WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 10 
 
 
II. TRADE AND INVESTMENT REGIMES 
(1) INSTITUTIONAL FRAMEWORK  
1. The Constitution of the Republic of D jibouti was adopted by referendum on 
4 September 1992 and published in the Official Journal  on 15 September 1992.1  It provides for the 
separation of powers, guarantees fundamental rights, recognizes the multiparty system (actually 
introduced in September 2002) and prohibits political parties from being identified with a race, ethnic 
group, gender, religion, sect, language or any ot her element that could serve as a basis for 
discrimination.  The last presidential elections were held in April 2005. 
2. The President of the Republic exercises executiv e power and is elected by direct universal 
suffrage (in a majority secret vote over two rounds), for a term of six years, which may be renewed 
once.2  The President is both the Head of State and Government and the supreme head of the armed 
forces; he signs and ratifies international treati es and agreements.  The Government comprises the 
Prime Minister and ministers.  The Prime Minister is appointed by the President of the Republic.3  
The other members of the Government are also appointed by the President of the Republic on the proposal of the Prime Minister. 
3. Legislative power is exercised by the Parliament (National Assembly), currently comprising 
65 members (including two vice-presidents) elected by direct universal suffrage (in a secret vote) for a (renewable) term of five years.
4  Its president is elected for the parliamentary term by secret vote of 
the members.5  The Constitution specifies that laws  are adopted by simple majority.6  The President of 
the Republic may not dissolve the National Assembly.  As part of the process of obtaining 
information and exercising oversight of Government  action, members of the National Assembly may 
put oral or written questions to the Prime Minister, to which responses are provided either by the Prime Minister in person or through the ministers concerned.  The National Assembly may also set up commissions of enquiry; it may (collectively or individually) put questions to the Government, at the initiative of at least 10 deputies, in order to obtain information on government policy.
7  The National 
Assembly may not adopt a vote of no confidence in the Government, individual members of the 
Government or the President of the Republic, nor  may it formally question the President of the 
Republic. 
4. The Constitution provides that the Judiciary mu st be impartial and independent of the 
Legislative and Executive.  Judicial power is exer cised by the Supreme Court and other courts (the 
High Court of Justice, the Court of Appeal, the Constitutional Council and the Criminal Court) and 
tribunals (the Court of First Instance).  The Supr eme Court is the highest authority for ordinary 
                                                      
1 Law No. 1/AN/92/2èmeL of 15 September 1992, on political parties, and Ordinance No. 92-0102/PRE 
of 15 September 1992.  Available at:  http://www .adi.dj/constitut/constitut_dj.htm [22 October 2004]. 
2 Article 23 of the Constitution. 
3 There are no constitutional provisions obliging the President of the Republic and the Prime Minister 
to be from different parties. 
4 Article 46 of the Constitution and Basic Law No. 5/AN/93/3èmeL on the rules of procedure of the 
National Assembly of 24 May 1993. 
5 If the votes cast during the first round do not yield an absolute majority, a relative majority suffices 
during the second round.  If votes are cast equally for the two candidates, the older one is declared elected. 
6 Laws which the Constitution considers to be basic laws must be adopted by an absolute majority of 
the members of the National Assembly and can only be  enacted after the Constitutional Council has declared 
that they comply with the Constitution. 
7 Article 61 of the Constitution. Djibouti WT/TPR/S/159/Rev.1 
 Page 11 
 
 
jurisdiction in the Republic.8  The Constitutional Council is responsible for ensuring that laws comply 
with the Constitution and for guaranteeing the fundamenta l rights of the individual and civil liberties. 
It is the regulatory authority for the functioni ng of governmental institutions and activities.9  The High 
Court of Justice has authority to judge the President of the Republic and ministers accused by the 
National Assembly.10  As well as the Constitutional Council, ther e are other ordinary law courts, with 
a dual level of jurisdiction, headed by the Supreme C ourt.  Both at the level of first instance and for 
appeals there are specialized chambers (s ocial, criminal, civil and commercial, inter alia ).  For 
appeals, there are also the criminal court (which  rules in the first and last instance) and the 
administrative council, which rules on disputes between the administration and those administered, 
but which acts in appeals before the Supreme Court. 
5. The Constitutional Council regulates the functi oning of governmental institutions and 
activities.  It comprises six members appointed for a non-renewable term of eight years.  It ensures 
respect for constitutional principles, monitors the constitutionality of laws and guarantees the 
fundamental rights of the individual and civil liberties.11 
(2) POLICY FORMULATION AND IMPLEMENTATION  
6. Policies are formulated and implemented by means of laws, decrees, orders or decisions. 
Laws are proposed by the National Assembly, the President of the Republic or the Government.  Each ministry is in principle responsible for formula ting policies within its competence and for preparing 
the relevant draft legislation.  This is done in c onsultation with other ministries that may be concerned 
by the measures under consideration.  All draft laws or decrees are first discussed by the Government 
(in the Council of Ministers) and then put before the National Assembly. 
7. Laws are enacted by the President of the Republic  within 15 days of the Government's receipt 
of the final texts adopted by Parliament.
12  Before enacting them, however, the President may request 
Parliament to give the draft law in question a second reading.  If Parliaments adopts the draft law after 
a second reading, it must then be enacted.13  The Prime Minister and ministers countersign laws in 
their respective spheres of activity.  Laws ente r into effect as of their publication in the Official 
Journal .  The President of the Republic or Parliament  may bring the matter before the Constitutional 
Council if it is considered that a law is contrary  to the Constitution.  Article 80 of the Constitution 
allows any plaintiff to claim that a law is unc onstitutional as an exceptional measure when a case is 
being heard by a court.14 
8. The ministries responsible for foreign trade15 and finance draw up the Government's trade 
policy.  Depending on the subject, they coordinate this policy with other ministries concerned, for 
example, that responsible for agriculture, and other government bodies, namely, the Agence nationale 
de la promotion des investissements  (National Agency for Investment Promotion) (ANPI) and the 
                                                      
