WORLD TRADE  
ORGANIZATION  G/C/W/582 
3 July 2007 
 
 (07-2811) 
Council for Trade in Goods Original:   French 
  
 
APPLICATION FOR EXTENSION OF THE PERIOD OF USE 
OF MINIMUM VALUES 
 
Communication from Senegal
 
 
 
 The following communication, dated 29 June 2007,  is being circulated at the request of the 
delegation of Senegal.  
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  Senegal is a contracting party to the WTO Ag reement on Implementation of Article VII of the 
General Agreement on Tariffs and Trade 1994, known as the Customs Valuation Agreement. 
  By virtue of its LDC status, however, Senegal officially invoked and was granted the benefit 
of more favourable transitional provisions under th e special and differential treatment afforded by 
Article 20 and Annex III of the Agreement, althoug h these did not take effect in 1 July 2001. 
  On 5 June 2002, Senegal submitted a requ est to the WTO under Article IX of the 
WTO Agreement for authorization to apply minimum values to a restricted list of goods. 
 
 Since Decision No. WT/L/571 of 7 June 2004 gr anting the waiver was retroactive, Senegal 
applied for a further two-year extension.  By D ecision WT/L/655 of 28 July 2006, the WTO General 
Council decided to extend the period until 30 June 2007.   It should be recalled that the national appro ach adopted by Senegal in issuing reservations 
regarding the use of minimum values under Article 22 of the Agreement came in the wake of the 
unfortunate results of the first notif ication of reference values submitte d by Cote d'Ivoire on behalf of 
the member countries of the West African Ec onomic and Monetary Union (WAEMU), and in 
response to the new possibilities offered to the LDCs by the Doha Ministerial Declaration. 
 
 With the waiver granted to Senegal set to expi re on 30 June 2007, the fact is that the regional 
context is undergoing significant reforms affec ting the supplementary mechanism to the Common 
External Tariff (CET).   Indeed, the WAEMU, of which Senegal is a member, applies a CET involving significant 
external dismantling, with rates ranging from zero pe r cent to 20 per cent.  The establishment of this 
customs union was preceded by the implementati on of a preferential intra-Community regime on 
1 July 1996.   The supplementary mechanism to the WAEMU' s CET, which is made up of the special 
import tax (TCI), the digressive protection tax (TDP) and reference values, was a transitional and 
temporary measure pending the application of the sp ecial safeguard provisions in Article 5 of the G/C/W/582 
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  Agreement on Agriculture as a substitute for the TCI, which is currently the only remaining 
components of the WAEMU supplementary mechanis m that is effectively in use in Senegal. 
  As the provisions of Article 5 of the Agreem ent on Agriculture are still being negotiated at 
the WTO, the WAEMU is currently considering an alternative substitute me chanism that is more 
efficient and immediately operational.  There are at  least three justifications for this new approach: 
 
1. When the Customs Union was adopted and entered into force, agricultural and 
industrial policy requirements were not taken into account. 
2. The accompanying measures to facilitate the adjustment of the production sectors 
within the Union had not been identified, and no restructuring programme was 
implemented to allow for the transitional na ture of the mechanism that is about to 
lapse. 
3. At the ECOWAS level, the WAEMU is cu rrently negotiating with the European 
Union the establishment of a free trade area in the framework of the Cotonou 
Agreement providing for Economic Partne rship Agreements (EPA).  Impact 
assessments conducted in view of this Ag reement revealed a number of serious 
threats for certain sensitive and still fragile production sectors. 
 All of these reasons highlighted the need to unde rtake the reforms that were introduced within 
the WAEMU to replace the current mechanism with a safeguard mechanism that is consistent with 
WTO rules and disciplines. 
 
 Contrary to the current transitional measures (TCI, TDP, reference values) which are community mechanisms applied at the national le vel, this community safeguard measure will be 
applied at the community level.  
 Moreover, underlying the reforms introduced by  the WAEMU is the need for protection and 
defence of the vulnerable and fragile sectors, and above all a desire to ensure consistency with 
WTO rules and requirements on dumping, co untervailing measures and safeguards. 
  We note, in this connection, the following initiatives:  
- Implementation of Article VII of the GATT on the application of the common 
transaction value in the WAEMU memb er States, notified to the WTO; 
- evaluation of the coherence and conformity  of the Union's common trade policy and 
the trade practices of member States with  the rules and principles of the WTO; 
- the communication addressed to the WTO by the WAEMU Commission requesting a 
review of the Union's trade policy at the community level instead of individual, 
country-by-country reviews. 
 The aim of this process, then, is to gain be tter control over the deepening of integration and 
the opening up of the economies of the Union to th e multilateral trading system, following procedures 
that are more consistent with WTO disciplines.  
 The prospect of the waiver authorizing the a pplication of minimum values being lifted before 
the process initiated at the regional level has been  completed places Senegal in a situation which, 
during this transitional period, is somewh at difficult for some of its enterprises. 
  G/C/W/582 
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   It should be recalled that Senegal has never applied the WAEMU reference values, and in an 
effort to adhere to WTO rules, chose to resort to minimum values on a transitional basis, in keeping 
with the ordinary procedure established for that purpose.   Moreover, the fact that Senegal's tariff c oncession margin considerably exceeds the rates 
actually applied in the framework of the WAEMU' s CET makes a further waiver that much more 
legitimate.  The gap could be as much as 150 per cent if we consider the bound cumulation of customs 
duties and other duties and levies.   Meanwhile, the Customs Administration does not yet have complete control over the tax base, 
firstly because of the strong presen ce of an informal sector for which customs valuation rules are of 
little concern, and secondly because of the continuing  evasion, undervaluation and price manipulation 
practised by that sector.   For the WTO Agreement on Customs Valuation to be implemented effectively, there will 
have to be new procedures and a significant impr ovement in the skills and knowledge of customs 
officials.   Thus, the Customs Administration has embarked  on a series of measures to build its capacity 
and modernize its structures involving, inter alia , the improvement of the computerized risk analysis 
system by expanding its database which serves as an  information system on the value of goods that 
can be drawn on for decision-making in the area of valuation, but which does not replace the 
transaction value as the principal method for dete rmining the customs value of imported goods. 
  In this context, the Customs Administration developed a strategic plan comprising measures 
relating to staff training, improvement of the info rmation technology base with the development of a 
database, and the mastery of new information tech nologies to facilitate access to export markets and 
product reference prices with a view to evaluating potential risks related to the value of imported 
goods.   Senegal is gradually adopting b est valuation practices to the extent that not only does it apply 
the WTO software evaluation decision, but it is also moving towards domiciliation of preshipment 
inspection and the progressive ownership of the computerized risk analysis system. 
  Regarding the conditions of application of th e last decision granting an extension of the 
authorization to use minimum values, Senegal respected its commitments in their totality, inter alia  
those relating to management, scope of applicati on, notification and publication of the methodology 
for the determination of minimum values, and to  the submission of a semi-annual status report on 
implementation.  The last status report was sent on 27 March 2007.   Finally, as regards the enterprises, in spite of a difficult economic environment with narrow 
markets, a lack of infrastructure and high pro duction factor costs, adjustment and upgrading 
programmes are being implemented in accordance w ith the commitment made in connection with the 
previous application for extension. 
  Moreover, the application of minimum values si nce June 2004 has led to the establishment of 
healthy and fair competition between manufacturers and importers.  
 In the light of the arguments set forth above a nd pursuant to the paragraph in Article IX of the 
WTO Agreement, Senegal requests a second extensi on, for three further years, of General Council 
Decision WT/L/655 of 26 July 2006. 
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