Mozambique WT/TPR/S/209 
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II. TRADE AND INVESTMENT REGIMES      
(1) GENERAL FRAMEWORK  
1. The 1990 Constitution of Mozamb ique was amended in 2004.1  The principal modifications 
made in 2004, which have since been progressively im plemented by law, concern in particular:  the 
law-making powers granted to the executive th rough the introduction of the decree-law;  
decentralization of decision-making powers;  reform of the court system;  the creation of an Ombudsman (not enacted);  and the establishment of a Superior Council of the Media.   
2. The Constitution confers powers on the President  of the Republic, the Assembly of the 
Republic, the Government (or Council of Ministers) , the courts and the C onstitutional Council;  the 
current organization of powers is governed by the amendments adopted in 2004.  The President is 
elected by direct universal suffrage for a term of fi ve years, and can be (consecutively) re-elected once 
only.
2  He is the Head of State and presides over the Council of Ministers, composed of the Prime 
Minister, appointed by the President, and the Mini sters.  The unicameral Assembly of the Republic, 
the highest legislative body of the Republic of Mozambique, comprises 250 deputies elected for a 
five-year term (renewable).  The legislative and presidential elections are held on the same cycle.  The 
Council of Ministers formulates and implements  government policies.  
3. Legislation may be initiated, inter alia,  by the deputies, the President, and the Council of 
Ministers.3  The Assembly adopts draft laws by majority vote of those present (provided that at least 
half of the deputies are present), these are then promulgated by the President.4  The 2004 Constitution 
introduced the decree-law, a legislative act passed  by the Council of Ministers pursuant to the 
authorization of the Assembly of the Republic.5  The Council of Ministers may ratify agreements, 
including on trade and investment, by ministerial re solution, while the Assemb ly ratifies agreements 
and treaties by the adoption of laws (section (3));  the WTO Agreement was ratified by the Council of 
Ministers in 1994.6 
4. Under the Mozambican Constitution, the hierar chy of legal instruments is:  (i) ratified 
international treaties and agreements, laws, and decree-laws;  (ii) decrees;  (iii) ministerial resolutions;  
and (iv) ministerial diplomas.  The Constitution provi des for the legal acts of the Assembly, President, 
and Council of Ministers to be pub lished in the Government Gazette  (Boletim da Republica ), which is 
available only as a printed document.  The main trad e-related laws, decree-law s, and resolutions of 
Mozambique are set out in Table II.1.  
                                                      
1 The Constitution of 30 November 1990 was drafted as part of the peace negotiations that ended the 
civil war.  Following the General P eace Agreement (GPA) signed in 1992, the first multi-party elections were 
held in 1994.  The Constitution was revised in 1998 and again in 2004.  The text of the Constitution, as of 
1 January 2005, may be viewed a t:  http://confinder.richmond.edu/ad min/docs/Constituti on_(in_force_21_ 
01_05)(English)-Mozlegal.pdf [1 April 2008]. 
2 The most recent presidential election was held in December 2004 ("Elections in Mozambique".  
Viewed at:  http://africanelections.tripod.com/mz.html [1 April 2008]). 
3 Article 183 of the Constitution. 
4 According to Article 163 of the Constitution, the President shall promulgate laws within 30 days 
following their reception.  Prior to the expiration of  that deadline, the President may submit a request to 
Parliament, which cannot be refused, to reconsider the law.  However, if Parliament upholds the law by a two-
thirds majority vote, the President is required to promulgate it. 
5 Under Articles 143 and 181 of the Constitution, a decree-law is adopted by the Council of Ministers 
and is promulgated by the President.  A decree-law passe d by the Council of Minister s is deemed automatically 
ratified unless its ratification is demanded by a minimum of  15 deputies during the session of the Assembly of 
the Republic held immediately after its publication. 
6 Resolution of Council of Ministers No. 31/94 of 20 September 1994. WT/TPR/S/209 Trade Policy Review 
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Table II.1 
Mozambique's principal trade-related laws and regulations, April 2008 
Sector Instrument/Law 
Tariff Decree No. 39/2002 of 26 December  2002, as amended by Law No. 03/2007 
of 7 February 2007 
Customs valuation Decree No. 38/2002 of 11 December 2002 
Customs procedures Diploma Minist erial No. 262/2004 of 22 December 2004  
Value added tax Law No. 32/2007 of 31 December 2007 
Excise taxes Decree No. 52/1998 of 29 September 1998, as amended by Decree 
No. 37/2002 of 11 December 2002 
Import prohibitions and licences D ecree No. 39/2002 of 26 December 2002 
Pre-shipment inspection Decree No. 56/1998 of 11 November 1998 
Technical standards and regulations Resolution No. 51/2003 of 30 November 2003 
Sanitary and Phytosanitary measures Decree No. 15/2006 of 22 June 2006 and Diploma Ministerial No. 9/2007 of 
31 January 2007 
Investment (except for mining and petroleum) Law No. 3/93 of  24 June 1993 and its regula tions contained in Decree 
No. 14/93 of 21 July 1993 
Industrial Free Zone  Decree No. 62/99 of 21 September 1999, as amended by Decree No. 35/2000 
of 17 October 2000 
Mining Law No. 14/2002 of 26 June 2002  
Petroleum Law No. 3/2001 of 21 February 2001  
Fiscal Benefits Code Decree No. 16/2002 of 27 June 2002 
Commercial Code Decree No. 2/2005 of 27 December 2005 
Labour Law Law No. 23/2007 of 1 August 2007  
Protection of industrial property Decree No. 4/2006 of 12 April 2006 
Land Law Law No. 19/97 of 1 October 1997 
Protection of copyright and related rights Law No. 4/2001 of 27 February 2001  
Competition Resolution No. 37/2007 of 24 July 2007 
Privatization of State-owned enterp rises Law No. 16/75 of 13 February 1975 
Government procurement Decree  No. 54/2005 of 13 December 2005 
Flora and fauna    Law No. 10/99 of 7 June 1999 
Fisheries Decree No. 43/2003 of 10 December 2003 
Aquaculture Decree No. 35/2001of 11 November 2001 
Hydrocarbons (downstream activities) Decree No. 63/2006 of 26 December 2006 
Electricity Law No. 21/97 of 1 October 1997 
Water Law No. 16/91 of 3 August 1991 
Ground transport (automobiles) Decree No. 24/89 of 8 August 1989 
Ground transport (public) Decree No. 39/2005 of 29 August 2005 
Maritime transport Law No. 4/96 of 4 January 1996 
Civil aviation Resolution No. 40/2002 of 14 May 2002 
Telecommunications Law No. 8/2004 of 11 July 2004 
Tourism Law No. 4/2004 of 17 June 2004 
Foreign exchange regime Law No. 3/96 of 4 January 1996 
Banking services (credit and microfinance institutions) Law No. 9/2004 of 21 July 2004 
Insurance Law No. 3/2003 of 21 January 2003 
Source : Mozambican authorities. 
5. Judicial authority is vested in the Supreme C ourt, the Administrative Court and the courts of 
justice.  The court structure has four layers:  a Supreme Court in Maputo, high courts of appeal, 
provincial courts, and district courts;  the high cour ts of appeal were introduced as a result of the 2004 
Constitution to reduce the number of cases dealt with by the Supreme Court.7  The Administrative 
                                                      