8 It is the Court's responsibility to consider appeals made against decisions of any nature taken by the 
lower courts.  The Court also includes an audit and budget regulations chamber. 
9 Article 75 of the Constitution. 
10 Article 84 of the Constitution. 
11 Title VIII of the Constitution and Law No. 4/AN/93/3èmeL of 7 April 1993. 
12 Article 34 of the Constitution. 
13 The President is obliged to enact the law on penalty of proceedings for high treason. 
14 Any provision deemed unconstitutional on the basis of this  Article ceases to be applicable. 
15 The Ministry of Trade, Industry and Handicrafts (MCIA) is regulated by Law No. 102 of 
25 October 2000.  Decree No. 2001-0156/PR and Chapter 3, Title IV, of Law No. 149/AN/02/4èmeL define the 
trade policy responsibilities of the MCIA.  The MCIA is composed of a trade and standardization department 
and an industry and handicrafts department.  In 2000, the Ministry's budget was among the lowest in the Government (13
th out of 16 ministries). WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 12 
 
 
Djibouti Chamber of Commerce.  There is no form al framework for these consultations, which are 
conducted on an ad hoc basis, at the initiative of the public or private sector, including the Djibouti 
Chamber of Commerce, the Committee for Monitoring COMESA Affairs, and the Forum national de 
développement et de la politique commerciale (National Forum for Development and Trade Policy). 
9. International treaties and agreements signed by the Republic of Djibouti must be ratified by 
the National Assembly and published in order to be  incorporated into the internal legal structure.16 
(3) TRADE POLICY OBJECTIVES  
10. As a component of economic policy, the long- term objectives of Djibouti's trade policy are 
the social and economic development of the count ry, and reducing poverty and unemployment.  Their 
achievement requires the following:  control of govern ment finance and more rapid structural reform;  
the establishment of a legal and regulatory framewo rk that encourages private investment;  the 
development of Djibouti as a port of entry for landl ocked countries in the region, particularly within 
the Common Market for Eastern and Southern Africa  (COMESA);  making the port of Djibouti into a 
gateway;  enhancing the economy's competitiveness ;  effective political and economic governance 
and boosting transparency;  development of services (p articularly port services) and human resources;  
and development and promotion of the private sector. 
11. In order to lessen the negative impact of the defective and costly supply of basic services – 
particularly telecommunications, energy and water,  transport and financial services – on Djibouti's 
participation in international trade, the Governme nt intends to move ahead with sectoral reform 
through its privatization programme launched in 2001.17  In addition, the Government has drawn up a 
new Labour Code.  At the time this report was be ing finalized, the Code was being discussed by the 
National Assembly.  A new Commercial Code is also envisaged (section (4) below). 
12. Djibouti considers that the multilateral trading sy stem will help it to achieve its integration 
into the global economy.  It intends to grasp the opportunity afforded by the establishment of the customs union within the COMESA in order to conti nue liberalizing its trade regime and accelerate its 
economic growth.  In the medium term, however, Djibouti's full participation in the COMESA's 
customs union, now planned for 1 January 2009, wi ll require the adoption of the common external 
tariff (CET) as well as the introduction of a value-adde d tax to replace Djibouti's internal consumption 
tax (TIC) (Chapter III(2)(iv)(c)).  Djibouti also inte nds to take advantage of  the benefits under the 
ACP-EU Agreement and the African Growth and O pportunity Act (AGOA) through its efforts to 
promote investment. 
(4) L
AWS AND REGULATIONS  
13. Djibouti's legislation embodies the principle of th e primacy of international legal instruments 
(ratified and published) over internal  legislation.  Consequently, inte rnational treaties or agreements 
properly ratified and published take precedence as of  their publication in the Official Journal .18  
According to the precedence of rules, the Constituti on is followed, in descending order, by basic laws, 
ordinary laws, decrees, and orders. 
14. A committee to review Djibouti's accession to the Treaty on the Harmonization of Business 
Law in Africa (OHADA) was est ablished by Order No. 2001-0799/PR/MCTA and called on the 
competent authorities to choose between Djibouti' s accession to the OHADA and incorporating the 
                                                      
16 Article 63 of the Constitution. 
17 Decree No. 2001-0191/PR/MEFPP of 23 September 2001. 
18 Article 37 of the Constitution. Djibouti WT/TPR/S/159/Rev.1 
 Page 13 
 
 
OHADA's provisions into domestic legislation.  The Government decided to adopt its own 
Commercial Code based on the OHADA's uniform acts , taking into account its geographical situation 
and the fact that it belongs to both the Arab and the African world.  On 2 November 2005, Djibouti signed the act establishing an Association for the Promotion of Arbitration in Africa (APAA), whose 
headquarters will be in Yaoundé, Cameroon.
19 
15. Some current texts on commercial matters  have been updated since independence.20  In 2001, 
a group was set up to consider the modernization of  commercial law, assisted by the UNCTAD, with 
the objective of reforming business law.  The group has undertaken a first analysis of current commercial legislation.  In 2002, a national committe e was also set up to oversee work on drawing up 
a new Commercial Code and to harmonize and upda te the legal texts so as to create a climate 
favourable to investment.
21  At the time this report was being finalized, its work was being compiled 
and analysed;  the main difficulties are of a financial nature. 
16. Customs legislation is composed of a number of texts covering the customs system and its 
various regimes, taxation at the border, including the internal consumption tax, and other taxes, 
surcharges and fees (Chapter III(2)(iv)).  Table A.II.1 shows Djibouti's principal trade-related 
legislation. 
17. According to the Diagnostic Trade Integrati on Study, Djibouti suffers from both an excess 
and a dearth of legislation.  Many texts coexist, are juxtaposed or overlap each other.  Some are obsolete or contradictory, while ot hers have not been the subject of implementing decrees or orders.  
The result is a lack of certainty which promotes ambiguity and the risk of arbitrariness, thus 
contributing to legal insecurity.  Moreover, exis ting regulations are not readily accessible and hence 
little known.  There are the general problem of the effective application of existing texts and the 
problem of the functioning of the justice system as a whole.
22 
(5) TRADE AGREEMENTS AND ARRANGEMENTS  
18. The Republic of Djibouti is a member of the WTO, the United Nations Organization and its 
agencies, the World Bank group and the Internati onal Monetary Fund.  It has signed the Cotonou 
Agreement between the European Union and the ACP countries and belongs to the African Union 
(formerly the Organization of African Unity) and the COMESA. 
19. At July 2005, the Republic of Djibouti had not been involved in any dispute settlement 
procedure at the multilateral, regional or bilateral levels. 
(i) World Trade Organization 
20. The Republic of Djibouti has been an original  member of the WTO since 31 May 1995.  It 
became a Contracting Party to the GATT on 16 December 1994, after having applied it de facto  since 
18 November 1960.23  As a least developed country (LDC),  Djibouti benefits from a special and 
                                                      
