WT/TPR/S/197 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIMES 
(1) OVERVIEW  
1. The results of Madagascar's presiden tial election of December 2001 provoked a 
socio-political crisis which ended in July 2002.  Tho ugh of short duration, the crisis seriously affected 
the country's economic performanc e (Chapter I(2)).  A new Constitution was adopted by referendum 
on 4 April 2007.1  The main change concerns the organi zation of the territory of Madagascar, 
following the replacement of the six provinces by  22 regions, subdivided into communes.  In 
principle, they enjoy administrative and financia l autonomy, which will be  introduced gradually.  
Madagascar also now has three official la nguages:  Malagasy, French and English. 
2. Executive power is exercised by the President  of the Republic and the Government.  The 
President of the Republic is elected by direct univer sal suffrage for a term of five years, renewable 
once only;  the most recent presidential election wa s held in December 2006.  The Government is 
composed of the Prime Minister and his cabinet;  the current Government was sworn in on 25 January 2007.  The Government Council, which is mainly responsible for legislative initiatives, is 
headed by the Prime Minister.  The ministries prep are draft legislation in their respective areas of 
competence for submission to the Council.  Improvement of the business environment is a State 
priority, (section (2) below), but the Committee for the Reform of Business Law ( Comité pour la 
réforme du droit des affaires  – CRDA), which is meant to coordinate  legislative proposals in this area, 
suffers from a lack of financial resources.
2  The Parliament exercises legislative power.  To be 
adopted, draft laws must be approved by each of the two chambers of the Parliament (the Senate and 
National Assembly).3  The President of the Republic promulgates the draft laws that have been passed 
by the Parliament.4  Laws are then published in the Journal officiel de la république  (Official Journal 
of the Republic), which is available only as a printed document. 
3. The President of the Republic signs internati onal treaties and agreements and promulgates 
them after ratification by the Parliament5;  this was the case with the WTO Agreement (section (iii)).  
Under the Constitution, international treaties and agreements, upon ratifica tion, take precedence over 
laws, subject to implementation by the other parties to the treaty or agreement concerned.  They are 
applicable as law in Madagascar as soon as they are ratified and are automatically binding.  Under this 
monist system, the WTO Agreement may be invoked directly in domestic courts, although this has 
never yet happened.  In hierarchical terms, ratifie d international treaties and agreements are followed 
in importance by the Constitution, laws, ordinances6, decrees and orders.  The main trade-related 
laws, ordinances and regulations are set out in Table II.1. 
                                                      
1 Law 2007-001 of 27 April 2007.  Consulted online at:  http://www.madagascar- 
presidency.gov.mg/index.php/item/449. 
2 "Madagascar:  Bilan commun pays CCA", July 2003.  Consulted online at:  
http://www.undg.org/archive_docs/5452-Mad agascar_CCA.pdf [21 December 2007]. 
3 The National Assembly has 121 seats and the Senate 90.  Deputies are elected by direct universal 
suffrage for a term of five years;  the last (early) legislative electi ons took place on 23 September 2007.  The 
next Senate elections will be held in 2008.  The Sena te represents the decentrali zed territorial authorities. 
4 According to article 58 of the 2007 Constitution, th e President of the Republic  shall promulgate laws 
within three weeks following their transmission by the National Assembly.  Prior to the expiration of that 
deadline, the President of the Republic may submit a request to Parliament, which cannot be refused, to reconsider the law or some  of the articles thereof. 
5 Title IV of the 2007 Constitution. 
6 Under Article 99 of the 2007 Constitution, the Pa rliament, by an absolute majority of votes, may 
authorize the President of the Republic to take measures by ordinance which normally require legislation.  Madagascar WT/TPR/S/197 
 Page 11 
 
 
Table II.1 
Madagascar's principal trade-related  laws and regulations, December 2007 
Sector Instrument/Law 
Customs legislation Customs Code 2006, Customs Tariff 2007 
Status of trader Commercial Code 
Value added tax, excise duties and cu stoms border levies Tax Code (2006 ed ition) and Finance Laws of 2006 and 2007 
Import prohibitions and licences Decree No. 92-993 of 2 December 1992 
Technical standards and regulati ons Law No. 97-024 of 14 August 1997 
Sanitary measures Ordinance No. 62-072 of 29 September 1962 
Phytosanitary measures Ordinance No. 86-013 of 17 September 1986 
Investment Law No. 96-015 of 13 September 1996 
Industrial free zone regime Law No. 89-027 of 29 December 1989, as supplemented and 
amended by Law No. 91-020 of 12 August 1991 
Large-scale investment in mining Law No. 2005-024 of 17 November 2005 
Procedures and regulations for the establishment of private commercial enterprises Law No. 2003-036 of 30 January 2004 
Protection of industrial property Ordinance No. 89-019 of 31 July 1989 
Protection of copyright and related rights Law No. 94-036 of 9 December 1994 
Competition Law No. 2005-020 of 17 July 2005 
Privatization of State-owned enterp rises Law No. 96-011 of 13 August 1996  
Government procurement Law No. 2004-009 of 26 July 2004 
Environment Law No. 90-033 of 21 December 1990 
Forests Law No. 97-017 of 8 August 1997 
Fisheries and aquaculture Ordinance No. 93-022 of 4 May 1993  
Mining Code Law No. 99-022 of 19 August 1999 
Hydrocarbons (prospecting, exploration and e xploitation) Law No. 96-018 of 4 September 1996 
Hydrocarbons (downstream activitie s) Law No. 99-010 of 17 April 1999 
Electricity Law No. 98-032 of 22 December 1998 
Water Law No. 98-029 of 20 January 1999 
Land transport Law No. 2004-53 of 28 January 2005 
Maritime transport Law No. 99-028 of 3 February 2000 
Civil aviation Law No. 2004-027 of 9 September 2004 
Telecommunications Law No. 96-034 of 13 December 1996, as supplemented and 
amended by Law No. 2005-023 of 17 October 2005 
Tourism Law No. 95-017 of 25 July 1995 
Foreign exchange regime Law No. 2006-08 of 13 July 2006 
Banking services (credit institutions ) Law No. 95-030 of 22 February 1996 
Banking services (microfinance institutions) Law No. 2005-016 of 29 September 2005 
Insurance Law No. 99-013 of 2 August 1999 
Source : Malagasy authorities. 
4. Judicial authority is vested in the Supreme Cour t, the courts of appeal and the lower courts 
attached to them, as well as the High Court of Justi ce.  The commercial courts are empowered to deal 
with trade disputes;  various mechanisms are provi ded for the settlement of disputes between foreign 
investors and the State (section (4) below).  Judges are appointed by the Judicial Service Commission, 
presided over by the President of the Republic.  Th e Constitutional Court rules on the constitutionality 
of treaties, ordinances and organic laws;  confli cts of jurisdiction;  and disputes relating to 
referendums and presidential, legi slative and Senate elections.  Th e development partners support a 
number of projects aimed at capacity buildi ng for judges and improving the functioning of 
Madagascar's judicial system. 
                                                                                                                                                                     