7 Open Society Foundation (2006). Mozambique WT/TPR/S/209 
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Court is the highest body in the hierarchy of administ rative, customs, and fiscal courts.  The courts of 
justices are empowered to deal with commercial disputes, and various mechanisms are provided for the settlement of disputes between foreign investors and the State (section (4)).  Judges are appointed 
by the President upon the recommendation of the Superi or Council of the Judiciary, and the Assembly 
approves nominations.  The Constitutional Council rul es on the constitutionality of treaties, laws, and 
decree-laws, as well as conflicts of jurisdicti on, and makes prior evaluations of referenda. 
6. The territory of Mozambique is subdivided into  ten provinces and the capital city of Maputo.  
The 2004 amendments to the Constitution specify th at provinces are headed by Governors, which 
preside over Governments, whose members are a ppointed centrally, while legislative power is 
entrusted to Provincial Assemblies, elected for a five-year term.  Effective implementation of 
decentralized decision-making, and the associated human and financial resources to implement these 
decisions, is planned.  However, decentrali zed decision-making will not cover fiscal matters, 
including in regard to tax incentives granted to investment projects. 
7. The Ministry of Industry and Commerce (herei nafter the "Ministry of Commerce", MIC) 
formulates and implements trade and industrial policy.   The Ministry is in charge of WTO-related 
matters, and of negotiating trade and investment agreements.  Other ministries involved in trade 
related matters include the Ministry of Finance, in charge of the tariff, customs, taxation, and 
government procurement, as well as those responsi ble for sectoral matters.  Inter-ministerial 
committees are also involved in th e activities of the Ministry of Co mmerce, as was the case for the 
preparation of this Report;  however, there does not appear to be a permanent inter-ministerial 
committee dedicated to trade policy, including WTO, matters or meeting on a regular basis to review 
them. 
8. Public/private sector dialogue is maintained pr imarily through the Confederation of Economic 
Associations ( Confederação das Associações Económicas,  CTA) created in 1999.
8  T h e  C T A  i s  
involved formally, through an inter-institutional co mmittee, as a stakeholder in the formulation and 
implementation of trade and investment policies.  
(2) POLICY OBJECTIVES  
9. Government policy is articulated in Five-Year Plans, which are evaluated by the Assembly of 
the Republic (Article 198 of the Constitution);  the current plan covers the period 2005-09.9  
Mozambique’s economic and social development strategy for 2007-09, is set out in the Action Plan 
for the Reduction of Absolute Poverty (PARPA II) adopted in 2006.10  Since the adoption of PARPA I 
in 200111, poverty-reduction goals and programmes are in tegrated in the Government’s Five-Year 
Plans. 
10. PARPA II's major objective is to reduce the incidence of poverty from 54% of the population 
in 2003 to 45% in 2009.  The plan has three p illars:  economic development, human capital, and 
governance.  As regards economic development, th e authorities are focussing on rural development, 
fostering the national business community, and enco uraging investment (section (4)).  Mozambique 
has an industrial development policy (Chapter IV(3)), but the Government is relying on the 
development of agriculture, mining, and tourism to accelerate economic growth, and it encourages both national and foreign direct investment in these sectors.  The State is seeking to strengthen the 
private sector and improve the international competitiveness of goods and services by dismantling the 
                                                     
 
8 CTA online information.  Viewed at:  http://www.cta.org.mz/ [19 June 2008]. 
9 Government of Mozambique (2005). 
10 IMF (2007b). 
11 Government of Mozambique (2001). WT/TPR/S/209 Trade Policy Review 
Page 14 
 
 
numerous supply-side constraints, and in particul ar improving access to basic infrastructure and to 
credit.  Improvement of human capital is key to attain ing these targets.  In this respect, the goal is to 
improve access of the population to education (incl uding business-related skills), clean water, and 
medical services, with a particular focus on the ba ttle against HIV/AIDS, malaria, and tuberculosis. 
11. PARPA II also revises the content of Mozambique’s Trade Policy and Strategy (TPS), 
adopted in April 1999.12  It states that an international trade policy and a strategy for regional 
economic integration in Southern Africa and in the major world markets is to be designed, that is 
"favorable, in aggregate terms, to Mozambican producers and consumers".13  The authorities 
specifically highlighted the importance to fiscal reve nue of duties and taxes collected on international 
trade, and emphasized the role of the tariff in prom oting industrial development and job creation.  The 
authorities note that the process of revising Mozambi que’s trade policy and strategy is benefiting from 
the Integrated Framework .  In principle, Mozambique giv es priority to deepening trade and 
investment ties with its partners in the Southe rn African Development Community (SADC), through 
their Regional Indicative Strategic Development Plan (RISDP) (section (3)(ii)(b)).14  However, 
Mozambique also recognizes the importance of acc ess for its goods and services to a wider set of 
markets, and thus seeks to attract tourists and investors from around the world. 
12. The authorities are aware of the negative im pact of poor governance on Mozambique's 
economy, and they have considered this as a priori ty under PARPA II.  To this end, Mozambique has 
taken several measures to deal with governance issues,  which have been financed mainly with foreign 
aid.15  The measures include the adoption of a new government procurement regime16;  upgrading the 
Anticorruption Unit to a Central Office for Comb ating Corruption (which has carried out several 
high-level investigations);  implementing th e State's Financial Administration System ( Sistema de 
Administração Financiera do Estado , SISTAFE) to improve the accountability of tax collection and 
the transparency of the allocation of funds;  and restructuring Customs (from 1996 to 2005).  In 2006, 
the authorities launched a National Anti-corruption Strategy17;  and, in order to improve transparency, 
announced their intention to join the Extractive Industries Transparency Initiative (EITI), which 
concerns transparency of State receipts generate d from natural resource-based enterprises;  this has 
not yet been formalized in a candidacy.18  The creation of an Ombudsman to protect citizens’ rights in 
relation to the public administration is foreseen under the 2004 Constitution, but has not yet been 
enacted.19 
                                                      