19 The other signatories are:  Angola, Benin, Burkina Faso, Cameroon, Democratic Republic of Congo, 
Mali and Mauritius. 
20 Laws No. 191/AN/86 of 3 February 1986 on trading companies and No. 56/AN/94/3èmeL of 
18 October 1994 establishing certain measures to fac ilitate the creation of enterprises and companies, and 
Ordinance No. 88/87/PR of 13 November 1988. 
21 Orders No. 2002-0485/PR/MCIA of 9 July 2002 and No. 2001-0799/PR/MCIA of 20 October 2001, 
respectively. 
22 Integrated Framework (2004). 
23 Document GATT LET/7609 of 21 December 1994. WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 14 
 
 
differential treatment regime that is broader than that granted to developing countries.  This means 
that, under certain agreements, it is given longer tr ansitional periods and less stringent obligations.  
Nevertheless, problems caused by lack of capacity  have delayed Djibouti's implementation of the 
WTO Agreements and mean that it has not been ab le to take full advantage of the opportunities 
afforded by the multilateral trading system.  Its t echnical assistance needs, including for the purposes 
of implementation, are set out in detail in section (7) below. 
21. At the time this report was being finalized , the Republic of Djibouti had not made any 
notification to the GATT/WTO with the exception of that on enquiry points (Annex B, paragraph 3) 
and the national notification authority (Annex B, paragraph  10) under the Agreement on the 
Application of Sanitary and Phytosanitary Measures.24  It has not signed any of the WTO's plurilateral 
agreements and is not an observer at any of these agreements. 
22. At the ministerial conference in Cancún, African countries (including Djibouti), through the 
Republic of Mauritius, underlined the importance of  pursuing efforts to reform the international 
agricultural market, particularly by reducing obs tacles to market access, phasing out domestic support 
and eliminating export subsidies by industrialized countries.25 
(ii) Regional agreements 
(a) Common Market for Eastern and Southern Africa (COMESA)26 
23. COMESA's programme is to br oaden and expand the integrati on process in member countries 
by adopting general measures to liberalize trade, fo r example, the abolition of all tariff and non-tariff 
barriers and the adoption of a common external ta riff; free movement of capital, labour and goods, 
and the right of establishment in the region;  the adoption of a common set of standards, technical 
regulations, quality control procedures, certific ation systems, and sanitary and phytosanitary 
regulations;  tax harmonization (including VAT and excise duties), and provisions on industrial 
cooperation, particularly as regards company la w, intellectual property and investment;  the 
application of a harmonized competition policy;  and the establishment of a monetary union.27  The 
COMESA has been notified to the WTO under the enabling clause.28 
24. The COMESA should therefore lead to a customs and monetary union.  Its free-trade area 
(FTA) was set up on 1 November 2000; at present, it has 11 member countries.29  The customs union 
should have come into effect at the end of 2004 with a common external  tariff (CET) to be negotiated.  
The CET may comprise four rates, 0, 5, 15 and 30 per cent (applying respectively to capital goods, 
raw materials, intermediate goods and finished goods)  or three rates, 0, 10 and 25 per cent.  The 
member countries have adopted a common nomenclature based on the 2002 harmonized system (HS) 
                                                      
24 WTO document G/L/223/Rev.12 of 3 March 2005. 
25 Statement by the Minister for Industry and International Trade of the Republic of Mauritius, on 
behalf of the African Union, Fifth Ministerial Conference, Cancún, 10-14 September 2003.  WTO document 
WT/MIN(03)/ST/69 of 12 September 2003. 
26 The Preferential Trade Area for Eastern and Sout hern African States became the COMESA at the 
end of 1994.  In addition to the Republic of Djibouti, the other members of the COMESA are:  Angola, Burundi, Comoros, Democratic Republic of the Congo, Egypt, Er itrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, 
Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.  Lesotho, Mozambique and 
the United Republic of Tanzania have withdrawn. 
27 For more information, see http://www.comesa.int/about/ [23 February 2005].  
28 WTO document WT/COMTD/N/3 of 29 June 1995. 
29 The nine members who have complied with the initial timetable are Djibouti, Egypt, Kenya, 
Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe.  Burundi and Rwanda joined in 2004.  Goods transactions among members of the COMESA's FTA are duty free, without exception. Djibouti WT/TPR/S/159/Rev.1 
 Page 15 
 
 
for the COMESA's CET.  The introduction of the C ET and the movement from  the TIC to a value- 
added tax (VAT) should isolate Djibouti even more from extra-COMESA trade by tightening 
protection against the products concerned, taking in to account its relatively liberal trade regime at 
present. 
25. The COMESA's rules of origin are based on four  exclusive criteria: the goods must be wholly 
produced in the region, without any raw materials of  foreign origin;  or the imported content of goods 
must not exceed 60 per cent of the c.i.f. value of all the materials used in production;  or the ex-
factory value added must account for at least 35 per cent of the price of the finished good30;  or the 
value added must be at least 25 per cent if the fini shed good is deemed "particularly important" for the 
development of a member State (in accordance with a predefined list of products);  or the processing 
implies a change in the tariff heading. 
26. The COMESA is about to introduce its compe tition policy, which will be applied as soon as 
its provisions have been adopted by the Council of Ministers.  The preliminary draft of these 
provisions prohibits, inter alia , restrictive trade practices, abuse of a dominant position, price 
understandings, concerted bids and leading bids, agre ements on dividing up markets or clients, sales 
and production quotas, collective action to impose an  arrangement, concerted refusal to buy or sell 
products and services from a seller or to a potential  buyer, and collective refusal of access to an 
arrangement or association essential for competition.   The preliminary draft also provides for 
monitoring of mergers and take-overs, which will be subject to a notification obligation above a 
certain threshold (to be defined) of annual tur nover or assets in the region.  A competition commission 
will be set up and may on its own initiative decide to  examine a case or be requested to do so by any 
person or consumers' organization. 
27. The monetary harmonization programme will be  implemented in four stages from 1992 to 
2025.  The last stage should result in a proper m onetary union, in which there will either be a 
permanently fixed exchange rate or a single curre ncy; the full harmonization of the member States' 
economic, budgetary and monetary policies;  full inte gration of the financial structure, pooling of 
exchange reserves; and the establishment of a si ngle monetary authority.  In May 1999, this 
programme was boosted by the introduction of limited convertibility of currency among member 
States that have important cross-border trade.  A coordination body composed of experts from central 
banks and ministries of finance in the region has been  set up in order to oversee the application of the 
measures and to ensure that the harmonization process makes progress towards monetary union. 
28. Several institutions have been set up to fac ilitate the development of COMESA's members.  
The Trade and Development Bank for Eastern and Sout hern Africa (PTA Bank) finances foreign trade 
transactions and projects by public or private invest ors resident in one of the member States.  By 
November 2005, Djibouti had not yet received an y financing from the PTA Bank.  The COMESA 
clearing house has become less important following th e liberalization of the exchange regime in the 
majority of member countries.  Its role has changed and now it focuses mainly on enhancing the 
efficiency of clearing operations in order to s upplement the services provided by commercial banks;  
give business persons a form of in surance against political risks in in traregional trade;  and facilitate 
harmonization of monetary and budge tary policies within the region. 
29. The PTA reinsurance company (PTA-RE) helps to  promote insurance and reinsurance in the 
region.  The Republic of Djibouti signed the Ag reement establishing the PTA-RE, in which the 
                                                      