Ordinances are adopted by the Council of Ministers and en ter into force upon publication in the Official Journal 
of the Republic. WT/TPR/S/197 Trade Policy Review 
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5. The main function of the Ministry of the Economy, Planning, the Private Sector and Trade 
hereinafter the "Ministry in charge of trade" is to formulate and implement trade policy, including 
WTO-related matters, and all bila teral or plurilateral trade agreements.  Madagascar has not 
established an interministerial comm ittee to follow up trade negotiations.  However, a National Trade 
Policy Development Forum involves the private sect or, on an ad hoc basis, in follow-up to trade 
policy issues (for example, establishment of the lis t of sensitive products in the context of the 
negotiations for an Economic Partnership Agreemen t (EPA) with the European Union (EU)).  The 
Ministry of Industry, in collaboration with the Economic Development Board of Madagascar 
(EDBM), is responsible for investment policy, including the industrial free zone (IFZ) (section 4)).  
Other ministries are also involved in formulati ng and implementing trade policy, including the 
Ministry of Finance and those responsible for sectoral matters. 
6. A number of employers' and trade union organiza tions contribute to the elaboration of trade 
policy in Madagascar on an ad hoc  basis.  They include the Syndicat des industries de Madagascar  – 
SIM (Industrial Trade Union of Madagascar), the Groupement du patronat malgache  – FIV.MPA.MA 
(Madagascar Employers Group), the Chamber of Commerce, Industry and Handicrafts, the Chamber 
of Agriculture, the Groupement des entreprises de Madagascar  – GEM (Madagascar Enterprises 
Group) and the Groupement des entreprises franches et partenaires  – GEFP (Group of Free 
Enterprises and Partners).  However, there is no permanent structure for public-private dialogue and 
the State mainly uses ad hoc consultation mechanisms .  No national body is responsible for evaluating 
Madagascar's trade policy, but impact studies may be carried out (for example, concerning the EPA 
with the EU). 
(2) POLICY OBJECTIVES  
7. Madagascar's economic and social development strategy for the period 2007-2011, as set out 
in the Madagascar Action Plan (MAP)7, is aimed at achieving the Millennium Development Goals 
(MDGs) and is inspired by the national vision "Madagascar Naturellement ".  The MAP follows on 
from the "Poverty Reduction Strategy Paper" (PRSP)8 adopted in July 2003.  The major objective of 
the MAP is to raise Madagascar from 146th place (out of 177 countries) in the 2005 UNDP ranking to 
100th place in 20129, by reducing the proportion of the population living on less than US$2 per day 
from 85 per cent in 2003 to 50 per cent in 2012, and by raising the real annual average economic growth rate from 4.6 per cent in 2005 to 7-10 per cent by 2012.  In order to achieve strong economic 
growth, the State is counting on the emergence of a "thriving private sector in the areas of trade and 
investment at the national, regional and intern ational levels".  Madagascar has drawn up a 
macroeconomic and structural reform programme for the period 2006-2008, supported by an 
IMF Poverty Reduction and Growth Facility (PRGF) (Chapter I(2));  Madagascar receives support 
from its development partners. 
8. Since its first TPR, Madagascar has reviewed its trade policy and its investment regime;  new 
frameworks for investment and for the industrial fr ee zone (IFZ) are planned for 2008.  The State is 
relying on the development of agriculture, mini ng and tourism to accelerate economic growth, and it 
encourages both local and foreign direct investment .  The State is seeking to strengthen the private 
sector and improve the international competitiveness of  Malagasy goods and services, in particular by 
dismantling the numerous supply-side constraints.  It is also endeavouring to take better advantage of 
trade integration opportunities at the mul tilateral, regional a nd bilateral levels. 
                                                     
 
7 IMF (2007a). 
8 IMF (2003). 
9 UNDP (2006). Madagascar WT/TPR/S/197 
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9. The authorities are aware of the need to improve the business environment.10  One important 
aspect of such improvement consists in advancing the rule of law and good governance, inasmuch as 
the NGO Transparency International consider s Madagascar to have a corruption problem.11  
Noteworthy among the measures taken in this regard  are the stepping up of action to combat 
corruption12, inter alia  through the establishment of the Bureau indépendant anti-corruption  – 
BIANCO (Independent Anti-Corruption Bureau), whic h is responsible for implementing the national 
anti-corruption strategy.13  In 2005, the BIANCO found that "corru ption is still rife in all sectors and 
this problem is compounded by multiple functi onal shortcomings in the public services".14  T h e  
BIANCO is finding it difficult to obtain periodic d eclarations of personal assets, although these are 
compulsory for persons in high office (except for the President of the Republic).15  The authorities are 
planning to join the Extractive I ndustries Transparency Initiative (EITI).16 
(3) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO 
10. Madagascar signed the Marrakesh Agreement on 15 April 1994 and became a WTO Member 
on 17 November 1995, following ratification by its Parliament.17  It is recognized as a least developed 
country (LDC).  It is not a party to any plurila teral agreement or to any of the protocols and 
agreements concluded under WTO auspices.  Ma dagascar grants most-favoured-nation (MFN) 
treatment to all its trading partners. 
11. The concessions made by Madagascar dur ing the Uruguay Round are contained in 
Schedule LI for goods (Chapter III(2)(iv)(a)), and document GATS/SC/51 with regard to services 
(Chapter IV(5)).  Since its first TPR in 2001, Ma dagascar has made progress in the implementation of 
WTO agreements (Chapter III).  It maintains a mi ssion in Geneva, but inad equate human resources 
are a continuing obstacle to its participation in day-to-day WTO activities.  Since 1995, Madagascar has participated in four WTO dispute settlement proceedings as a third party.
18  It participates in the 
WTO Ministerial Conferences19, and generally supports the 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 cooperation activities. 
12. Madagascar is eligible for the trade policy co urses and has benefited from several other types 
of technical assistance offered by the WTO.  Nonetheless, technical assistance is still 
                                                      
