfil the sugar trade commitments of the country;  and  
(iii) Helping to reduce the country’s depe ndency on imported fossil fuels and on oil in 
 particular.  
 
135. The unilateral denunciation of the Sugar Protocol  by the EC compounded with possible high 
tariffs cuts on sugar on its exports market could give a serious blow to the sugar sector in Mauritius at 
a time when it is reforming its industry become more competitive. The importance of sugar to the 
Mauritian economy has been recognized by the WTO se cretariat in a study on preferences and by the 
Chair of the WTO Negotiating Group on Agriculture. The latter indicated in the modalities paper on 
agriculture of July 2006 that trade preferences in sugar is a “big ticket” thereby acknowledging the 
sensitivity of this commodity. Mauritius is aware that as a result of liberalization preference erosion is 
inevitable. However Mauritius believes that countri es that are presently benefiting from long standing 
preferences (sugar in our case) should be given suff icient policy space to adjust by preserving to the Mauritius WT/TPR/G/198 
 Page 29 
 
 
maximum extent possible through namely lower tari ffs cuts over a longer period on markets of export 
interest to them. 
(c) Non Sugar Agricultural Sector 
136. Since the mid-seventies, various policies have b een implemented in Mauritius with a view to 
promoting the development of the non-sugar agricu ltural and agro-industrial sectors. The objectives 
were to achieve self-sufficiency , increase food self-reliance and redu ce dependency on imports, and to 
encourage the export of high value crops and the development of the agro-processing sector.  
137. However, in spite of various incentive measur es, the overall results have been well below 
expectations, except for a few succe ss stories such as the production of fresh vegetables, of poultry 
meat and eggs. This situation is  mainly due to the fact that Mauritius suffers from a number of 
inherent constraints, including, inter alia, a narrow domestic market, pressure on land and on other 
natural resources, generally unfavourable agronomic and climatic conditions and the limited range of 
crops which can be grown on an economically viable scale.  
138. Some agro-processing industries targeting main ly the local market have succeeded in 
establishing themselves in the transformation of impor ted raw materials (edible oil refining, animal 
feed compounding and wheat flour milling, food processing). As concerns agricultural exports, they 
are limited to anthurium flowers and to small volumes  of tropical fruits, e.g. pineapples and litchis.  
139. Mauritius therefore still faces major challenges of  food security and remains vulnerable to the 
volatility of international food prices and trade terms. The gradual liberalization of trade in agriculture 
is bringing about major structural changes to the global market for agricultural and food commodities. 
The reduction in domestic support an d the gradual elimination of export subsidies will discourage 
exports to the detriment of net food importing countri es, which have usually taken advantage of their 
relative cheapness.  
140. In addition, the increasing demand for better quality and safer products which can withstand 
the test of traceability will exert more pressure on th e global market, as a result of which the supply of 
foodstuffs, particularly for net food importers like Mauritius, could well become problematic. In other 
words, having the financial means of buying f ood will no longer be synonymous with guaranteeing 
the food security of a nation. 
(d) The Way Forward for the Non-Sugar Sector 
141. It is against this background that Mauritius is  undertaking a review of its agribusiness sector, 
with a view to assessing its strengths and weakness es and also to identifying the opportunities and 
threats for its future development. 
142. The objectives are namely to: 
(i) promote a transition from the traditional, practices towards a sophisticated, technology-
 based approach to agriculture with a focus on attaining a certain degree of self-sufficiency;  
(ii) meet quality exigencies;  
(iii) develop the local agro-processing industry; 
(iv) promote entrepreneurship; (v) optimise export opportunities; (vi) conform to international no rms governing food safety; and  
(vii) maximise on the potential benefits of regionalisation. WT/TPR/G/198 Trade Policy Review 
Page 30 
 