12 Ministry of Industry and Trade (1999). 
13 IMF (2007b). 
14 SADC online information, "Corridors driving infr astructure development".  Viewed at: http://www. 
sardc.net/editorial/ sadctoday/view.asp?vol=352&pubno=v9n1. 
15 ADB Document ADF/BD/IF/2006/54 "Mozambique:  Country Governance Profile", 22 March 2006.  
Viewed at: http://www.afdb.org/pls/porta l/url/ITEM/4B53DE2232C471A3E040C00A0C3D6960  
[6 April 2008]. 
16 Decree No. 54/2005 of 13 December 2005. 
17 CIRESP (2006). 
18 Extractive Industries Transparency Initiative (E ITI).  Viewed at:  http://eitransparency.org/ 
[9 April 2008]. 
19 Chapter III, Title XII of the Constitution. Mozambique WT/TPR/S/209 
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(3) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO 
13. Mozambique signed the Marrakesh Agreement on 15 April 1994 and became a WTO 
Member on 26 August 1995.20  Mozambique is a least developed count ry (LDC).  It is not a party to 
any of the plurilateral agreements or to the protoc ols and agreements concluded under WTO auspices.  
Mozambique grants at least most-favoured-nati on (MFN) treatment to all its trading partners. 
14. The concessions made by Mozambique during the Uruguay Round are contained in 
Schedule CXIX for goods (Chapter III(2)(iv)(a)), a nd document GATS/SC/58 with regard to services 
(Chapter IV(5)).  Under its Uruguay Round commitments, Mozambique bound tariffs on all 
agricultural products at a ceiling rate of 100%.  Tariff bindings on non-agricultural products are very 
limited;  only 19 lines at the HS 1996 eight-digit leve l were bound at either 5% or 15%.  "Other duties 
and charges" on all bound items are bound at 100% .  Mozambique's specific service commitments 
concern only banking and othe r financial services (excluding insurance) (Chapter III). 
15. As an LDC, Mozambique benefited from trans itional periods to implement a number of its 
commitments under various WTO Agreements .  Since its first TPR in 2001, Mozambique has made 
some progress in the implementation of WTO Ag reements (e.g. Customs Valuation and IPR) 
(Chapter III), but it has only notified its implem entation of the Agreement on Customs Valuation, 
through a decree adopted by the Government on 11 December 2002.21  This is the only notification 
Mozambique has made to the WTO, other than informing the TRIPS Council of its contact point for industrial property matters in 1997.
22  Mozambique participated in the WTO Ministerial Conferences 
held in 2001 and 2003 (but not in 2005)23, and generally supported th e positions of the LDCs, the 
African Group, the ACP countries, and the Group of 77 Developing Countries on questions relating to 
multilateral obligations and the strengthening of technical assistance activities.  
16. Mozambique is eligible for the WTO’s trad e policy courses and has benefited from several 
other types of technical assistance offered by the WTO.  This includes the completion in 2004 of a 
Diagnostic Trade Integration Study (DTIS) under th e auspices of the Integrated Framework, and 
Mozambique is also one of the eight JITAP II count ries.  Nonetheless, further technical assistance is 
needed (Annex II.1), as Mozambique’s participati on in the WTO system continues to encounter  
problems similar to those noted at the time of its first TPR in 2001.  For instance, Mozambique has 
failed to comply with WTO notification obligations in  most areas, with the result that the information 
available to WTO Members on Mozambique’s trade re gime is very limited.  Capacity building in a 
number of other areas would also be desirable,  including WTO Agreements and the negotiations 
under the Doha Agenda.  Moreover, despite maintaining a diplomatic mission in Geneva, the level of 
resources continues to be an obstacle to Mozambique 's more active participation in day-to-day WTO 
activities. 
                                                      
20 Resolution of Council of Ministers No. 31/94 of 20 September 1994. 
21 WTO document G/VAL/N/1/MOZ/1, 4 July 2005. 
22 WTO document IP/N/3/Rev.2/Add.5, 9 July 1997. 
23 WTO documents WT/MIN(01)/ST/84, 11 November 2001, and WT/MIN(03)/ST/74, 
12 September 2003.   WT/TPR/S/209 Trade Policy Review 
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(ii) Regional trade agreements 
(a) African Union24 
17. Mozambique is a founding member of the African Union (AU), the successor to the 
Organization of African Unity (OAU).25  The aim for the AU is to form an economic and monetary 
union with institutions including:  the Conference  of Heads of State and Government (already 
established), the Council of Ministers (established) , the Peace and Security Council (established), the 
Commission of the Union (established)26, the Pan-African Parliament (established), together with a 
Central Bank, a Monetary Fund, an African Investme nt Bank, a Court of Justice, an Economic, Social 
and Cultural Council (statutes already prep ared), and several technical committees. 
18. The African Economic Community (AEC) was f ounded in June 1991 under the auspices of 
the OAU, now the AU, under the terms of the Treaty of Abuja.  This treaty provides for the creation 
of an African common market in six stages over 34 years.  The integration process is based on the 
coordination and harmonization of tariff and non-tariff measures between various trade and 
subregional groups (known as Regional Economic Co mmunities (RECs)), with a view to establishing 
a continent-wide customs union.  Mozambique belongs to the Southern African Development 
Community (SADC), one of the seven RECs recognized by the African Union.   
19. The New Partnership for Africa's Developm ent (NEPAD), an AU initiative launched at the 
Lusaka (Zambia) Summit in 2001 is aimed, inter alia,  at developing the appropriate infrastructure to 
support the process of regional integr ation and at improving governance.27  As a result, in 2004 
Mozambique joined NEPAD’s African Peer Review Mechanism (APRM) a self-monitoring 
mechanism adopted in 2003;  Mozambique  has yet to submit its first review.28   
(b) Southern African Development Community (SADC)29 
20. Mozambique is a founding member of the SADC, which was established in 1992.30  T h e  
objectives of SADC (Article 5 of the Treaty) are to promote economic development, peace, and security for the people of Southern Africa, thr ough regional integration and the development of 
complementary national and regional strategies  and programmes.  The member states have 
emphasized that all of SADC's activities and progr ammes must address poverty alleviation and that 
HIV/AIDS must be accorded priority , as a major threat to the attain ment of SADC's objectives.  The 
institutional framework of the SADC comprises the Conference of Heads of State and Government, 
the Council of Ministers, the SADC, and the Orga n on Politics, Defence and Security (OPDS).  The 
                                                     
 
24 For information on the African Union, see:  http://www.africa-union. org [10 April 2008]. 
25 The Charter establishing the OAU was signed on 25 May 1963.  The Constitutive Act of the African 
Union was adopted at the summit held in July 2000 in Lomé (Togo).  The African Union, which has replaced 
the OAU, was proclaimed on 11 July 2001 in Lusaka, Zambia, following ratification of the Constitutive Act by more than 44 of the OAU's 53 member states.  The African Union was launched by the Durban Summit of 
9 July 2002. 
26 AU online information.  Viewed at:  http://www .africa-union.org/root/au/organs/The_Commission_ 
en.htm [16 June 2008]. 
27 NEPAD online information.  Viewed at:  http://www.nepad.org [10 April 2008]. 
28 For information on NEPAD’s APRM, see:  http ://www.nepad.org/2005/files/ documents/156.pdf 
[10 April 2008]. 
29 SADC online information.  Viewed a t:  http://www.sadc.in t/ [13 April 2008]. 
30 SADC succeeded the Southern African Development Coordination Conference (SADCC), of which 
Mozambique was also a founding member.  The members of the SADC are:  Angola, Botswana, Democratic 
Republic of the Congo, Lesotho, Madagascar, Ma lawi, Mauritius, Mozambique, Namibia, South Africa, 
Swaziland, Tanzania, Zambia and Zimbabwe.  The Seychelles left the Community in 2002. Mozambique WT/TPR/S/209 
 Page 17 
 