10 Madagascar is ranked 149th out of 175 countries in the World Bank Doing Business Index, World 
Bank (undated). 
11 Madagascar is ranked 86th out of 163 countries in the Corruption Perceptions Index 2006.  Consulted 
at:  http://www.transparency.org/policy_rese arch/surveys_indices/cpi [11 August 2007]. 
12 Law No. 2004-030 of 29 July 2004. 
13 Information on the BIANCO consulted online at:  http://www.bianco-mg.org [11 August 2007]. 
14 BIANCO (2006). 
15 Decree No. 2004-983 of 12 October 2004. 
16 Les Nouvelles , "Les revenus des industries d'extraction sur le tapis de la transparence", 
18 October 2006.   Consulted online at:  
http://www.pgrm.mg/index.php?option=com_content&task=view&id=167& Itemid=20 [11 August 2007]. 
17 Law No. 95-008 of 10 July 1995. 
18 European Communities – Regime for the Importati on, Sale and Distribution of Bananas (DS27);  
European Communities – Export Subsidies on Sugar (DS265);  European Communities – Export Subsidies on Sugar (DS266);  European Communities – Export Subsidies on Sugar (DS283). 
19 WTO documents WT/MIN(96)/ST/119 of 12 December 1996, WT/MIN(99)/ST/66 of 
1 December 1999, WT/MIN(01)/ST/88 of 11 November 2001, WT/MIN(03) /ST/52 of 11 September 2003 and 
WT/MIN(05)/ST/72 of 15 December 2005. WT/TPR/S/197 Trade Policy Review 
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necessary (Annex II.1), as some problems that were noted during the first TPR in 2001 appear to 
persist in 2007.  Exemptions from the principle of national treatment have been noted in the 
application of excise duties (Chapter III(2)(iv)(d)).  Madagascar is still having difficulty in updating 
its WTO notifications (Table II.2), including the Integrated Database (IDB) since June 2005.20  
Capacity building in the areas of customs valuation and technical barriers to trade would also be 
desirable. 
Table II.2 
Status of WTO notifications, 1995 to August 2007 
Agreement WTO document Content 
Marrakesh Agreement WT/Let/112 of 30 September 1996 Delay in the applicati on of the Agreement on 
Customs Valuation until 17 November 2000;  and 
reservations under paragraphs 3 and 4 of Annex III 
G/AG/N/MDG/1 of 11 October 2000 No export subsidies, 1995-1999 Agreement on Agriculture 
G/AG/N/MDG/2 of 11 October 2000 No domestic support measures, 1995-1999 
III.  Enabling Clause of the 
GATT 1994  WT/COMTD/N/3 of 29 June 1995 Common Ma rket for Eastern and Southern Africa 
(COMESA) 
WT/REG176/N/1 of  9 August 2004, 
WT/REG176/N/1/Rev.1 of 27 August 2004 Southern African Development Community 
(SADC) IV.  Article XXIV of the GATT 1994  
WT/REG176/1 of 8 October 2004, 
WT/REG176/2 of 8 October 2004, WT/REG176/2/Rev.1 of 19 November 2004Protocol on Trade in the Southern African 
Development Community (SADC);  and revision
a 
Agreement on Implementation of Article VI of the GATT 1994 G/ADP/N/1/MDG/1 of 11 May 2001 No legislation 
WT/Let/112 of 30 Septem ber 1996 Reservations Agreement on Implementation of 
Article VII of the GATT 1994 G/C/W/259 of 9 April 2001 and 
G/C/W/259/Rev. 1 of 12 April 2001 Request for waiver in order to maintain minimum 
valuesb 
Agreement on Preshipment 
Inspection G/PSI/N/1/Add.4 of 9 October 1996 Domestic legislation 
G/LIC/N/3/MDG/1 of 9 September 2002 Description of procedures Agreement on Import Licensing 
Procedures G/LIC/N/3/MDG/2 of 21 June 2005 Description of new procedures 
G/SCM/N/95/MDG of 16 July 2003 No prescribed measures Agreement on Subsidies and 
Countervailing Measures, and Article XVI:1 of the GATT 1994 G/SCM/N/95/MDG/Suppl.1 of 
21 October 2004 No prescribed measures 
Agreement on Safeguards G/SG/N/1/M DG/1 of 16 May 2001 No legislation 
Agreement on Trade-Related 
Investment Measures G/TRIMS/N/2/Rev.8 of 19 July 2001 Industrial Free Zone regime 
a File reviewed by Members (WTO documents WT/REG176/ 3 of 22 December 2004, WT/REG176/4 of 12 March 2007, 
WT/REG176/5 of 2 May 2007, WT/REG176/M/1 of 12 June 2007, WT/REG176/6 of 3 July 2007). 
b Agreed by Decision of 18 July 2001 (WTO document WT/L/408 of 26 July 2001). 
Source : WTO Secretariat. 
(ii) Regional agreements 
(a) African Union21 
13. Madagascar is a founding member of the Afri can Union, the successor to the Organization of 
African Unity (OAU).22  Eventually, the African Union will be an economic and monetary union 
                                                      
20 WTO document G/MA/IDB/2/Rev.25 of 26 March 2007. 
21 Information on the African Union was gath ered from:  http://www.africa-union.org 
[12 August 2007]. 
22 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 Madagascar WT/TPR/S/197 
 Page 15 
 
 
whose component institutions will be the Conferen ce of Heads of State and Government (already 
established), the Council of Ministers (established) , the Peace and Security Council (established), the 
Commission (established), the Pan-African Parliament  (established), together with a Central Bank, a 
Monetary Fund, an African Investment Bank, a C ourt of Justice, an Economic, Social and Cultural 
Council (statutes already prepared), and technical committees. 
14. 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 si x stages spread 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.  Madagascar belongs  to two of the seven RECs recognized by the 
African Union, namely the Common Market for East ern and Southern Africa (section (b) below) and 
the Southern African Development Community (SADC) (section (c) below). 
15. The New Partnership for Africa's Development (NEPAD), adopted at the Lusaka (Zambia) 
Summit, is an AU programme with a Secretariat based in South Africa.  Its objectives include the 
development of appropriate infrastructures to  support the process of regional integration.23  T h e  
European Union (EU) launched a partnership on infr astructure in 2006, with €5.6 billion in financing 
from the tenth European Development Fund (EDF, 2008-2013).24 
(b) Common Market for Eastern and Southern African (COMESA)25 
16. Madagascar is a founding member of COMESA26, which has as its main objective the 
establishment of a common market, together with a monetary union (in 2025), with a view to 
achieving the continent-wide integration provided fo r by the African Union (section (a) above).  The 
COMESA treaty was notified to the WTO under the Enabling Clause of the GATT 199427, but has not 
yet been the subject of detailed examination by Members. 
17. COMESA's institutional framework comprises the Conference of Heads of State and 
Government (already established), the Council of Mini sters (established), the Secretariat (established 
in Lusaka, Zambia), a Court of Justice (establis hed), a Committee of Governors of Central Banks 
(established), an Intergovernmental Committee (e stablished), a Consultative Committee (not yet 
established), and technical committees (e.g. on trade and customs matters) (established).  The Trade 
and Development Bank for Eastern and Southern  Africa (PTA Bank) finances foreign trade 
transactions and projects by public or private invest ors resident in one of the member States.  The 
African Trade Insurance Agency (ATI) provides cove r against political risks for investors.  The PTA 
Reinsurance Company (PTA-RE) helps to promot e insurance and reinsurance in the region. 
                                                                                                                                                                     