30 "Value added" is defined as being the difference between the ex-factory pri ce of finished goods and 
the c.i.f. value of the inputs impor ted from countries that are not me mbers of the COMESA.  The minimum 
level of value added was brought down from 45 to 35 per cent in 2000.  Egypt and Uganda, however, continue to apply the 45 per cent threshold. WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 16 
 
 
Government of Djibouti is a shareholder through th e Ministry of Economy, Finance and Planning.  
The African Trade Insurance Ag ency (ATIA) was set up in A ugust 2001 to boost investors' 
confidence by providing them with cover against po litical risks.  The ATIA is a COMESA creation, 
but all member States of the African Union (AU)  may belong to it.  In addition, the COMESA 
tribunal started to operate in 1998.  It is res ponsible for resolving any issues brought before it under 
the Treaty.  According to the authorities, Djibouti has not been involved in any official dispute coming within the competence of the COMESA tribunal. 
30. The Protocol on the free movement of persons is  to be implemented in several stages.  The 
first stage is to abolish obligatory visas, which w as to enter into force in 2000; the majority of 
countries, including Djibouti, no longer require citiz ens of other COMESA countries to possess a visa.  
The COMESA measures to facilitate movement of persons and transit of goods are particularly 
important for Djibouti because of its situation as a port  of transit for Ethiopia.  Nevertheless, Djibouti 
has not yet signed the Protocol. 
31. On 29 October 2001, an agreement on trade an d investment arrangements was concluded 
between COMESA and the United States ("AGOA Linka ge in COMESA" (ALINC)).  This agreement 
established a formal mechanism for regular cons ultation between the two parties on trade and 
investment.
31 
(b) African Union (AU) and the African Economic Community (AEC) 
32. The African Union came into being on 8 July 2002 as the successor to the Organization of 
African Unity (OAU).32  The OAU Treaty had been signed by 30 African countries on 25 May 1963.  
The objective of the 1991 Treaty of Abuja (Nigeria ) is to establish an African economic community, 
but this is not yet in operation. 
(c) Intergovernmental Authority on Development (IGAD) 
33. Formerly known as the Intergovernmental Authority for Drought and Development 
(IGADD)33, the IGAD was set up in January 1986 by seven east African countries:  Djibouti, 
Ethiopia, Eritrea, Kenya, Somalia, Sudan and Ug anda.  Its initial aim was to combat drought and 
desertification.  In March 1996, at a summit held  in Nairobi, the IGAD adopted a new charter to 
revive and expand its mandate to include new pr iority areas such as economic cooperation, conflict 
prevention, and the resolution and management of humanitarian affairs.  The IGAD was officially 
recognized by the former Organization of African  Unity (now the African Union) as a regional 
economic organization in June 1997 and started to focus its efforts increasingly on economic 
integration.34 
(iii) Bilateral agreements and arrangements 
34. The Republic of Djibouti has signed bilateral trad e agreements to facilitate the movement of 
goods and persons with Burundi (1984), Ethiopi a (1979), Rwanda (1980) , Senegal (1986) and 
Tunisia (2002).  It has also signed trade agreements with Eritrea, Kenya and Uganda, but these have 
                                                      
31 Assistance programme introduced to accelerate pr ocedures for exports by companies in COMESA 
countries to American importers. 
32 All African countries, with the exce ption of Morocco, belong to the AU. 
33 In March 1996, at a summit in Nairobi, the IG ADD was renamed the Intergovernmental Authority on 
Development (IGAD). 
34 For further details, see:  http://www.igad.org/ [24 February 2005]. Djibouti WT/TPR/S/159/Rev.1 
 Page 17 
 
 
not yet been ratified.  Framework agreements ha ve been signed with Indonesia (1997), Iran (1998), 
the Republic of Korea (1979), Pakistan (1979) and Senegal (1986). 
(iv) Other agreements and arrangements 
(a) The Cotonou Agreement and the "Everything But Arms" Initiative 
35. The Republic of Djibouti has signed the Cot onou Agreement (which replaced the Lomé 
Convention) between the EU and 77 African, Ca ribbean and Pacific countries (ACP).  This 
Agreement renews the majority of the non-recipro cal trade preferences which the EU already granted 
to the ACP countries.  At the Doha Ministerial Conference, the WTO Members granted the waiver 
requested by the parties to the Cotonou Agreem ent from commitments under Article I.1 of the 
GATT 1994 (MFN treatment) until 31 December 2007.  Be fore then, the parties should conclude new 
trade arrangements that are in compliance with the WTO Agreements.  This should lead to the gradual 
elimination of barriers to trade among the parties an d strengthen their cooperati on in all trade-related 
areas, particularly through the establishment of a fre e-trade area within a period of 12 years (i.e., by 
2020). 
36. In September 2002, the EU initiated negotiations  with the ACP countries with a view to 
concluding bilateral partnership agreements or with various regional groups for the purpose of 
regional economic partnershi p agreements, which should come into  effect by January 2008 at the 
latest.  These agreements will be based on reciprocal  liberalization so that, in principle, the Republic 
of Djibouti, like the other ACP countries, shoul d gradually grant preferential access for the EU's 
exports.  Nevertheless, a special clause in the Co tonou Agreement gives LDCs the right not to enter 
into a reciprocal partnership agreement, in whic h case, the LDCs in question would continue to 
receive the preferences granted by the EU under the "Everything But Arms" initiative.  This initiative was launched in March 2001 and grants duty-free access and quotas for all products imported by the 
EU from LDCs with the exception of arms.  A ti metable has been set for applying preferential 
treatment to sugar, rice and fresh bananas.
35 
(b) African Growth and Economic Opportunity Act (AGOA)36 
37. The AGOA extends broader preferential access to the United States market to sub-Saharan 
African countries which meet certain eligibility criteria.37  At present, 37 African countries are 
eligible.  The Republic of Djibouti became elig ible for the general benefits under the AGOA on 
2 October 2000, but not yet for the specific benef its for textiles and clothi ng.  Djibouti's duty-free 
exports to the United States were estimated at US$63,000 in 2004 (US$27,000 in 2003), i.e. 7 per cent 
of Djibouti's total exports to the United States.  This percentage reflects, in particular, the low level of 
national production.38 
                                                      