 
SADC Secretariat (located in Gabarone, Botswana ), supports the Standing Committee of Officials, 
which reports to the Council of Ministers. 
21. Regional economic integration objectives include  the establishment of a free-trade area by 
2008, a customs union by 2010, a common market by 2015 and a monetary union by 2016.  The 
SADC free-trade area was established at the start of 2008 pursuant to the Protocol on Trade, as 
amended31;  it was notified to the WTO under Article XXIV of the GATT 199432, and considered by 
Members at the meeting of the Committee on Regional Trade Agreements (CRTA) on 15-16 May 
2007.33  The tariff reduction schedules of each of the member states provides for three main categories 
of products:  those in category A (mainly capital goods) are to be liberalized from the first year of 
becoming a member;  products in category B (e.g . goods that constitute major sources of customs 
revenue) are to be liberalized gradually by 2008;  and products in category C (deemed sensitive and 
may not exceed 15% of each member's total value of merchandise trade) are to be liberalized by 2012.  
In addition, a fourth category (Category E (exe mpted)) covers goods ineligible for preferential 
treatment under general and security exceptions perm itted by the Protocol.  S ugar is not included in 
the free-trade regime and is the subject of special treatment.34  Other objectives of the Protocol on 
Trade include:  the harmonization of customs rule s and procedures;  the adoption of international 
standards;  the harmonization of sanitary and phyto- sanitary measures;  the elimination of non-tariff 
barriers;  and the liberalization of trade in services. 
22. SADC's rules of origin are negotiated on a produc t-by-product basis (Chapter III(2)(iii)), and 
negotiations are ongoing for certain products, includi ng wheat flour and products thereof, electrical 
products, and optical, photographic, measuring, and surgical instruments.35  Textiles and clothing 
originating in Malawi, Mozambique, Tanzania, a nd Zambia (MMTZ countries) were granted the one-
stage tariff change for a period of five years (until 2009) subject to quotas for their exports into SACU, while the agreed general rule is the tw o-stage transformation or double tariff change.
36 
23. The Protocol on Trade, itself part of SADC’s Regional Indicative Strategic Development Plan 
(RISDP), adopted in 2003, aims to promote cohere nt national policy-making across members to attain 
SADC’s objectives.37  National programmes in key areas are clustered to promote integrated national 
policy-making.  This integrated focus has le d Mozambique to promote regional development 
"corridors". 
                                                      
31 The Protocol was signed on 24 August 1996 and entered into force on 25 January 2000, while the 
amendment entered into force on 7 Augu st 2000.  The SADC members that ha ve acceded to the Protocol are:  
Angola, Botswana, Lesotho, Madagascar, Malawi, Maur itius, Mozambique, Namibia, South Africa, Swaziland, 
Tanzania, Zambia and Zimbabwe (the Democratic Republic of the Congo is not a signatory).  Angola has not 
yet submitted its offer for tariff reduction to the memb ers of the SADC (see  WTO document WT/REG176/4, 
12 March 2007). 
32 WTO documents WT/REG176/N/1, 9 August 2004; WT/REG176/N/1/Rev.1;  27 August 2004; 
WT/REG176/1, 8 October 2004;  WT/REG176/2, 8 October 2004;  and WT/REG/176/2/Rev.1, 
19 November 2004. 
33 WTO document WT/REG176/M/1, 12 June 2007. 
34 The long-term objective for sugar is to fully liberalize its trade within the SADC region after 2012.  
The SADC market-access and cooperation agreement for sugar has been implemented since 2001, and 
incorporated as Annex VII to the amended Protocol on Trade.  A SADC Regional Sugar Strategy is being 
developed in order to promote the sugar industries in the region. 
35 For example, for electrical mach inery, some members want to prevent "single assembly" of white 
goods, while for plastics they want to prevent the use of imported plastic waste.  
36 Malawi Revenue Authority (undated). 
37 SADC Secretariat (undated). WT/TPR/S/209 Trade Policy Review 
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24. Mozambique is one of the SADC members engage d in negotiations with the EC with a view 
to concluding an economic part nership agreement (EPA) by December 2008 (section (c) below).38 
25. Certain SADC members (not Mozambique) also belong to the East African Community 
(EAC) and/or to the Common Market for Eastern and Southern African (COMESA).  In view of the 
overlapping membership of these agreements, and in the context of the EPA negotiations, EAC trade 
ministers recently recommended harmonizing the trade regimes of the three regional trade 
agreements, specifically with reference to a comm on external tariff and related trade policy areas.39 
(c) Relations with the European Communities  
26. Mozambique is a signatory to the Cotonou Agreement between the European Communities 
(EC) and 78 African Caribbean and Pacific (ACP) st ates,  which entered into force in April 2003.40  
The trade provisions comprise one of the mechanis ms for cooperation between the ACP countries and 
the EC, whereby the latter grants duty-free admiss ion for non-agricultural products and the majority 
of processed agricultural products originating in 78 ACP countries (excluding South Africa) on a non-
reciprocal basis;  a WTO waiver applied until 31 December 2007.41  Since 2004, Mozambique has 
also benefited from the preferences granted under the Sugar Protocol.42 
27. The Cotonou Agreement provides for economic pa rtnership agreements (EPAs) between the 
EC and various ACP regional groupings;  Moza mbique belongs to the SADC group (section (b) 
above).  Mozambique and the EC initialled an  Interim Agreement on Market Access, Economic 
Cooperation and Development, and Fisheries at the end of 200743, with a full EPA expected to be 
concluded by 31 December 2008.  Certain ACP countries use the preferential access to the EC market 
provided under the "Everything but Arms" (EBA) initia tive, to which Mozambique, as a LDC, is also 
eligible.44  However, according to the authorities, Mo zambique uses only the preferences granted 
under the Cotonou Agreement, whose rules of origin are considered more favourable.  The principal 
export concerned is aluminium. 
28. The EC provides duty-free and quota-free access fo r all products originating in Mozambique, 
with the exception of rice and sugar  Mozambique exports sugar to the EC under three types of 
preferential quota, under the Sugar Protocol of the ACP-EC Agreement, the special preferential sugar 
                                                      
38 Europa online information.  Viewed at:  h ttp://trade.ec.europa.eu/doc lib/docs/2007/december/ 
tradoc_137364.pdf [16 June 2008]. 
39 Trade Law Centre for Southern Africa (2008). 
40 The agreement was signed on 23 Ju ne 2000 at Cotonou, Benin, and entered into force officially on 
1 April 2003 after its ratification.  It replaced the Lomé Convention (in effect since 1975) whose fourth 
extension expired at the end of February 2000. 
41 WTO document WT/MIN(01)/15, 14 November 2001. 
42 The EC undertook to purchase some 1.4 million tonnes of sugar, at the guaranteed Community price, 
from countries that are signatories to the Sugar Protocol under the Cotonou Agreement (Barbados, Belize, 
Republic of the Congo, Fiji, Guyana, Côte d'Ivoire, Jamaica, Kenya, Madagascar, Malawi, Mauritius, 
Mozambique, Suriname, St. Kitts and Nevis, Swaziland, Tanzania, Trinidad and Tobago, Uganda, Zimbabwe, 
and Zambia);  the bilateral agreement between the EC an d India contains identical provisions.  The new market 
organization for sugar entered into force on 1 July 2006 and provides for a 36% cumulative reduction in the price of sugar on the European market between 2006 and 2009 (WTO document WT/TPR/S/177/Rev.1, 
15 May 2007). 
43 European Commission, DG Trade (2007). 
44 Under this initiative, the EC has granted duty-free access since 2001, without any quantitative 
restriction, to products originating from the LDCs (except for arms and ammunition).  However, temporary 
exceptions apply to rice and sugar (until end 2009), but the exception for bananas ended in 2005 (WTO document WT/TPR/S/177/Rev.1, 15 May 2007). Mozambique WT/TPR/S/209 
 Page 19 
 