more than 44 of the OAU's 53 member States.  The African Union was launched by the Durban Summit of 
9 July 2002. 
23 NEPAD (2006). 
24 European Commission, press release IP/06/986, 13 July 2006.  Consulted at:  
http//europa.eu/rapid/pressReleasesAction.do?refer ence=IP/06/986/&forma=HTML&aged=1&langage=EN&.g
uiLangage=fr [12 August 2007]. 
25 Information on COMESA was consulted at:  http://www.comesa.int/ [12 August 2007]. 
26 The treaty establishing COMESA was signed in 1993.  The members of COMESA are:  Burundi, 
Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.  Lesotho and 
Mozambique (1997), Tanzania (1999) and Namibia (2004) have left COMESA, and Angola suspended its 
participation because of duplication between COME SA and the SADC (section (c)) in the region. 
27 WTO document WT/COMTD/N/3 of 29 June 1995. WT/TPR/S/197 Trade Policy Review 
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18. Under the COMESA programme, the free trade area (FTA) was established on 
1 November 2000.  Its guiding principle is the exchange of preferences on originating products 
(Chapter III(2)(x)), on a reciprocal basis.  Djibouti, Egypt, Kenya28, Madagascar (Chapter III(2)(x)), 
Malawi, Mauritius, Sudan, Zambia and Zimbabwe eliminated their customs duties (on a reciprocal 
basis) on originating products on the agreed date;  they were joined by Burundi and Rwanda on 
1 January 2004.  In order to facilitate their trad e integration, the COMESA member countries adopted 
the Harmonized System (HS) 2002, the Automate d System for Customs Data (ASYCUDA) and 
EUROTRACE.  The customs union was to have entered into force at the end of 2004, but this project 
has been postponed until December 2008.  The common external tariff (CET) rates that have been 
adopted are:  zero per cent for raw materials and cap ital goods;  10 per cent for intermediate products;  
25 per cent for finished goods.  However, the member  countries' product classifications have not yet 
been harmonized.  Nor do members have an agenda  for harmonizing domestic taxes on products, but 
the COMESA Secretariat identifies non-tariff barrier s (e.g. non-recognition of certificates of origin) 
and is undertaking missions to promote awareness in the countries concerned. 
19. The other stages in the establishment of a common market concern the free movement of 
persons, capital and services.  The Protocol on the free movement of persons should lead in the 
first instance to the abolition of the compulsory visa in 2000.  Madagascar has not yet signed the Protocol;  however, a 90-day visa is issued on arri val to nationals of COMESA member countries.  
COMESA was made a common investment zone in  2003, and the regional investment agency 
established in Cairo, Egypt, has consultative links with the national investment promotion agencies. 
20. The establishment of a monetary union in 20 25 has been an objective (of the PTA) since 
1992, an objective which was revived in 1999.  Until 2000, it was planned that member States with significant cross-border trade should introduce limited  convertibility of their currencies.  Between 
2000 and 2024, it was planned to establish a si ngle currency and to achieve macroeconomic 
convergence in order to support monetary union.  Since 2006, the COMESA member countries have 
been studying the possibility of establishing a mone tary institute to lay th e groundwork for monetary 
union. 
21. The members of COMESA are continuing negotiati ons with the EU for the conclusion of an 
Economic Partnership Agreement (EPA) by the end of 2008 (section (e) below);  Madagascar is a 
member of the Eastern and Southern Africa Group (AFOA)
29 (section (e) below).  COMESA and the 
United States consult regularly on matters relating to  the promotion of trade and bilateral investment 
through the Trade and Investment Council set up u nder an agreement of 29 October 2001 (section (f) 
below).30 
(c) Southern African Development Community (SADC)31 
22. Established in 1992, the SADC succeeded the Southern African Development Coordination 
Conference (SADCC).32  Madagascar has been an SADC me mber since 18 August 2005.  The initial 
                                                      
28 In order to protect its domestic industry, Kenya has been authorized to apply a non-preferential tariff 
on sugar from other COMESA me mbers, until 28 February 2008. 
29 Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Eritria, Ethiopia, Kenya, 
Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe.  The COMESA 
members not involved in the AFOA are Djibouti, Egyp t and Swaziland, which, for negotiating purposes, are 
included in other groups. 
30 Agreement between the Government of the Unite d States of America and the Common Market of 
Southern and Eastern Africa concerning the development of trade and investment relations.  Consulted at:  
www.ustr.gov/assets/Trade_Agreements/TIFA/asse t_upload_file563_7723.pdf [13 August 2007]. 
31 Web portal of the SADC:  http ://www.sadc.int/ [13 August 2007]. Madagascar WT/TPR/S/197 
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objective of the SADC is to establish a free trade area in 2008;  this project has been notified to the 
WTO under Article XXIV of the GATT 199433, and was considered by the Members at their meeting 
on 15-16 May 2007.34  In October 2006, the SADC undertook to establish a customs union in 2010, a 
common market in 2015 and a monetary union in 2016.  A further aim of the SADC is to contribute to 
the maintenance of peace and security in the regi on, and the SADC Brigade was recently established 
for that purpose. 
23. The institutional framework of the SADC comp rises the Conference of Heads of State and 
Government (already established), the Council of Mini sters (established), the Secretariat (established 
in Gabarone, Botswana), a Court (established in  Windhoek and operational since October 2006) and 
technical committees of Ministers (for example,  the already established Council of Ministers 
responsible for trade matters (CMT)). 
24. The Protocol on Trade (and the amendment thereto)35, which has been implemented since 
1 September 2000, is aimed at establishing a free trade area from 2008;  Madagascar deposited its 
instruments of ratification on 21 February 2006.36  Each of the member States presents its tariff 
reduction scheme for approval;  Madagascar's scheme  was endorsed at the Extraordinary Summit of 
Heads of State and Government of the SADC held  in October 2006.  Each scheme is based on three 
main categories of product:  those in category A (mainly capital goods) are liberalized as from the first year;  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 (which are deemed sensitive by member 
States and may not exceed 15 per cent of each member's total merchandise trade) are to be liberalized 
by 2012.
37  Sugar is not included in the free trade regime and is the subject of special treatment;  
Madagascar supports such treatment in order to revi ve its sugar subsector (Chapter IV(2)(iii)).  SADC 
rules of origin are negotiated on a product-by-product basis (Chapter III(2)(iii)). 
25. In order to facilitate their trade integrati on, the member countries of the SADC have 
harmonized the various documents re quired for import and export, including the certificate of origin.  
The member States are also examining non-tariff barri ers to trade between SADC member countries.  
The SADC has adopted a memorandum of understa nding on standardization, quality, accreditation 
and metrology.  However, the harmonization of internal taxes is not yet envisaged. 
                                                                                                                                                                     