 
VII. IMPLEMENTATION OF URUGUAY RO UND AGREEMENTS, BILATERAL AND 
 REGIONAL COOPERATION 
(1) CHALLENGES AND CONSTRAINTS IN IMPLEMENTING THE RESULTS OF THE URUGUAY 
 R OUND AGREEMENTS  
143. Despite its smallness and resource constraints,  Mauritius has made tremendous efforts in 
implementing the Uruguay Round Agreements.  With a view to increasing transparency in its trade regime, Mauritius has to a very large extent res ponded to its notification obligations. Trade Policy 
Formulation is undertaken in consultation with va rious stakeholders both from the public and private 
sector. Moreover, the enquiry points for sanitary  and phytosanitary measures (SPS), Technical 
Barriers to Trade (TBT) and Trade in Se rvices have been operational since 1995. 
144. Mauritius has established regulations that pe rmit effective action against any act of 
infringement of Intellectual Property Rights (IPR). Th e Judiciary has been granted adequate power to 
require infringers to pay damages to compensate IP R holders for the injury suffered. The following 
pieces of legislation which encompass our obligati ons under the TRIPS Agreement have been passed 
by Parliament: 
• The Patents, Industrial Desi gns and Trademarks Act 2002 
• The Protection against Unfair Practices (IPR) Act 2002 
• The Layout designs (topographies) of Integrated Circuits Act 2002 
• Geographical Indications Act 2002     
 145. It should be noted that the Copyrights Act is in force in Mauritius since 1997.  Regarding 
Industrial Property Legislation, only the Patents,  Industrial Designs and Tr ademarks Act 2002 and the 
Protection against Unfair Practices Act have b een proclaimed, due to capacity constraints.  
146. The Industrial Property Office is responsible for processing registration of patents, trademarks 
and industrial designs. The Anti-Piracy Unit has be en set up within the Police Department for the 
enforcement of IPR by intercep ting counterfeit and pirated goods. 
147. It is also worth worthwhile noting the Trade Remedies Bill is in the final stages of drafting 
and scheduled to be passed by parliament in early 2008. 
(2) P
ARTICIPATION IN THE DOHA DEVELOPMENT ROUND  
148. Mauritius believes in a fair and rules-based multila teral trading system which aims at results 
which are balanced, all inclusive and equitable.  Mauritius has actively participated in all the WTO 
Ministerial Conferences since the Uruguay Round and is currently active in the Doha Development 
Round negotiations. 
149. As a small island developing state, Mauritius has be en very vocal with a view to ensuring that 
its concerns are adequately addressed in the contex t of the WTO negotiations. Its main concerns are 
characterised by the exiguity of its market, geogr aphical isolation, and pr oneness to natural disasters 
among others. In this regard it has been on the fore  regarding the elaboration of a Work Programme 
for Small Economies in accordance with Paragraph 35 of  the Doha Ministerial Declaration.  One of 
the major concerns of Mauritius is related to th e loss of Market Access which will result from the 
erosion of trade preferences.  In this regard, it has with its ACP partners identified those products that 
are the most vulnerable to preference erosion for which it is seeking a trade solution.   Mauritius WT/TPR/G/198 
 Page 31 
 
 
150. In light of the coherence mandate of the WT O, Mauritius strongly advocates for the extension 
of support facilities to enable the most vulnerable c ountries to fully participate in International Trade 
and to integrate the multilateral trading system.  In  this regard, it has played a major role in framing 
the Aid for Trade initiative as a major development component of the Doha Development Round and 
has been actively involved in the WTO Aid for Trade Task Force in representing the ACP Group. 
151. While there is general consensus on the broad recommendations of the Aid for Trade (AFT) 
initiative, there is an urgent need now to ensure that the AFT is operationalised as early as possible, 
independently of the results of the WTO negotiations.  Mauritius str ongly believes that Market Access 
will never deliver in the absence of the capacity to produce.  For Mauritius this is very important in 
view of the erosion of the Trade Preferences whic h can be offset by Aid for Trade as well as the 
reform program whose financing is expected to be partially met by Aid for Trade funds. 
(3) BILATERAL RELATIONS  
152. Mauritius gives significant importance in consolidat ing its ties with existing partners such as 
India and Pakistan as well as forge new strategic part nerships. In this context, Mauritius and India are 
working towards the conclusion of a Comprehe nsive Economic and Partnership Cooperation 
Agreement (CECPA). The CECPA would provide a new dimension to the trading arrangement 
between the two countries, encompassing not only trade in goods, but also services, investment and 
economic cooperation. Talks on the Preferentia l Trading Agreement and Economic Cooperation 
under the CECPA were completed in August 2006 and th e PTA is expected to be signed this year.  
153. Moreover, Mauritius and Pakistan signed a Pr eferential Trading Agreement on 30 July 2007 
which came into force on 30 November 2007. The PTA applies to a list of  thrust products that 
constitute a good potential in dynamising trade.  The two countries have agreed to extend tariff 
concessions to each other on more than 100 tariff lines during the initial period and subsequently 
expand this list during the course of future talks at the level of the Joint Working Group. The Joint 
Working Group Mauritius/Pakistan will start discuss ions on the Free Trade Agreement (FTA) in early 
2008. The FTA would cover substantially a ll trade except a few sensitive products.  
154. A Trade and Investment Framework Agreem ent (TIFA) between Mauritius and USA was 
signed on the 18 of September 2006 in Washington w ith the objective of strengthening and expanding 
trade ties between Mauritius and the US. It also provides the opportunity to work more closely on a broad range of issues, including moving the WTO Doha Development Round forward and on 
implementation-related issues with respect to th e African Growth Opportunity Act (AGOA). It is 
expected that the TIFA would pave the way for d eeper economic relations between the two countries.  
Both countries are now working on the conc lusion of a Bilateral Investment Treaty. 
155. Mauritius is also working towards the strengthe ning of its economic and trade relationship 
with the People Republic of China.  Both sides expect to enhance their long existing economic ties 
through an Economic and Trade Cooperation Agreement. 
156. Similarly the possibility of concluding a Co mprehensive Economic and Trade Cooperation 
Agreement with Russia and Brazil is also being explored. 
157. Mauritius is committed towards fostering South-So uth Cooperation. In this regard it made a 
request for observer status in the SAARC. The 29
th Session of the South Asian Association for 
Regional Cooperation (SAARC) Council of Minist ers held on 7 December 2007 in Delhi has 
welcomed Mauritius to be associated as Observer. Mauritius is also keen to strengthen trade and 
economic relation with the Association for South Ea st Asian Nations ASEAN and its member states 
and in this regard has applied for observer status in the organisation. WT/TPR/G/198 Trade Policy Review 
Page 32 
 