 
regime (SPS)45, and the EBA initiative (Chapter IV(2)( iii)).  The EPA foresees the continued 
implementation of the Sugar Protocol until 30 Se ptember 2009, followed by a transition period until 
30 September 2015. 
(d) Relations with the United States  
29. Mozambique is one of 38 countries eligible for the African Growth and Opportunity Act 
(AGOA)46, established by the United States under its Ge neralized System of Preferences (GSP).  
Beneficiaries are granted duty-free and quota-free access to the U.S. market until 2015 for a range of products, including selected agricultural and textile products, with a general exception of clothing.  
However, Mozambique is among the 26 AGOA countri es eligible for preferences on clothing, which 
allow, since 1 March 2002, for the inclusion of fabrics from third countries, a provision that will 
remain in force until 30 September 2012.
47  Mozambique’s exports under AGOA and its GSP 
provisions increased 41% in 2006 to a total of $12 million.48  In addition, Mozambique benefits from 
preferential access for its sugar within the limit of a quota (Chapter IV(2)(iii)). 
30. Mozambique signed a trade and investment fra mework agreement (TIFA) with the United 
States49, which provides a context for bilateral consu ltations on trade and investment matters;  
Mozambique and the United States had already conc luded a bilateral investment treaty in 1998.  
Mozambique is also among the 11 countries of S ub-Saharan Africa eligible for a Millenium 
Challenge Account (MCA), but an ag reement is still being developed. 
(e) Other preferential trade agreements and arrangements 
31. Since its previous review in 2001, Mozambique has signed preferential trade agreements with 
Malawi (2005) and Zimbabwe (2004), these superseded colonial trade arrangements.50  These 
agreements have not been notified to the WTO.  The agreement with Malawi provides for each party 
to grant duty-free treatment to originating imports, with certain exceptions (e.g. beer, branded soft 
drinks, chicken, cooking oil, eggs, petroleum pr oducts, sugar, and tobacco).  The agreement with 
Zimbabwe provides for similar duty-free treatment, with exceptions including beer, branded soft 
drinks, manufactured tobacco, road motor vehicles, and sugar.  Both agreements stipulate that goods 
seeking preferential treatment need to enter Moza mbique through specified customs posts, and vice 
versa.  Mozambique is also a signatory to th e Global System of Trade Preferences (GSTP) among 
developing countries.51 
                                                      
45 For a detailed explanation of the distinction between the Sugar Protocol and the Agreement on 
Special Preferential Sugar Regime, see ACP Sugar onlin e information.  Viewed at: http://www.acpsugar. 
org/Overview.html [16 June 2008]. 
46 USTR (2007). 
47 Mozambique is among the 17 AGOA countries that also benefit from the provision on handmade 
(category 9) products. 
48 USTR (2007).  
49 USTR, Press Release, 21 June 2005, "United States and Mozambique Sign Trade and Investment 
Framework Agreement".  Viewed a t:  http://www.ustr.gov/Document_ Li brary/Press_Releases/2005/June/ 
United_States_Mozambique_Sign_Trade_Investment_Framework_Agreement.html [12 June 2008]. 
50 The 1959 Trade Agreement betwee n Portugal and the Federation of Rhodesia and Nyasaland. 
51 Parties to the GSTP Agreement.  Viewed at:  http://www.unctadxi.org/templates/Page_1702.aspx 
[14 October 2008]. WT/TPR/S/209 Trade Policy Review 
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32. Many countries extend (non-reciprocal) preferential tariff treatment for goods originating in 
Mozambique under the Generalized Sy stem of Preferences (GSP).  In addition, China grants "special 
preferential tariff treatment" to certain originating products from Mozambique.52 
(4) INVESTMENT REGIME  
(i) Overview 
33. The main changes to Mozambique’s investme nt regime during the review period are the 
adoption of a new Commercial Code, a consolidated C ode of Fiscal Benefits, and a new Labour Law.  
The Investment Code and its regulation remain in force53, and the Investment Promotion Centre (CPI) 
continues to operate as a "one-stop shop" to promot e and facilitate national and foreign investment in 
Mozambique.  Other laws related to investment ar e the Industrial Free Zones Regulation and the Land 
Law;  the investment regime also comprises bilateral agreements on investment promotion and protection.  Despite the Government’s efforts to improve the investment environment, investors in 
Mozambique still face many bureaucratic and infrastru ctural hurdles.  For instance, the regime on 
access to land is considered restrictive, and othe r barriers to doing business include comprehensive 
licensing of activities
54, and inspections of premises, as well as  the level of taxation in the principal 
target sectors for investors.  Hence, according to the World Bank, Mozambique ranks 141st out of 178 
countries (in 2008) for ease of doing business, making it a "high cost economy", including in relation to neighboring countries also competing for foreign direct investment.
55 
(ii) Institutional and legal framework  
34. The Ministry of Planning and Development is responsible for investment in Mozambique.56  
The Investment Promotion Centre ( Centro de Promoção de Investimentos,  CPI), established in 1993, 
remains responsible for dealing with all invest ment procedures and for promoting Mozambique as a 
destination.57  
35. The CPI processes applications to register  foreign and national investment projects58, and 
provides services to companies wishing to establish in Mozambique.  The CPI charges investors for 
its services and is financially autonomous.  It re quires 20 working days for processing applications 
and delivering permits, and more ti me is required when projects need a title for the use of land from 
the Ministry of Agriculture.  The CPI also grants the approval requir ed for companies to have access 
                                                      
52 Regulations - PRC Customs Administrative Measures Concerning Origin of Import Goods Enjoying 
Special Preferential Tariff Treatment (10 July 2006).  Viewed at: http://gbcode.hktdc.com/gb/www.hktdc.com/ 
report/reg/reg_060702.htm [10 June 2008]. 
53 Law No. 3/93, of 24 June 1993 and its regulations contained in Decree No. 14/93 of 21 July 1993, as 
amended by Decree No. 36/95 of 8 August 1995. 
54 Decree No. 39/2003 of 26 November 2003;  and Decree No. 49/2004 of 17 November 2007. 
55 World Bank (2008). 
56 Decree No. 14/93 of 21 July 1993. 
57 CPI online information.  Viewed at:  http://www.cpi.co.mz [28 April 2008]. 
58 The proposal must contain:  a request by the investors for authorization; particulars and curriculum 
vitae of all investors or, when the investor is a compa ny, the relevant financial statements; a description of 
technical, commercial, and financial viability, and details of management, human resources structure, 
implementation schedule, and operating methods of the implementing company; minutes of Articles of 
Association of the project implementing company.  See Globe Africa online information, "Mozambique Investment Policy".  Viewed at:  http://www.globeafrica.com/Mozamb/mozamb2.htm [28 April 2008].  Mozambique WT/TPR/S/209 
 Page 21 
 