35 WTO (2002). 
36 For further details, see:  http://w ww.agoa.gov/ [24 February 2005]. 
37 In order to benefit from the AGOA, a country must make progress towards a market economy;  a 
multiparty political system and the rule of law; the elimin ation of discriminatory barriers to trade and investment 
by the United States;  the protection of intellectual prop erty; combating corruption;  protection of human rights 
and labour standards;  and the abolition of certain forms of child labour.  Since 1 January 2005, Côte d'Ivoire 
has no longer been eligible. 
38 Office of the United States Trade Represen tative (2005). WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 18 
 
 
(c) Generalized System of Preferences (GSP) a nd Global System of Trade Preferences (GSTP) 
38. The Republic of Djibouti receives GSP treatment from industrialized countries.  It has not 
acceded to the GSTP Agreement among developing countries.39 
(6) INVESTMENT REGIME  
39. In general, Law No. 88/AN/84/1èreL of 13 February 1984, as amended by 
Law No. 58/AN/94/3èmeL of 18 October 1994, governs investment in Djibouti.  It contains a number 
of measures to boost investment and establishes a Commission nationale des investissements 
(National Investment Commission).40  According to the Investment C ode, foreigners can, in general, 
invest in all activities in the Republic of Djibou ti and receive national treatment.  Nevertheless, 
maritime and transit activities41, fishing and retail trade, tele communications, electricity, water, 
regular mail services and salt are reserved for nationa l investors.  In add ition, farmland cannot be 
purchased by foreigners;  it may, however, be ceded for 99 years. 
40. The law provides for two separate regimes depe nding on the amount of the investment project 
(Table II.1).  Regime A gives tax benefits in the form of exemptions or abatements for 12 categories 
of economic, industrial or commercial activity invo lving minimum investment of DF 5 million and 
creating a minimum of 15 permanent jobs within  a period of 18 months.  Regime B concerns 
enterprises of special economic or social interest with minimum investment of DF 50 million and creating a minimum of 30 permanent jobs within  a period of 18 months.  Between 2000 and 2003, 
there were 26 approvals under Regime B and five under Regime A for investment of 
US$173.2 million and US$934.3 thousand, respec tively, divided among the following sectors: 
transport (68.7 per cent), industry (29.1 per cent) an d tourism (1 per cent).  In 2004, there were four 
approvals under Regime B for a total investment  of US$12.9 million and five under Regime A for a 
total investment of US$841.5 thousand. 
Table II.1 
Criteria and benefits under the Investment Code, 2005 
Regime Activity Benefits 
A (i) Exploitation, preparation or processing of 
products of plant or animal  origin, irrespective of 
their source; 
(ii) Offshore fishing, a nd the preparation, freezing, 
processing or storage of fish products; 
(iii) Mining, treatment or  processing of mining or 
metal products, irrespective of whether they are 
mined in Djibouti or not;   
Table II.1 (cont'd) 
                                                      
39 The purpose of the Agreement setting up the GSTP is to promote and develop reciprocal trade and 
economic cooperation among developing countries through the exchange of concessions in conformity with its provisions.  It provides for the negotiation of tariff  preferences among the parties and the possibility of 
negotiating non-tariff preferences (http://www .g77.org/gstp/ [24 February 2005]). 
40 Law No. 58/AN/94/3èmeL of 18 October 1994 establishing certain investment promotion measures 
and a national investment commission.  It amended Law No. 88/AN/84/1èreL of 13 February 1984 establishing 
the Investment Code.  It is currently being revised in order to take into account the new customs provisions. 
41 For these two activities, a foreign investor must have a Djiboutian partner, who must own the 
majority of the company's capital. Djibouti WT/TPR/S/159/Rev.1 
 Page 19 
 
 
Regime Activity Benefits 
 (iv) Prospection, exploitation, storage of any source of 
energy, and refining of hydrocarbons; 
(v) Creation, operation of establishments responsible 
for developing tourism and handicrafts; Exemption from the business licence contribution during the year 
in which the facilities start up or  the activity is launched and for 
the following five years, but payment of the business licence fee, 
except on imports required for the investment that are exempt. 
 (vi) Creation, exploitation of electricity, electronics, 
chemicals and ship industries; 
(vii) Land, maritime or air transport; 
(viii) Port and airport activities; 
(ix) Building, repair and maintenance of maritime 
transport or fisheries vessels; 
(x) Manufacture, packaging on the spot of consumer 
products or goods; Exemption from the internal c onsumption tax (TIC) and import 
taxes and surcharges on materials and equipment needed to carry out the investment programme a nd appearing on the quantitative 
and qualitative list attached to the approval decree, with the 
exception of petroleum products, spare parts and passenger vehicles.  Raw materials, with the exception of petroleum 
products, imported and actually used during the first five years of 
manufacturing, are exempt from the TIC. 
 (xi) Banking or loan activities likely to promote new 
investment, as well as warrantage activities 
(credit, warehousing); Materials and equipment exempted may not be transferred, sold, 
loaned or utilized for purposes other than those covered by the 
approval decree for a period of 10 years. 
 (xii) Consultancy, engineering activities, computer 
data processing, database computer servers.  
B (i) Construction of buildings exclusively for 
industrial, commercial or tourism use; 
(ii) Construction of social housing;  
(iii) Construction, creation and operation of teaching 
and training facilities. Exemption from the business licence contribution during the year 
in which the facilities start up or  the activity is launched and for 
the following 10 years, but payment of the business licence fee, 
except on imports required for the investment that are exempt. 
Exemption from the internal c onsumption tax (TIC) and import 
taxes and surcharges on materials and equipment needed to carry 
out the investment programme a nd appearing on the quantitative 
and qualitative list attached to the approval decree, with the 
exception of petroleum products, spare parts and passenger 
vehicles.  Raw materials, with the exception of petroleum 
products, imported and actually used during the first 10 years of manufacturing, are exempt from the TIC. 
Exemption from land tax on buildin gs (for building construction) 
for a period of 10 years as of the year following the completion of the work. 
Exemption from industrial and commercial profits and tax on the 
profits of legal persons within the limit of a maximum of 10 years as of the start-up date. 
Exemption from the graduate d duty on registration of acts 
attesting to the establishmen t of companies with capital 
investment of DF 30 million or more.  The same exemption may 
apply to capital increases of DF 10 million or more within at least 
five years after approval or after a previous increase exempted for 
the same reason.  Possibility of partial exemption from duties on 
taking out or termin ating mortgages. 
Registration and land registry duties may be halved when they 
apply to the purchase of green-fie ld sites or land with buildings 
intended for demolition within a period of three months in order 
to carry out the investment approved. 
  Authorization for tempor ary occupation and provisional 
concessions in the private domain related to the investment may 
be given at reduced cost. 
Possibility of exemption from the building permit tax. Materials and equipment exempted may not be transferred, sold, 
loaned, or utilized for purposes ot her than those covered by the 
approval decree for a period of 10 years. 
Source:  Law No. 58/AN/94/3èmeL of 18 October 1994 establishing the Inve stment Code and Ar ticle 28.15.31 of 
Law No. 108/AN/00/4èmeL of 29 October 2000 on reforming the General Tax Code. WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 20 
 