32 The members of the SADC are:  Angola, Botswa na, Democratic Republic of the Congo, Lesotho, 
Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.  The five members of the Southern African  Customs Union (SACU) are members of the SADC.  
The Seychelles left the Community in 2002. 
33 WTO documents WT/REG176/N/1 of 9 August 2004, WT/REG176/N/1/Rev.1 of 27 August 2004, 
WT/REG176/1 of 8 October 2004, WT/REG176/2 of 8 October 2004, and WT/REG/176/2/Rev. 1 of 
19 November 2004. 
34 WTO document WT/REG176/M/1 of 12 June 2007. 
35 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 De mocratic Republic of the Congo is not a signatory).  The five members 
of the Southern African Customs Union (SACU) are parties to the Protocol.  Angola has not yet submitted its offer for tariff reduction to the members of the SADC.  For further details concerning this instrument, see the 
Secretariat report contained in WTO document WT/REG176/4 of 12 March 2007. 
36 According to the authorities, Madagascar has signed and ratified the Protocol on Immunities and 
Privileges, the Protocol on the Tribunal, the Protocol on Education and Training, the Protocol on Health, and the 
Protocol against corruption. 
37 In addition, a fourth category (E) covers produc ts ineligible for preferential treatment under the 
general and security exceptions provided for in Articles 9 and 10 of the Protocol. WT/TPR/S/197 Trade Policy Review 
Page 18 
 
 
26. In the context of the liberali zation of trade in services, a protocol on services was drawn up 
and adopted in June 2007.  The SADC has also concluded a protocol on finance and investment 
(already signed by Madagascar), and a protocol on facilitation of the movement of persons;  none of 
these protocols has yet come into force. 
27. Some SADC member countries are continuing negotiations with the EU with a view to 
concluding an economic partners hip agreement (EPA) by the end of 2008 (section (e) below);  
Madagascar belongs to the AFOA group (section (b) above). 
(d) Indian Ocean Commission (COI)38 
28. Madagascar is a founding member of the COI which was established in 1984 by the Victoria 
Agreement, with a secretariat b ased in Quatre Bornes (Mauritius).39  Since 1998, Madagascar has 
eliminated tariffs on goods originating from the COI countries.  Since adopting new guidelines at the 
third Summit of Heads of State and Government in July 2005, the COI's mandate has been to 
encourage intra-regional trade and to defend the is land interests of its members.  "The COI today 
constitutes a leading circle of cooperation designed to  facilitate integration of the south-west Indian 
Ocean islands into broader regional groupings and, t hus, help them to adjust to the globalization 
process".40 
(e) Relations with the European Union (EU) 
29. Madagascar is one of the 79 ACP countri es with which the EU signed the Cotonou 
Agreement, which provisionally ente red into force on 1 March 2000.41  The trade provisions are one 
of the mechanisms for cooperation between the AC P countries and the EU, whereby the latter grants 
duty-free admission to non-agricultural products a nd the majority of processed agricultural products 
originating in 78 ACP countries (excluding South A frica) on a non-reciprocal basis.  Madagascar is 
one of the countries that have benefited, under the Agreement, from the provisions of the protocols on 
sugar42, bananas and bovine meat. 
30. The Members of the WTO have granted th e EU a waiver from its obligations under 
Article I:1 of the GATT 1994 (on MFN treatment) for the period extending from 1 March 2000 to 
31 December 2007, at which date new trading a rrangements consistent with WTO rules must be 
concluded between the two parties.43  In accordance with the Coton ou Agreement, these arrangements 
                                                      
38 Information on the COI was consulted on its web portal:  http://www.coi-ioc.org/ [13 August 2007]. 
39 The members of the COI are:  Comoros, Réunion (France), Madagascar, Mauritius and the 
Seychelles. 
40 COI Press Release, 23rd Session of the COI Council.  Consulted online at:  
http://www.coi-ioc.org/fileadmin/multimedia_francais/ centre_medias/communiques_de_presse/downloads/ 
COMMUNIQUE_DE_PRESSE-23emeConseil.pdf [14 August 2007]. 
41 The Agreement was signed on 23 June 2000 at Cotonou, in Benin, and officially entered into force 
on 1 April 2003 after its ratification.   The Agreement replaced the Lomé Co nvention, in effect  since 1975, the 
fourth extension of which expired at the end of February 2000. 
42 The European Union undertook to purchase some 1.4 million tonnes of sugar, at the guaranteed 
Community price, from countries that are signatories to Protocol No. 8 on Sugar under the Cotonou Agreement (Barbados, Belize, Republic of the Congo, Fiji, Guyana, Côte d'Ivoire, Jamaica, Kenya, Madagascar, Malawi, 
Mauritius, Suriname, St. Kitts and Nevis, Swaziland, Ta nzania, Trinidad and Tobago, Uganda, Zimbabwe and 
Zambia);  the bilateral agreement between the EU and India contains identical provisions.  The new market 
organization for sugar came into force on 1 July 2006 and provides for a 36 per cent cumulative reduction in the 
price of sugar on the European market between 2006 and 2009 (WTO document WT/TPR/S/177/Rev.1 of 
15 May 2007). 
43 WTO document WT/MIN(01)/15 of 14 November 2001. Madagascar WT/TPR/S/197 
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will take the form of economic partnership agreements (EPAs)  between the EU and various 
ACP regional groupings;  Madagascar belongs to th e AFOA group (section (b) above).  However, as 
the parties concerned were unable to finalize an y formal agreement by 31 December 2007, they 
signed an Interim Agreement on Market Access , Economic Cooperation a nd Development, and 
Fisheries.44  The Interim Agreement entered into for ce on 1 January 2008, but the negotiations will 
continue until the full agreement is concluded by 31 December 2008. 
31. Madagascar has submitted a tariff offer in co llaboration with the Comoros, Seychelles and 
Mauritius (CMMS subgroup).  The offer relates to a tariff reduction spread over 15 years.  The EU's 
market access offer relates to duty-free and quota-fr ee imports of all products, with the exception of 
rice and sugar (with continued implementation of  the Protocol on Sugar until 30 September 2009, 
followed by a transition period until 30 September 2015). 
32. According to the authorities, Malagasy economic  operators use preferences granted under the 
Cotonou Agreement, but not those granted to LD Cs (including Madagascar) under the "Everything 
but Arms" (EBA) initiative of the EU45, since the rules of origin under the Cotonou Agreement are 
considered more favourable to them. 
33. Madagascar exports sugar to the EU under th ree types of preferential quota:  a quota of 
10,760 tonnes under the Sugar Protocol of the ACP- EU Agreement, which has been extended under 
the Interim Agreement;  a quota of 2,500 tonnes under the special preferential sugar regime (SPS);  
and a quota of 5,000 tonnes under the EBA initiative.  The enterprises active in the sector nevertheless 
focus on only the first of these quotas, given inad equate production levels (Chapter IV(2)(iii)). 
(f) Relations with the United States of America 
34. Madagascar is one of the 37 countries eligible  for the programme set up by the United States 
under the African Growth and Opportunity Act (AGOA)46;  Madagascar is also eligible for 
United States preferences under the Generalized System of Preferences  (GSP), but they are not used 
by Malagasy economic operators.  The AGOA be neficiary countries are granted duty-free and 
quota-free access to the US market until 2015 for a ra nge of products, including selected agricultural 
and textile products (except for wear ing apparel).  As regards weari ng apparel, Madagascar has been 
eligible, since 1 March 2002, for the special provision on the inclusion of fabrics from third countries, which will remain in force until 30 September 2012
47;  the authorities report 21.4 million kilograms of 
Malagasy textile exports under the AGOA in 2006,  for a total value of US$195 million, roughly 
double the 2001 level.  As a member of COMESA (section (b) above), Madagascar qualifies for the 
AGOA Linkage in COMESA (ALINC) programme.48  Madagascar is also granted preferential access 
                                                      