 
to the benefits granted under the Fiscal Benefits C ode.  It appears, however, that investors consider 
the procedure too cumbersome and costly.59 
36. The Investment Code  continues to  provide standard protection to investors:  protection of 
property rights, and compensation for expropriation;   the remittance abroad  of funds earned from 
investment activities;  access to the Code of Fiscal Benefits (section (iii));  and dispute settlement. 60  
Both national and foreign direct investment are subj ect to registration and prior authorization to enjoy 
the guarantees granted under the Code.  Mozambi que has minimum investment thresholds of 
US$5,000 for national investment and US$50,000 for fore ign investment.  In addition, the Investment 
Code provides for private sector participation, at the Government’s discretion, in certain activities 
reserved to the public sector (production of electricity ;  supply of water in urban centres;  operation of 
postal services and telecommunica tions;  development and opera tion of national parks; and 
production, distribution, and trade in arms and munitions). 
37. Foreign investors may seek to resolve disput es with the Government through the domestic 
judicial system or, in the event of failure, refer th e dispute by common agreement to arbitration under:  
(a) the International Centre for Settlement of Invest ment Disputes (ICSID), or the International Centre 
for the Settlement of Investment Disputes between St ates and Nationals of other States;  (b) the ICSID 
Additional Facility (1978);  or (c) the Interna tional Chamber of Commerce.  Mozambique is a 
member of the Multilateral Investment Guarantee Ag ency (MIGA), which offers investors guarantees 
against non-commercial risks.61  The Centre for Arbitration, Mediation and Conciliation (CAMC), 
created in 2002, provides dispute resolution services on commercial matters to individuals.62 
38. A new Commercial Code, governing the establis hment of companies, appears to have 
improved the legal environment for investment.  The Code stipulates modern corporate governance 
rules.  It also modernized the business registration process by introducing an electronic format, eliminated the provisional registration, and made not aries optional.  Hence, company registration has 
been reduced by almost three months.
63  The Code allows for companies to take two forms:  LDA 
(Sociedade por quotas ) and SARL ( Sociedade Anonima ).64  A company may start operating once its 
Articles of Association have been published in the Official Gazette , it has been registered in the 
Commercial Register and with the local tax author ities, and it has been issued with an operating 
licence.  All companies or persons wishing to undert ake an industrial or commercial activity require a 
licence from the Ministry of Commerce65, which also licenses foreign business representation and 
foreign trade operators (Chapter III(2)(i)), subject to the payment of fees.66  A simplified licence has 
been available since March 2008.67  In addition, one-stop shops were  established in 2007 to complete 
the requirements for establishing a business at the provincial level. 
                                                      
59 FIAS (2006). 
60 Law No. 3/93 of 24 June 1993 and its regulations contained in Decree No. 14/93 of 21 July 1993, as 
amended by Decree No. 36/95 of 8 August 1995. 
61 Seven projects have benefited from MIGA guarantees.  Viewed at: http://www.miga.org/ 
projects/index_sv.cfm?srch=s&stid=1517&hctry=154c&hcountrycode=MZ&dispset=10&srow=1&erow=10 
[23 April 2008]. 
62 Law No. 11/99 of 8 July 1999. 
63 World Bank (2008). 
64 To incorporate a company (LDA  or SARL) the following document s are required:  a certificate 
confirming that no other company with a similar name already exists;  proof that  the minimum share capital 
specified has been paid up;  the co mpany's Articles of Association;  and identification of shareholders. 
65 Decree No. 39/2003 of 26 November 2003. 
66 Decree No. 49/2004 of 17 November 2004.  Fees are set out in Ministerial Diploma No. 89/2005 of 
7 March 2005. 
67 Decree No. 2/2008 of 12 March 2008. WT/TPR/S/209 Trade Policy Review 
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39. Sector-specific licences may also be required.  For example, a licence issued by the Ministry 
of Tourism is required to operate in the tourism s ector (Chapter IV).  According to the World Bank, 
Mozambique ranks 144th in the world (out of 178 countri es in 2009) for ease of starting a business 68, 
thus the FIAS has recommended that licensing should be established for all businesses that do not 
pose any significant risk to safety, health, and the environment.69 
40. A new Labour Law was adopted in 200770, to address what was considered as a major 
bottleneck for potential investors.71  The principal changes concern:  increased flexibility for firms in 
hiring, firing, and employing workers;  a reduction in payments to be made in the event of labour 
redundancies, and a shorter notice period (from 90 to  30 days);  and institutional changes in the 
conflict resolution system of labour relations.  Howe ver, the new Labour Law continues to restrict the 
hiring of foreign staff, providing for maximum quotas according to the number of employees72, unless 
the investment project is granted an exemption, for example where the necessary skills are unavailable 
domestically.  The minimum wage is adjusted annually by recommendation of the Labour Consultative Council, the tripartite negotiati ng forum between the government, unions, and 
employers' associations.
73 
41. With respect to land, the Mozambican Constitu tion (Article 109) reserves ownership to the 
State alone.  Domestic and foreign persons may obtain non-transferable usage rights under the Land Law adopted in 1997.
74  Land access criteria are more restrictiv e for foreigners than for Mozambican 
nationals:  for foreigners, natural persons may obtain by access upon minimum residency in 
Mozambique of five years, and legal persons mu st be established or registered as a company in 
Mozambique.75  Application for land use must be made to the Cadastre, and may be granted on a 
provisional basis for two years to foreigners and fi ve years to nationals.  Following an inspection to 
determine whether the land is being used for th e purpose specified, a definitive authorization is 
granted for 50 years (renewable for 50 years).  The se inspections add to the cost and difficulty of 
doing business in Mozambique.  
42. Foreign direct investment is subject to regist ration with the Bank of Mozambique, and prior 
authorization is required for repatr iation of profits, dividends or capita l, and to service foreign loans in 
excess of US$5,000.76 
(iii) Investment incentives77 
43. Registered and authorized national and foreig n investors may seek relief from the standard 
taxation and customs regime by obtaining certificati on for the Code of Fiscal Benefits.  The Code, 
                                                      