 
41. Applications for approval under the Investment Code must be sent to the ANPI, set up in 
2001 and operating since 200242;  the Centre de formalités unique des enterprises (Single Enterprise 
Formality Centre) (single window), set up under Law No. 114/AN/01/4èmeL is not yet operating.  
Approval procedures under Regime A ta ke between three to seven days if the application file is 
complete; approval is given by the ANPI.  The Co uncil of Ministers gives approval under Regime B 
after the ANPI has examined the application.   Because of the time taken for procedures under 
Regime B (three months to one year), a provisional approval attestation is given by the ANPI to allow 
the investor to take advantage of the benefits as soon as possible. 
42. The procedure for granting benefits under the Investment Code has been criticized on many 
occasions.43  The time actually taken for acceptance or approval appears much longer than that laid 
down in the regulations.44  The approval procedure under Regime B most often requires an 
endorsement or authorization from one or more mini stries or even from the Office of the President of 
the Republic.  Reasons for rejection of the applica tion may not be given and the beneficiaries do not 
always receive all the benefits normally owing to th em.  Some activities are not eligible, for example, 
those relating to livestock (reactivation of the tr ansit of livestock through the region), which the 
Poverty Reduction Strate gy Paper (PRSP) views as a source of job creation.  The ANPI has recently 
prepared an investor's guide outlining administrative procedures.45 
43. In cases of partial or total, temporary or perm anent expropriation, the Code provides for "fair" 
compensation for the prejudice suffered.  It also guarantees fair compensation for injury caused by 
popular movements.  It provides means of settling disputes between investors and the State of 
Djibouti through the competent national courts, in c onformity with the international conventions or 
agreements to which Djibouti is party. 
44. Djibouti has not signed the Convention on the Settlement of Investment Disputes between 
States and Nationals of other States (ICSID). 
45. Djibouti has concluded agreements on protec ting investment with the Organization of 
Petroleum-Exporting Countries (OPEC) and on avoi ding double taxation with China (2004) and 
Egypt (1998).46  The agreements with Malaysia, Switzerla nd and Yemen have not yet been ratified. 
The provisions in the AGOA, the Cotonou and COMESA  Agreements also relate to investment.  
Djibouti is a member of the African Trade Insura nce Agency (ATIA) and has ratified the Agreement 
establishing the Islamic Corporation for the Insura nce of Investment and Export Credit (ICIEC).47 
46. Up until May 2004, Djibouti had a scheme for a free zone regime that was both diversified 
and complex (Table II.2), comprising many different  institutional arrangements, some of which have 
remained at the project stage while others have b een established in the form of documents but do not 
                                                      
42 Law No. 114/AN/01/4èmeL of 21 January 2001 establishing the ANPI.  The ANPI's task is:  (i) to 
implement government policy in the areas of development and investment promotion;  (ii) to establish institutions and/or bodies able to facilitate the mechanisms needed to enhance the general framework for 
promotion of private investment;  and (iii) to undertake any action to promote investment deemed timely or 
profitable. 
43 Integrated Framework (2004). 
44 For Regime A, the CNI has a maximum of one month (from the date of filing the declaration or, 
where appropriate, of the last component of the application file) in which to request further information or raise 
objections.  After this deadline, the investment is registered.  For Regime B, the CNI has a maximum period of 
two months (from the date of filing the declaration) in wh ich to request further information or raise objections.  
After this deadline, the investment is approved. 
45 Information available at:  http://www.djiboutinvest.dj/ [22 September 2005]. 
46 Laws No. 72/AN/04/5èmeL of 3 July 2004 and No. 57/AN/99/4èmeL of 17 October 1999, respectively. 
47 Laws No. 70/AN/04/5èmeL and No. 71/AN/04/5èmeL of 3 July 2004, respectively. Djibouti WT/TPR/S/159/Rev.1 
 Page 21 
 