44 The Interim Agreement between th e EU, on the one hand, and the Comoros and Madagascar, on the 
other, was signed on 11 December 2007.  European Commission, Trade DG, "Update:  Interim Economic Partnership Agreements".  Consulted online at:  http://trade.ec.europa.eu/ doclib/docs/2007/november/ 
tradoc_136959.pdf [21 December  2007]. 
45 Under this initiative, the EU has since 2001 granted duty-fr ee access, without any quantitative 
restriction, to products originating from the LDCs (except for arms and ammunition).  However, temporary 
exceptions are provided for rice and sugar (until the end of 2009).  The exception has ended for bananas, for which imports into the EU from eligible LDCs have been exempt from customs duties since 1 January 2006 
(WTO document WT/TPR/S/177/Rev.1 of 15 May 2007). 
46 USTR (2007). 
47 Madagascar also benefits from the provision on handmade ("category 9") products. 
48 Programme of assistance introdu ced to stimulate exports from the COMESA countries to the 
United States.  Consulted online at:  http://www.ad distribune.com/A rchives/2002/09/06-09-02/AGOA.htm 
[14 August 2007]. WT/TPR/S/197 Trade Policy Review 
Page 20 
 
 
for its sugar exports within the limits of a quota,  which is not filled, however, because of low 
Malagasy sugar output (Chapter IV(2)(iii)). 
(g) Other trade agreements and arrangements 
35. Many countries extend (non-reciprocal) preferen tial tariff treatment to goods originating in 
Madagascar under the Generalized System of Prefer ences (GSP).  The authoriti es state that China has 
granted zero-rate Special Preferential Customs Tariff (SPCT) treatment for 187 products since 
early 2005. 
(4) INVESTMENT  
36. The general framework for investment in Mada gascar did not change substantially between 
the country's first TPR in 2001 and the end of D ecember 2007.  This general framework comprises 
domestic legislation establishing the general pr inciples governing the reception and protection of 
foreign investment49, supplemented by specific framework s for large-scale mining investments50, and 
the industrial free zone (IFZ) regime.51  The authorities have indicated that the investment and IFZ 
regimes are due to be modified from 2008 onwards.  Under this domestic le gislation, Madagascar 
offers the customary guarantees for foreign direct investors in respect of  security of capital and 
investment, freedom to transfer capital contributi ons, compensation for expropriation, and equality of 
treatment.  Legal and natural persons may establi sh businesses in all areas of activity and hold 
100 per cent of a firm's capital (with the exception of certain act ivities such as fixed 
telecommunications (until June 2008), postal services,  transport and distribution of electric power, 
and certain transport, airport and port services (C hapter III(4)(iii)).  Under the foreign exchange 
regime in force, foreign direct investment is not su bject to declaration, prior authorization or control, 
and non-residents may undertake capital transactions.52 
37. Madagascar has signed bilateral agreements on investment promotion and protection with:  
France (in force since 2005), Mauritius (2006), the OPEC Fund (2006), the Belgium-Luxembourg Economic Union (2006), China (2006), Germany (2007)  and South Africa (2007).  Agreements with 
Thailand, Switzerland, the Republic of Guinea, Mo rocco and the Netherlands are in the process of 
being finalized.  Existing tax treaties with France (1 984) and Mauritius (1996) are designed to prevent 
double taxation of nationals resident in one or th e other of the partner countries.  The Cotonou 
ACP-EU Agreement provides for the protection of  European investments in the ACP countries 
(Articles 260, 261 and 262);  this topic should in  principle also be covered by the Economic 
Partnership Agreement (section (3)(ii)(e)). 
38. Madagascar's bilateral agreements on the promoti on and protection of investment provide for:  
national treatment and most-favoured-nation treatment (on a reciprocal basis) for investors from other 
contracting parties;  compensation for expropria tion;  freedom to transfer funds earned from 
investment activities;  and dispute settlement.  On th e latter point, Madagascar offers foreign investors 
a choice between referral to a nati onal arbitration body or court, on the one hand, and arbitration by 
the International Centre for Settlement of Invest ment Disputes (ICSID), on the other.  Madagascar's 
membership, since 1989, of the Multilateral Invest ment Guarantee Agency (MIGA) also offers 
investors the possibility of guarantees against non-comme rcial risks.  Cover against political risk is 
                                                     
 
49 Law No. 96-015 of 13 September 1996 (under revision for 2008). 
50 Law No. 2005-024 of 17 November 2005. 
51 Law No. 89-027 of 29 December 1989, as supplemented and amended by Law No. 91-020 of 
12 August 1991. 
52 Law No. 2006-008 of 13 July 2006. Madagascar WT/TPR/S/197 
 Page 21 
 