68 World Bank (2008). 
69 FIAS (2006). 
70 Law No. 23/2007 1 of August 2007. 
71 UNCTAD (2002);  and World Bank (2006). 
72 Foreign staff may comprise:  (a) 5% of the total number of employees, in large enterprises (with 
more than 100 employees);  (b) 8% of the total number of employees, in medium-sized enterprises (between 11 
and 100 employees);  (c) 10% of the total number of employees, in small enterprises (10 or fewer employees).  
Hiring of foreign staff in excess of these quotas must be approved by the Ministry of Labour, and foreign staff 
may only be employed if there are no Mozambicans qualified for the job, or  if there are not enough with the 
required skills. 
73 Ministerial Diploma No. 123/2006 of 21 June 2006.  
74 Law No. 19/97 of 1 October 1997.   
75 Article 11, Law No. 19/97 of 1 October 1997. 
76 Banco de Moçambique.  Viewed at:  http ://www.sadcbankers.org/SADC/SADC.nsf/LADV/ 
970E66A86150B3D54225726E00492F2D/$File/Mozambique.pdf [21 April 2008]. 
77 Decree No. 16/2002 of 27 June 2002. Mozambique WT/TPR/S/209 
 Page 23 
 
 
adopted in 2002, harmonized the plethora of fiscal benefit regimes, although it applies only to new 
investments, excluding projects in mining and petroleum (Chapter IV(3)).  The sugar sector continues to have its own incentive regime, including exempt ions from customs duties and other taxes collected 
at the border.
78  Separate regulations apply to enterprises establishing under the Industrial Free Zones 
regime (Chapter III(3)(vi)), which includes Mo zambique’s megaprojects, such as MOZAL for 
aluminium and SASOL for gas pipeline transport.  The authorities are examining the operation of 
investment incentives and may revise the Code of Fiscal Benefits and/or the Industrial Free Zones (IFZs) regime. 
44. The Code of Fiscal Benefits offers national a nd foreign investors the same set of generic 
incentives, including:  customs dut y exemptions;  tax credits;  and accelerated depreciation for new 
immovable assets (Table II.2).  Additional benefits  are available to investments in agriculture, 
tourism, and large-scale projects (at least US$500 mi llion), and subject to the creation of employment, 
in Rapid Development Zones (ZRDs) , and IFZs (Chapter III(3)(vi)). 
Table II.2 
Investment incentivesa 
Sector   Type of incentive  
Available to all approved investment projects:  
  
  Exemption from payment of import duties on equipm ent included in class “K” of the Customs Tariff 
Schedule, but only when the goods to be imported ar e either not produced w ithin the territory of 
Mozambique or, if produced, do not satisfy the speci fic purpose or operational characteristics required or 
inherent in the nature of the project and par ticular activity to be developed and carried out; 
Investment tax credit equal to 5% of the total inve stment realized (exceptio ns apply, e.g. passenger 
vehicles), for five years; 
Tax credit for the professional training of Mozambi can workers, up to a maximum of 5% of taxable 
income, for the first five years of operation; Accelerated depreciation for new immovable assets; 
Tax deductible expenditure, 100% in Maputo and 150%  in the provinces, for the construction and 
rehabilitation of roads, railways, airports, mail de livery, telecommunications, water supply, electric 
energy, schools, hospitals, and other works, for 10 years; 
Exemption from stamp tax for the alteration of the sh are capital and the articles of association, for the 
first five years of operation; Reduction of 50% in the rate of the real property transfer tax (SISA) for acquisition of immovable 
property used in industry, agri-industry and hotel indus try, provided the property is acquired within the 
first three years from the date of  authorization of the investment 
Additional benefits to approved investment projects in:  
Advanced technology   Tax credit for investment in advanc ed technology equal to 15% of tota l income, for five fiscal years; 
Tax credit for the professional training of Mozambi can workers, up to a maximum of 10% of taxable 
income, for the first five years of operation  
Agriculture  Until 2012, an 80% reduction in the tax rate appli cable to profits from agricultural ventures   
Hotels and tourism   Investment tax credit equal to 8% of the total invest ment realized, for five ta x years (including passenger 
vehicles) 
Large-scale investment 
projects (> US$500 million 
or investments in public domain infrastructure carried 
out under the regime of a 
concession)b Generally available benefits for 10 years, plus:  Inve stment tax credit of 5-10% of the total investment 
realized (with exceptions, e.g. passenger vehicles), ri sing to 10-15% if located in Gaza, Sofala, Manica, 
Tete, Zambézia and Nampula Provinces, and to 15-30%  if located in Cabo Delgado, Inhambane and 
Niassa Province  
Table II.2 (cont'd) 
                                                      
78 Decree No. 74/99, 12 October 1999. WT/TPR/S/209 Trade Policy Review 
Page 24 
 
 
Sector   Type of incentive  
Rapid Development Zonesc  Investment tax credit of 20% of the total investment  realized (with exceptions, e.g. passenger vehicles), 
for the first five years of operation; 
Exemption from the real property transfer tax (SIS A) for acquisition of immovable property used in 
industry, agri-industry and hotel industry, provided th e property is acquired within the first three years 
from the date the inve stment was authorized.  
a Industrial Free Zones are separately regulated (Chapter III(3)(vi), as well as mining and petroleum (Chapter IV(3)). 
b Investments in agriculture, aquaculture, livestock agriculture and forestry; agro-i ndustry; manufacturing; construction of ra ilway, 
road, port and airport infrastructure and related equipment;  t ourism activities.  The project must create at least 500 jobs or  induce 
the creation of at least 1,000 jobs within three years, and must contribute to the re duction of regional imbalances by choice o f 
location.  Large-scale investment project benefits cannot be cumulated with the additional be nefits for approved investment 
projects in advanced technology, agri culture or in hotels and tourism.  
c Zambezi Valley, Niassa Province, Nacala District, Moçambique  Island and Ibo Island.  Activities in agriculture, forestry, 
aquaculture, livestock raising, lumber production; game anim al exploitation; water supply; electric energy generation, 
transmission, and distribution; telecomm unications; construction of public utility infrastructure ;  housing; agricultural 
infrastructure;  hotels;  tourism-related infrastructure;  infr astructure for commerce;  industry;  cargo and passenger transpo rt; 
education;  health.  
Source:  WTO Secretariat, based on the Englis h translation of Decree No. 16/2002 of 27 June 2002.  View ed at:  http:// 
www.mozbusiness.gov.mz /download.php?view.6 [16 June 2008].  
(iv) Bilateral agreements on investment promotion and protection 
45. Mozambique has concluded 22 agreements for the reciprocal promotion and protection of 
investments, which have been ratified by the Council of Ministers and are in force.79  Mozambique 
has also concluded double taxation treaties with Portugal (1991), Mauritius (1998), Italy (1999), and 
the United Arab Emirates (2004).  The Cotonou ACP- EC Agreement provides for the protection of 
European investments in the ACP countries (Art icles 260, 261 and 262);  investment should in 
principle also be covered by the Economic Partnership Agreement (section (3)(ii)(e)).  
                                                      
79 These agreements are with:  Zimbabwe (1990);  Portugal (1995);  Mauritius (1997);  South Africa 
(1997);  United States (1998);  Italy (1998);  Algeria (1998);  Egypt (1998);  Indonesia (1999);  China (2001);  
Sweden (2001);  Cuba (2001);  Netherlands (2001);  Germany (2002);  Denmark (2002);  France (2002);  
Switzerland (2002);  United Kingdom (2004);  Finland (2 004);  Belgium (2006);  Viet Nam (2007);  and the 
U.S. Overseas Private Inve stment Corporation (1999). Mozambique WT/TPR/S/209 
 Page 25 
 