 
(4) REGIONAL INTEGRATION  
158. Regional integration is viewed as a logical expa nsion of the economic space of Mauritius. In 
this respect, Mauritius has been very proactive in th e regional negotiations at the level of the Southern 
African Development Community (SADC), the Co mmon Market for Eastern and Southern Africa 
(COMESA), the Indian Ocean Rim Association for Regional Co-operation (IOR-ARC) and the Indian 
Ocean Commission (IOC) with the aim of facilita ting trade and economic cooperation through the 
removal of tariff and no-tariff barriers, and harm onization of the various standards on sanitary and 
phytosanitary measures, and technical regulations.  
(i) Southern African Development Community (SADC) 
159. One of the main objectives of the SADC Trad e Protocol is to achieve a Free Trade Area 
(FTA) by 2008 whereby 85% of all intra-SADC trade will be duty free, and the remaining 15% 
(sensitive products) will be liberalized by 2012. It h as to be noted that the list of sensitive products of 
Mauritius amounted to around 10% at the time of entry into force of the SADC Trade Protocol. 
160. However, Mauritius has not been able to reap th e full benefits of the Trade Protocol due to 
several trade-related constraints na mely the stringent rules of origin and the non-tariff barriers. The 
Mid-Term Review of the SADC Trade Protocol has strongly recommended that the SADC rules of 
origin be made simpler, flexible and adapted to the region’s own realities. As regards to the 
negotiations pertaining to the SADC Custom Un ion, Mauritius has consistently underlined the 
importance of the consolidation of the SADC FTA before moving ahead in the regional integration 
process.  
(ii) Common Market for Eastern and Southern Africa (COMESA) 
161. Mauritius has been a founding member of the Preferential Trade Area (PTA) for Eastern and 
Southern Africa which existed prior to the estab lishment of the COMESA.  The adoption of the 
COMESA Treaty in 1993 replaced the PTA.  As far as trade is concerned, one of the main objectives 
of the COMESA Treaty was the establishment of a Free Trade Area which was successfully launched 
in October 2000.  Mauritius, al ong with eight other COMESA Memb ers, became members of the Free 
Trade Area since its launching.  The Free Trade Area now has 13 participating member states8, out of 
19 member countries. 
162. Mauritius is also an active participant in discussions aimed at establishing the COMESA 
Customs Union by December 2008.  The Common Ta riff Nomenclature is being finalised and the 
rates for the Common External Tariff have already been agreed by the COMESA Council of Ministers 
as follows: 
Raw Materials   0% 
Intermediate Goods  10% Finished Goods   25% 
Capital Goods   0% 
 
163. It is worth noting that the COMESA CET Rates ha ve formed the basis for tariff liberalisation 
between the EU and the Eastern and Southern A frica countries in the context of the Economic 
Partnership Agreement (EPA) negotiations. 
                                                     