 
appear to have had any concrete  economic impact.  The growing complexity of the free-zone scheme 
is a source of inconsistency, overlapping and, in some respects, deficiencies.48 
Table II.2 
Free zone regimes, May 2004  
Regime and date of creation Comments Benefits 
Commercial free zone (1971) Situated within the port. 
It is managed by the Djebel Free Zone Authority of Dubai. 
Processing of products is authorized. Establishment of the Djibouti Free Zone Authority in 2002; it 
is to be the single window for formalities for enterprises set 
up in this zone. Exemption from indirect taxes, including 
the TIC. 
Port extension zone (1980) Zone also covered by the free zone regime.  The port 
authorities are responsible for managing this zone.  
Free zone limited  companies 
(SAZF) (1980) These may be set up by any natural or legal person for a 
maximum of 99 years.  Their headquarters must be located within the Djibouti Free Zone and they can be established 
without capital.  
Extension of the port free zone 
(2000) Djibouti Dry Port (DDP). 
Enclosed space of 40 hectares separate from the customs 
regime and operated by the Port of Djibouti.  
Duty-free enterprises (1994) Export-oriented indus trial or services enterprises are eligible. 
Duty-free enterprises fall under Regime B of the Investment 
Code. 
To date, no enterprise has been created under this regime.  
Industrial free zone (1994) Enterprises exclus ively engaged in export in the industrial 
sector are eligible.  Approva l must be obtained from the 
Commission de la zone franche (Free Zone Commission), 
which transmits the application to the Commission 
consultative du régime de zone franche industrielle 
(Industrial Free Zone Advisory Commission) for review. In 1996, the Agence de promotion industrielle (Industrial 
Promotion Agency) (API) was esta blished.  Its task is to 
promote exports and provide i nvestors with assistance by 
acting as a single window for administrative formalities. 
To date, no enterprise has been created under this regime and 
the API remains a virtual ins titution.  In 2001, its activities 
were taken over by the ANPI. 
 Total exemption from profits tax or, 
where appropriate, turnover tax during 
the first 10 years of operation.  As of the 11th year and throughout the life of the 
company, profits tax is 10 per cent. 
Dividends distributed to shareholders will be tax exempt. 
Total exemption from registration fees. 
Total exemption from land tax during the 
first 20 years of operation. 
Total exemption from payment of 
business licences and importers' licences.Exemption from TIC for imports of raw 
materials, fittings and capital goods included in the list attached to the free 
enterprise certificate. 
Exports are exempt from all current or future direct or indirect taxes. 
Exemption from taxes on loans from 
financial institutions in Djibouti. 
Airport free zone A preliminary study was conducted in 1985.  
Source : Information provided by the Djiboutian authorities. 
47. It would appear that the Djibouti port free zone has never fully played the role assigned to it.49  
It apparently serves solely as an in-bond ware house for Djiboutian and foreign companies and 
merchants supplying neighbouring countries.  It ha s not managed to attract  trading companies and 
services active at the regional level.   The main reasons given are, inter alia :  (i) its relatively small 
size and quick saturation;  (ii) the high cost of production factors;  (iii) the rigidity of the Labour 
Code;  (iv) the unreliable nature of the legal sy stem;  (v) economic slowdown and instability in the 
subregion;  and (vi) the requirement to be physi cally located within the free zone, which does not yet 
have the necessary infrastructure.  Moreover, the fre e enterprise and industria l free zone regimes have 
never come into effect.  The main reasons given are:  (i) labour costs and productivity;  (ii) the lack of 
                                                      
48 Integrated Framework (2004). 
49 Integrated Framework (2004). WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 22 
 
 
natural resources;  (iii) water supply and electri c power (high cost and no long-term guarantees);  
(iv) inadequate benefits specific to the regime;  (v) lack of coordination between the Government and 
the private sector;  (vi) the lack of an industria l tradition;  and (vii) the considerable size of the 
economic and financial risk, taking into account the limited size of the local market, the cost of credit 
and legal and judicial instability/insecurity. 
48. In May 2004, a new law repealed and un ified the former texts in a single law.50  According to 
this law, all industrial, commercial and financia l activities or approved services may be carried on 
within the Djibouti free zone (DZF), which came into operation in October 2004.  Investors in free zones are exempt from customs rules and formalities for imports and exports.  They are also exempt 
from the TIC, taxes, surcharges and other direct and indirect taxes, and have the advantage of a zone 
equipped with services and simplified installation procedures.  The new law guarantees investors freedom to transfer capital abro ad and outside the free zone.
51  Goods produced in  the free zone must 
be sold in Djiboutian customs territory through a lo cal importer and may not be sold directly by the 
free zone enterprise itself. 
49. The Autorité des ports et des zones franches de Djibouti (Djibouti Port and Free Zone 
Authority) is responsible for managing and supe rvising the free zone;  it is the single window for 
formalities for enterprises and operators.  It is the only body empowered:  (i)  to receive and approve 
applications for approval by enterprises for operations in the free zone;  and (ii)  to record and issue 
registration documents and issue certificates of orig in for producers in the free zone.  It may:  issue 
rules and regulations;  set the rates for the app licable fees, fines and penalties and invoice them. 
50. The DZF covers an area of 17 hectares.  The first "operating phase", already completed, 
consisted of building hangars with offi ces and building sites of up to 10,000 m2.  The second phase is 
under way.53  In October 2005, 16 foreign companies and nine Djiboutian companies had been set up 
in the DZF. 
(7) TRADE -RELATED TECHNICAL ASSISTANCE  
51. According to the authorities, technical assi stance is primarily needed for a better 
understanding of the various WTO Agreements so as to improve their implementation;  building 
negotiating capacity is another objective.  For the moment, lack of the rele vant knowledge and of 
financial and human resources still prevents Djibouti fr om benefiting to the full from its participation 
in the multilateral trading system.  It intends to  establish a national committee for the purpose of 
coordinating WTO activities (at the national level) and ensuring implementation of the Agreements. 
52. In 1998, a WTO reference centre was set up and this was modernized in January 2003.  In 
December 2004 and February 2005, the WTO sent missi ons to initiate the review of Djibouti's trade 
policy; a national seminar on trade policy and anot her on the economic framework of the trade policy 
review mechanism were conducted by the WTO in D jibouti for this purpose.  Djibouti is one of the 
                                                      
50 Laws No. 53/AN/04/5èmeL of 17 May 2004 and No. 103/AN/05/5èmeL of 10 April 2005 on free zone 
trading companies. 
51 For a period of up to 50 years as of  the start-up date of the enterprise. 
 52 Jebel Ali Free Zone International, as a promoter , is responsible, on behalf of the Authority, for 
applying the law on the free zone. 
53 The DZF is 560 kilometres from Addis Ababa and 620 kilometres from Asmara. Djibouti WT/TPR/S/159/Rev.1 
 Page 23 
 