 
also available to investors through the African Tr ade Insurance Agency (ATI), of which Madagascar 
is also a member. 
39. Since the first TPR of Madagascar, a new le gal framework inspired by the OHADA Uniform 
Act on Trading Companies has been made applicab le to trading companies set up in Madagascar.53  
Since 2003, private land acquisition by foreign inv estors is permitted, provided that the foreign 
exchange input amounts to US$500,000 or more.54  Under this provision, foreigners may acquire land 
with a maximum surface area of:  10,000 m2 for an activity in the banki ng or insurance sector;  
15,000 m2 for real estate activities;  25,000 m2 for tourist activities;  and 5,000 m2 for any other 
activity.  A waiver may be requested with regard to  the maximum surface area in the case of a foreign 
exchange input higher than the required minimum.   Authorization from the Government Council is 
required.  Although the acquisition of State land cont inues to be reserved to nationals, access to such 
land by foreigners is facilitated by the granting of long leases (ranging from 18 to 99 years).55 
40. At the institutional level, the main innovati on since the first TPR of Madagascar in 2001 
concerns the establishment of a Single Window for investment and the development of enterprises 
(Guichet unique des investissements et  de développement des entreprises  – GUIDE)56, which has been 
operational since 2004.  The GUIDE groups together  the services concerned by company formation 
formalities, which may be carried out for promoter s within four days, without costs.  The GUIDE 
receives the files containing applications for access to land57, authorizations for recruitment of foreign 
workers58, authorizations for tourism es tablishments, or for approval under the industrial free zone 
(IFZ) regime.  The GUIDE processes these files and issues the documents requested.  The GUIDE is 
currently integrated into the Economic Development Board of Madagascar (EDBM)59, which started 
operating in March 2007.  The EDBM  is responsible for Madagascar's investment policy and for 
promoting Madagascar as a destination. 
41. Under the ordinary law regime, any investment  for the establishment of an enterprise is 
subject to a "capital inflow duty" ( droit sur les apports  – DA), which is determined in the light of the 
amount of the investment60, a professional tax61, miscellaneous duties and charges on the purchase of 
buildings (by Malagasy companies) or on the long-te rm rental of buildings (by foreign companies).  
Enterprises are subject to the company profits tax (I BS), set at 30 per cent with a minimum leviable 
amount62;  this rate is set at 45 per cent for forei gn companies whose registered offices are not in 
Madagascar, except where they perfo rm public works contracts.  Microfinance institutions are granted 
                                                      
53 Law No. 2003-036 of 30 January 2004. 
54 Law No. 2003-028 of 27 August 2003. 
55 Law No. 96-016 of 13 August 1996. 
56 Decree No. 2003-938 of 9 September 2003. 
57 For example, http://www.tana-cciaa.org/dow nload.php?cat=invest&file=dd529608eaab.pdf. 
58 Order No. 18638/05 of 1 December 2005. 
59 Decree No. 2006-382 of 31 May 2006.  Information on the EDBM was obtained from the web portal:  
http://www.edbm.gov.mg/ [14 August 2007]. 
60 The duty (levy charged by the State) amounts to 1 per cent for the first bracket (up to 
MGA 10 million), 0.5 per cent for the second bracket (between MGA 10 million and MGA 100 million), and 0.1 per cent for the third bracket (amounts in excess of MGA 1,000 million). 
61 According to the authorities, this provision is repealed by the 2008 Finance Law. 
62 Article 01.01.16 of the General Tax Code (2006 edition).  The minimum leviable amount is:  
MGA 100,000, increased by 0.5 per cent of the annual turnover for enterprises in the manufacturing, 
handicrafts, agriculture, mining, transport, tourism and hotel sectors;  MGA 300,000, increased by 0.5 per cent 
of the annual turnover for other enterprises.  The IBS reductions provided for newly established enterprises are no longer available as fr om fiscal year 2007. WT/TPR/S/197 Trade Policy Review 
Page 22 
 
 
fiscal incentives under the ordinary law regime in order to stimulate the supply of their services 
(Chapter IV(5)(iv)).63 
42. Madagascar offers two special tax regimes for investors, one for large-scale mining 
investments (Chapter IV(3)(i)), the other for enterp rises established in the industrial free zone (IFZ).64  
The latter regime is available to companies whose activities are mainly export-oriented, or which sell 
directly to enterprises eligible for the IFZ regime.  In the case of the former, exports must account for 
at least 95 per cent of their sales;  5 per cent may be sold on the domestic market, subject to the payment of ordinary import duties and taxes.  In practice, these are free points (isolated free enterprises not located in a defined geographical area ).  The method of financing investment projects 
constitutes one of the conditions of eligibility for th e free zone regime:  for enterprises wholly owned 
by non-resident foreigners, all start-up investment costs (including the initial working capital) must be 
covered by foreign exchange inflows;  in the case of associations between foreigners and nationals, 
any foreign exchange investment (including the initi al working capital) must be covered by foreign 
exchange financing;  and if the capital is who lly owned by residents, any investment financing 
scheme is acceptable. 
43. Compared to the ordinary law regime, the IFZ regime offers im portant advantages 
(Table II.3).  Ordinary law enterprises which suppl y free enterprises are subject to VAT, but the latter 
may apply for reimbursement thereof within 60 da ys following the final export of finished goods.  
Investors may open foreign exchange accounts fo r their repatriated export earnings.  Project 
promoters wishing to obtain the status of free enterpri se must file their applications with the EDBM or 
the Directorate for the Support of Industrial and Handicrafts Development (DADIA) within the 
Ministry of Industry.  Each application file fo llows a lengthy procedure leading up to approval or 
rejection (file to be corrected or redrafted) by th e interministerial technical committee to which it is 
submitted.  Free enterprise status is conferred by final decree signed by the Secretary-General of the 
Government and the promoter is so notified. 
Table II.3 
Fiscal regulations under the industrial free zone regime, December 2007 
 Fiscal regulation 
1 – Enterprises   
(a) Company profits tax (IBS)  
- Promotion/exploitation enterprise (EPE) Exempt for 15 years, thereafter liable to IBS at 10 per cent 
- Industrial processing enterprise (EIT) Exempt for 5 years, thereafter liable to IBS at 10 per cent 
- Intensive basic production enterprise (EPIB) Exempt for 5 years, thereafter liable to IBS at 10 per cent 
- Service enterprise (ES) Exempt for 2 years, thereafter liable to IBS at 10 per cent 
(b) Professional tax Exempt 
2 – Persons   
(a) Taxes on distributed dividends 10 per cent without grace period 
(b) Taxes on salaries Maximum of 35 per cent of the taxable base (for expatriates) 
3 – Goods   
(a) Customs duty and import tax Exempt 
(b) Value-added tax General principle:  all VAT payments to be the subject of automatic reimbursement 
(c) Export duties and taxes Exempt 
(d) Excise duty Exempt 
Source : Malagasy authorities. 
                                                      
63 These are exempt from the IBS of 30 per cent a nd from the minimum flat-rate tax over the first 
five fiscal years and, in the case of those that are not mutual institutions, an additional 50 per cent reduction on 
the IBS is applied up to the 10th fiscal year. 
64 Law No. 89-027 of 29 December 1989, as supplemented and amended by Law No. 91-020 of 
12 August 1991.  This regime has been notified by Madagascar to the WTO under the Agreement on Trade-Related Investment Measures (WTO document G/TRIMS/N/2/Rev.8 of 19 July 2001). Madagascar WT/TPR/S/197 
 Page 23 
 