 
8 Djibouti, Burundi, Comoros, Egypt, Kenya, Liby a, Madagascar, Malawi, Mauritius, Rwanda, Sudan, 
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(iii) Economic Partnership Agreement (EPA) 
164. In June 2000, 15 European Union (EU) countri es and the African, Caribbean and Pacific 
(ACP) group of 77 developing nations signed a new 20-year trade and economic cooperation 
agreement. It called for fundamental changes in th eir longstanding relationship to reflect the changing 
times. The Cotonou Agreement replaced four successi ve Lomé Conventions, three of which were of 
five years duration while the fourth was for 10 years with a mid-term review. The successive agreements offered not only preferential, non-reci procal access to EU markets for most ACP exports 
but also provided aid to finance much need ed development projects in ACP countries. 
165. The Cotonou Agreement, however, represented a fundamental departure from the Lomé 
Conventions. The advent of the WTO provided for a fundamental shift away from those trade 
preferences which were behind the success of sugar,  bananas and rum in many ACP states. In this 
respect, anticipating the inevitable phase-out of pref erences and the adoption of new trade liberalizing 
rules, Cotonou committed the EU and ACP to begi n negotiations on their first-ever reciprocal 
"Economic Partnership Agreements" (EPAs). 
166. The EU and six ACP regions engaged in EPA  negotiations in 2004 to conclude their 
respective agreements before 31 December 2007 wh en a WTO waiver for existing EU preferences 
was scheduled to expire.  
167. Mauritius, along with 15 countries
9 has been negotiating within the Eastern and Southern 
Africa (ESA) configuration. The main areas of ne gotiations were divided in  six clusters, namely 
market access, development, fisheries, agriculture, trade related issues and services.  
168. Negotiations in most ACP regions, including  the ESA configuration have been behind 
schedule as compared to the road map initially agreed with the EU. Consequently full negotiations 
could not been completed on the targeted date of  31 December 2007 in all the regions except for the 
Caribbean region which signed a full EPA on the 15 December 2007.  
169. With a view to preventing any trade disrupti ons, the ESA countries agreed to focus on those 
aspects of the Agreement that would have to comply with the provisions of the WTO, namely trade in 
goods but also development to create the necessary balance. Consequently Mauritius together with 
four ESA countries Madagascar, Comoros, Seychell es and Zimbabwe initialled an interim agreement 
involving the trade in goods provisions, developm ent chapter as well as issues where agreement has 
been achieved, including fisheries.  
170. Mauritius initialled the interim agreement on 4 D ecember 2007. It will liberalise almost 95% 
of its products within the next 15 years after a moratorium of five years as specified in the tariff 
schedule.  The EC on the other hand would provide  duty free quota free access on all products with 
the exception of sugar and rice which are subject to longer transition period.  
171. The interim agreement also provides for more flexible rules of origin on several products 
including textiles and clothing.  In the case of t una, ESA countries will also benefit from an automatic 
derogation of 8,000 tons for canned tuna  and 2,000 tons for tuna loins.   
172. Development is a core priority for ESA c ountries. The Interim Agreement contains a 
comprehensive chapter on development, including a jointly agreed matrix comprising of projects 
linked to the EPA. 
                                                      
9 Burundi, DR Congo, Comoros, Djibouti, Ethiopia, Eritrea, Kenya, Madagascar, Malawi, Rwanda, 
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173. The Interim Agreement will be replaced by a fu ll EPA. Negotiations are set to continue in 
2008 on all outstanding issues, namely services, agri culture and trade related issues which include 
trade facilitation, SPS, investment, compe tition policy and government procurement. 
(iv) Indian Ocean Rim Association for Regional Cooperation (IOR–ARC) 
174. The main focus of the IOR-ARC is on econom ic cooperation and particularly on trade and 
investment.  It is primarily an outward looking  forum for economic dialogue and cooperation. The 
main difficulty for working on a trade agenda ha s been lack of a framework agreement. Some 
members are now working a draft PTA which is belie ved may provide the proper vehicle to liberalise 
trade in the region. However, the greatest challe nge would be how to reconcile IOR-ARC PTA with 
the trade regime of the existing Free Trade Areas (FTAs) and Regional Economic Communities 
(RECs) in the region.  
VIII.  CONCLUSION 
175. The third Trade Policy Review reveals the commi tment of Mauritius to adhere to its WTO 
obligations and the willingness to undertake a seri ous economic reform programme on account of 
global economic challenges with a view to mainta ining the economy on a strong growth path.  Trade 
policies in Mauritius are an integral part of econom ic policies aimed at improving the standard of 
living of the population through the establishmen t of thriving, competitive and modern economy 
growing at high rates.  However, given its sma ll net-food importer, Mauritius remains vulnerable to 
external trade shocks.  Without external support,  it would be difficult for Mauritius to meet the 
adjustment costs with a view to improving co mpetitiveness and confronting the challenges of 
globalisation.  For Mauritius to maintain its de velopment momentum, much would depend on not 
only the trade opportunities provided by the multilater al trading system, but more importantly as to 
how the WTO would address its concerns. 
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