 
LDCs for which the revised Integrated Framework (see below) for technical assistance and capacity 
building was initiated in 2001.54 
53. Djibouti's trade-related technical assistance needs cover several areas, namely:  
implementation of trade-related agre ements;  participation in trade ne gotiations;  formulation of trade 
policies;  the scope and full exploitation of special an d differential treatment;  supply-side constraints;  
the integration of trade and development policies;  and preparations for the future COMESA customs 
union. 
(i) Implementation of agreements, training , policy formulation, and negotiations 
54. Djibouti's technical assistance needs relate to the harmonization of its laws and regulations 
with the principles and rules of the WTO and the COMESA;  notifications;  training of personnel and 
establishment of the necessary institutio nal structures;  and/or policy formulation so as to increase the 
benefits and minimize the potential costs re lated to application of the agreements. 
55. In the area of customs valuation, Djibouti was given a five-year waiver, allowing it to 
postpone the implementation of the provisi ons of the relevant WTO Agreement until 
22 February 2001.  Implementation of this Agreement is one of Djibouti's major concerns.  It has to 
be seen within the broader context of reform of the customs system and the future common external 
tariff (CET) of the COMESA. 
56. Another issue that is of concern to the aut horities is standards and technical regulations, 
sanitary and phytosanitary measures.  The quality c ontrol and standards service of the Ministry of 
Trade, Industry and Handicrafts, set up in October 2 000 but not yet fully operational, is in need of 
support to draw up and adopt national standards, diss eminate the pertinent information, and organize a 
quality control system to give its exports easier acce ss to regional and international markets.  Djibouti 
also needs assistance to set up the following: a central laboratory for testing and analysis, including 
quality control of foodstuffs;  a metrology laborato ry; and an information network on industrial and 
commercial know-how.  The UNIDO integrated coopera tion programme is helping to renovate the 
fishing port in Djibouti. 
57. Since Djibouti became a member of the WTO, it has not taken an active part in multilateral 
negotiations.  The large number of negotiations – such as those of Doha, the COMESA or the EU 
under the Cotonou Agreement – with different scopes,  timetables and procedures, puts strong pressure 
on Djibouti's trade-policy formulation capacity.  In this connection, immediate technical assistance 
needs relate to the following:  (i) identification of sectors and issues of importance to Djibouti;  
(ii) training in negotiating techniques;  and (iii) iden tification of the reforms to be adopted in order to 
implement the outcome of the negotiations. 
58. The authorities have expressed the wish to recei ve technical assistance in order to introduce a 
commercial code and special legislation on comp etition and consumer protection, contingency 
measures (antidumping, countervailing and safe guard measures), sanitary and phytosanitary 
                                                      
54 The Integrated Framework was launched in 1996.  Its implementation was revised in 2002 and it was 
decided to extend it gradually to LDCs that met certain criteria.  These criteria are, inter alia :  (i) demonstration 
of a firm commitment on the part of the government to integrate trade into the national development strategy 
and the Poverty Reduction Strategy Paper (PRSP);  (ii) the country must be at least at  the preparatory stage of 
the PRSP and meetings of the World Bank's advisory  group or UNDP round tables;  and (iii) possess a 
favourable operational framework (for example, level of infrastructure, presence of na tional offices of the World 
Bank, the IMF and UNDP in the count ry, favourable reaction by donors in relation to  the pace of internal 
reform). WT/TPR/S/159/Rev.1 Trade Policy Review 
Page 24 
 
 
measures, and quality standards.  Djibouti is revi sing its Investment and Labour Codes.  Technical 
assistance needs in these areas relate primarily to training of personnel responsible for implementing 
the new laws and ensuring their observance. 
59. As far as the multilateral negotiations on trad e in services are concerned, Djibouti needs 
technical assistance on how to struct ure its specific commitments.  This should not only be directed at 
negotiators but also at officials in the ministries responsible for formulating sectoral policies in the 
area of services. 
(ii) Supply-side constraints 
60. Supply-side constraints are among the main f actors limiting expansion of the Republic of 
Djibouti's foreign trade.  These concern in particul ar the size of the domestic market; the lack of 
transport infrastructure; the scarcity of fertile la nd (only 1,000 hectares ar e under cultivation);  the 
lack of qualified personnel and the rigidity of the La bour Code;  the high cost of electricity, water and 
telecommunications;  and quality management pr oblems.  The under-developed banking system 
makes access to financing difficult and problematic.  S hortcomings in trade info rmation, together with 
the low level of competitiveness of Djibouti's manu factures, prevent diversification of exports in 
terms of both products and markets. 
61. Some infrastructure-related issues are covered in the PRSP, as well as in the Diagnostic Trade 
Integration Study under the Integrated Framework,  and in the Government's sectoral strategies, 
including those for privatization.  They relate in particular to building the port at Doraleh; 
privatization of the electricity (EDD), telecomm unications (DT), and water (BDD) companies; and 
renovation and upkeep of the railway to Ethiopia, as well as roads and bridges. 
62. The Government is aware of the fact that enhancing the economy's competitiveness requires 
reform of State-owned enterprises.  The financial situation in the majority of these is not good and 
their investments often do not reflect market realiti es.  Those responsible fo r infrastructure services 
are frequently not in a position to provide these ad equately.  These enterprises represent a substantial 
financial burden for the State and cause considerable  distortions in the allocation of resources.  The 
Government has introduced a reform process (Cha pter III(4)(iii)).  The technical assistance and 
capacity-building needs for carrying ou t this programme are manifold.  They relate to the following: 
training of officials responsible for the manageme nt of State-owned enterprises and the introduction 
of internal reforms;  training of experts to build the capacity of the service responsible for State-owned enterprises;  conduct of diagnostic studies for certain enterprises with a view to their 
privatization; and support for the introduction of an  appropriate regulatory framework for sectors for 
which liberalization and privatization are planned. 
(iii) Integration of trade into development strategies 
63. Djibouti is one of the participants in the Integrated Framework (IF)
55, which highlights the 
need to take into account each country's trade prior ities in its national development plan or its poverty 
reduction strategy.  To allow forei gn trade to boost economic growth and raise the living conditions of 
the poor, it is recommended that trade be integrated into development strategies at the political and 
institutional levels and in partne rship between the Government and donors.  The final version of the 
PRSP in March 2004 covered trade policy issues, incl uding the diversification of exports.  It has 
allowed certain trade policy priorities to be defined.   Two projects are being financed with funds from 
Window II of the Integrated Framework and are intend ed to strengthen the institutions responsible for 
                                                      
55 For further details, see:  http://www.intre gatedframework.org [24 February 2005]. Djibouti WT/TPR/S/159/Rev.1 
 Page 25 
 
 
trade (Ministry of Trade and Industry, the ANPI and the Djibouti Chamber of Commerce) and to 
develop tourism.