 
ANNEX II.1:  TRADE-RELATED TECHNICAL ASSISTANCE 
1. With the support of the international co mmunity, Madagascar has since 2002 been 
implementing an economic and structural reform programme.  The Madagascar Action Plan (MAP) 
reflects the Government's commitme nt to attain rapid economic grow th and reduce poverty.  To that 
end, in the context of this second Trade Policy Review (TPR), the authorities expect to mobilize 
trade-related technical assistance in order to achieve the various objectives, including those defined in 
the MAP.  Madagascar already participates in the Integrated Framework (IF)1, and also wishes to join 
the JITAP2 (Joint Integrated Technical Assistance Programme). 
2. Madagascar has benefited from a large number of actions undertaken by the WTO and by 
other international organizations such as the United Nations Conference on Trade and 
Development (UNCTAD), the International Trade Centre (ITC), the United Nations Development 
Programme (UNDP), the World Bank (WB), the Inte rnational Monetary Fund (IMF), to support the 
development of its international trade.  Those actions worthy of special mention include the 
participation of Malagasy officials in 120 seminars, workshops, courses, missions and other 
WTO activities between the first TPR in 2001 and May 2007.  In 2007, a Malagasy official attended 
the Netherlands training programme administered by the WTO.  In terms of support infrastructure, 
Madagascar has benefited from a reference centre se t up on the premises of the Ministry of Trade;  
however, some of the Centre's equipment needs to be replaced in order to enable civil servants and 
other users to receive timely information on the multilateral trading system. 
3. Madagascar currently has trade-related technical  assistance needs in various areas, namely:  
implementation of trade-related ag reements;  participation in the regular activities of the WTO;  
capacity-building for participation in trade negotiati ons;  formulation of trade policy;  supply-side 
constraints;  and the integration of trade and development policies. 
(1) IMPLEMENTATION OF AGREEMENTS , TRAINING AND POLICY FORMULATION  
4. The implementation issues of most concern to Madagascar are those relating to WTO rules 
such as anti-dumping, countervailing and safeguard me asures;  trade-related aspects of intellectual 
property rights (TRIPS);  sanitary and phytosanitary  measures (SPS);  technical barriers to trade 
(TBT);  customs valuation;  trade negotiation t echniques;  establishment of the necessary institutional 
structures;  harmonization of domestic laws and regulations with WTO principles and rules;  
notifications;  and dispute settlement. 
5. As regards rules, the Government of Madag ascar wishes to establish a national authority 
responsible for remedial measures.  Madagascar  currently has no legislation in the area of 
anti-dumping and countervailing duties or safeguard measures.  It wishes to strengthen national 
capacity in respect of geographical indications.  Madagascar is experiencing a great deal of difficulty in complying with sanitary and phytosanitary m easures and international technical regulations, 
particularly those required for its exports of ag ricultural products, mainly plants, fresh fruit and 
vegetables, meat and other food products.  Moreover, informati on on these regulations is still not 
disseminated widely enough in Madagascar.  These problems limit the potential for access to the different regional and international markets, a nd Madagascar needs support in the preparation, 
finalization and implementation of projects under the Standards and Trade Development 
Facility (STDF). 
                                                     
 
1 Consulted at:  http://www.integratedframework.org. 
2 Consulted at:  http://www.jitap.org. WT/TPR/S/197 Trade Policy Review 
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6. Madagascar would need capacity-building and t echnical assistance to align certain domestic 
laws with WTO rules.  Customs officials and ec onomic operators encounter difficulties with certain 
implementation aspects of the Agreement on Customs Valuation;  technical assistance in this area is 
requested.  Training for the main actors in the pr ivate sector, academics, parliamentarians and the 
media is requested to make them aware of the oblig ations and benefits gene rated by the multilateral 
trading system.  Madagascar is having difficulty in  honouring its notification obligations;  training in 
this field appears to be necessary. 
7. Madagascar wishes to build capacity in order to  participate efficiently in the negotiations 
under way at the multilateral, regional and bilatera l levels.  The dispute settlement mechanism is 
another area in which Madagascar would have liked to  acquire proficiency so as to be prepared for 
any trade disputes. 
(2) SUPPLY -SIDE CONSTRAINTS  
8. Supply-side constraints are among the main f actors limiting the expansion of Madagascar's 
external trade.  The Government has already sought to develop infrastructure, and technical assistance 
could help strengthen those efforts.  In this c onnection, Madagascar wishes to receive support for the 
development of a multimodal transport system, th rough the rehabilitation of ports and roads and the 
promotion of air transport in order to reduce the associated costs.  Operational support for customs 
administration (extension of the ASYCUDA++ system) is also desirable. 
9. Agriculture is a key sector for Madagascar, but output is low.  The low yields from 
agricultural production have an impact on the domestic economy.  Indeed, Madagascar continues to 
be incapable of fulfilling its supply commitments:  it is known as a "sample country".  Continued 
efforts by the World Bank and other internationa l organizations will be necessary to increase 
production and both horizonta l and vertical diversification.  Ma dagascar's exports have suffered from 
preference erosion and from declining prices fo r basic commodities on the international market, 
particularly vanilla.  This reflects the lack of co mpetitiveness of such products, and solutions need to 
be found to this problem. 
10. Malagasy enterprises, including free zone enterp rises, experience difficulties of access to 
credit and inputs, including electricity, water a nd telecommunications, and also suffer the adverse 
effects of poor governance.  The efforts undertaken  by the State remain inadequate.  Funding for 
economic activities by the banking system does not appear to be on a sufficiently large scale to 
provide support for small and medium-sized enterp rises planning long-term (high-risk) investments.  
The extension of microfinance in rural areas is a so lution which might make it possible to cross the 
self-sufficiency threshold in agricultural activity.  The improvement of supply in the services sector, 
and more particularly in the fields of transport, telecommunications and tourism, is also desirable. 
(3) ONGOING INTEGRATION OF TRAINING AGREEMENTS AND POLICY FORMULATION  
11. After developing a number of programmes under the "Madagascar Naturellement " vision 
and/or the Poverty Reduction Strategy Paper (PR SP), Madagascar is currently entering the phase of 
implementation of the MAP with a view to accel erating and better coordi nating its development 
process.  However, none of these documents pays su fficient attention to trade.  The results of 
Madagascar's second TPR could be  exploited for this purpose. 
12. For poverty reduction purposes, emphasis could be placed on improving marketing channels 
in areas of activity of particular interest to the most vulnerable social groups, and on facilitating their 
access to the means of production and improving their productivity. Madagascar WT/TPR/S/197 
 Page 25 
 
 
13. In overall terms, action to deal with the trade aspects should facilitate fulfilment of the main 
objectives of the MAP.