 
ANNEX II.1:  TRADE-RELATED TECHNICAL ASSISTANCE 
1. Mozambique has enjoyed support from the inte rnational community for the implementation 
of its Action Plan for the Reduction of Absolute P overty (PARPA), in the form of direct budgetary 
assistance, and bilateral and multilateral programmes.1  Under PARPA II, adopted in 2006, the 
Government is committed to attain ing rapid economic growth and furt her reducing poverty.  In the 
context of its second Trade Policy Review (TPR ), Mozambique hopes to mobilize trade-related 
technical assistance to improve its capacity to pa rticipate in the multilateral trading system, thus 
contributing to its economic development. 
2. Since its first TPR, Mozambique has benefite d from a large number of activities to support 
the development of its international trade, undertaken by the WTO and other international 
organizations such as the UNCTAD, ITC, UNDP, the World Bank, and the IMF.  Mozambique participates in the Integrated Framework (IF)
2, and the Joint Integrated Technical Assistance 
Programme (JITAP II)3, joint initiatives of the WTO and part ner international organizations.  In 
addition, Mozambican officials participated in 176 seminars, workshops, cours es, missions, and other 
WTO activities during the review period, and further activities are to be undert aken.  Mozambique has 
also benefited from the establishment of a reference centre on the premises of the Ministry of Industry 
and Commerce.  
3. To further support its participation in the mu ltilateral trading system , Mozambique continues 
to require trade-related technical assistance from the WTO, including on:  the implementation of trade-related agreements;  partic ipation in the regular activities of the WTO;  capacity-building for 
participation in the Doha Round;  formulation of trade policy;  supply-side constraints;  and the 
integration of trade and development policies. 
(1) I
MPLEMENTATION OF AGREEMENTS , TRAINING , AND POLICY FORMULATION  
4. Since its first TPR, Mozambique has made some progress on the implementation of WTO 
rules, notably with respect to customs valuation and trade-relate d aspects of intellectual property 
rights (TRIPS).  Customs officials and economic operators, however, continue to encounter 
difficulties with certain implementation aspects of the Agreement on Customs Valuation;  technical 
assistance in this area is requested.  Mozambique  does not have a regulatory framework for the 
application of anti-dumping or countervailing meas ures;  the authorities consider that capacity- 
building in this area could help to ensure that WT O-consistent policy options are available if the need 
arises.  Other outstanding implementation issues of concern to Mozambique relate to the application 
of WTO rules on sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT).  
Mozambique is also intent upon strengthening its national capacity to comply with the SPS and TBT 
measures applied by trading partners , particularly requirements for its  exports of agricultural products, 
mainly plants, fresh fruits and vegetables, meat, a nd other food products.  In all areas, notifications 
remain a persistent difficulty, as Mozambique has made only one (on implementation of the 
Agreement on Customs Valuation) since its first TPR;  this is considered to be a priority area by the 
authorities.   
5. Mozambique requires technical assistance, in cluding capacity-building, to align certain 
domestic laws with WTO rules.  The highest tariff rates have been reduced.  Estimates of the fiscal 
impact of this reform would help identify other alte rnatives to customs revenue so that tariff rates can 
be further reduced.   
                                                      
1 IMF (2007b). 
2 Integrated framework online information.  Vi ewed at:  http://www.integratedframework.org. 
3 JITAP online information.  Viewed at:  http://www.jitap.org. WT/TPR/S/209 Trade Policy Review 
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6. Mozambique also requires technical assistance to improve its ability to participate in the Doha 
Round.  Mozambique shares many of the negotiating priorities of LDCs, notably the removal of the 
subsidies to key exports, such as sugar or cotton, or with respect to food security.  Furthermore, the 
liberalization of trade in goods and services undertaken  by Mozambique since its  first TPR has yet to 
be reflected in its schedules of goods and servi ces commitments.  The latter, dating from the Uruguay 
Round, are very limited in scope, thus diminishing+ the benefits that Mozambique might realize from 
its binding commitments, particularly attracting inv estors to priority activities such as tourism or 
transportation.  In the context of the greater pa rticipation foreseen in PARPA II, training would be 
useful for the private sector, academics, parliamentaria ns and the media, to explain the benefits of the 
multilateral trading system.  Mozambique also wishes to build capacity in order to participate 
effectively in the dispute settlement  mechanism.  Given that PARPA II foresees wider participation of 
the civil society in policy-making, training for the private sector, academics, parliamentarians, and the media, would be useful.  This would help to incr ease awareness of the obligations and the benefits of 
participation of the multilateral trading system. 
(2) S
UPPLY -SIDE CONSTRAINTS  
7. Supply-side constraints are among the main fa ctors limiting the expansion of Mozambique’s 
trade in goods and services.  The authorities have given attention to the development of a multimodal 
transport infrastructure, through the rehabilitation of  ports, roads, and railroa ds, and its integration 
with that of major trading partners, in particul ar South Africa and the land-locked countries to the 
west, for which its ports are a vital gateway.  S ubstantial investments have been made, involving 
technology transfer and training for Mozambican wo rkers.  Technical assistance could help further 
strengthen those efforts.  In addition, to improve  the operation of the supply chain, operational support 
for customs administration (extension of computer ization, reduction of delays, processing of VAT 
refunds) is also desirable. 
8. Of particular concern for Mozambique’s PARPA II objectives with respect to poverty 
reduction is raising the productivity of the agricultu re sector, improving the integration of rural and 
urban markets, increasing value-added through pro cessing, and expanding the range of high-value 
exports that meet the standards of developed destin ation markets.  Certain agricultural exports already 
meet such standards, notably some fish produc ts to the EC, as well as horticultural products.  
Technical assistance will continue to play a centr al role in enlarging the basket of Mozambican 
exports of agricultural products.  To increase production, Mozambi que relies on imported fertilizers, 
seeds, materials, and equipment.  Tariffs and taxe s play an important role in increasing the costs on 
these items, on top of the substantial costs of shipping , and internal transportation and handling costs.  
Government support for the sector is focussed on exte nsion services, but these have inadequate reach;  
technical assistance could help alleviate this shortc oming.  The extension of microfinance in rural 
areas would support the shift in agricultural activity from subsistence to commercial. 
9. Mozambican enterprises, including those establis hed in export processing zones, experience 
difficulties of access to credit and inputs, including  electricity, water, and telecommunications, and 
also suffer the adverse effects of poor governance.  Skilled labour is also in  shortage.  The efforts 
undertaken by the State remain insufficient.  Fu nding for economic activities by the banking system 
does not appear to be on a sufficiently large scal e to provide support for small and medium-sized 
enterprises planning long-term (high-risk) investments.  Improved supply of, inter alia , transportation 
and telecommunications services, and of energy (ele ctricity in particular) is also desirable. Mozambique WT/TPR/S/209 
 Page 27 
 
 
(3) INTEGRATION OF TRADE IN DEVELOPMENT POLICY  
10. As PARPA II progresses, Mozambique’s ability to integrate in the international market will 
become increasingly important to its development, both in terms of securing vital imports of food and 
inputs, and access for its exports.  PARPA II specifica lly recognizes the need to adapt Mozambique’s 
trade policy strategy to its development policy.  Fo r example, protection applied in order to expand 
production of sugar or local crops is to be balanced against food security goals, as prices of basic 
foods have an impact on poverty.  In addition to th e results of the IF and JITAP II, the outcome of 
Mozambique’s second TPR could be used to better coordinate its objective of integration at the 
regional and multilateral levels.