RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/152 
7 September 2005  
 
(05-3817) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
TUNISIA 
 
  
 
This report, prepared for the second Trade Policy Review of Tunisia, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Tunisia on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed to:  
Mrs Catherine Hennis-Pierre (tel. 022 739 5640;  fax 022 739 5765) or 
Mr Jacques Degbelo (tel. 022 739 5583). 
 
Document WT/TRP/G/152 contains the policy statement submitted by  Tunisia. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Tunisia. Tunisia WT/TPR/S/152 
 Page iii 
 
 
CONTENTS 
Page 
SUMMARY OBSERVATIONS vii 
(1) E CONOMIC ENVIRONMENT  vii 
(2) T RADE AND INVESTMENT REGIMES  vii 
(3) T RADE POLICY INSTRUMENTS  viii 
(4) S ECTORAL POLICIES  ix 
(5) T RADE POLICY AND TRADING PARTNERS  x 
I. ECONOMIC ENVIRONMENT 1  
(1) MAIN FEATURES OF THE ECONOMY  1  
(2) RECENT ECONOMIC DEVELOPMENTS  3  
(3) TRADE PERFORMANCE AND INVESTMENT  6  
 (i)  Trade in goods and services 7  
 (ii)  Investment 11  
(4) OUTLOOK  11 
II. TRADE AND INVESTMENT REGIMES 12  
(1) INSTITUTIONAL FRAMEWORK  12  
(2) POLICY FORMULATION AND IMPLEMENTATION  13  
(3) POLICY OBJECTIVES  16  
(4) MAIN LAWS AND REGULATIONS  16  
(5) TRADE AGREEMENTS AND ARRANGEMENTS  17  
 (i)  World Trade Organization (WTO) 18  
 (ii)  Association Agreement with  the European Union 19  
 (iii)  Greater Arab Free Trade Area (GAFTA) 20  
 (iv)  Arab-Mediterranean Free Trade Agr eement ("Agadir Agreement") 20  
 (v)  Free Trade Agreement with EFTA 21  
 (vi)  Other agreements and arrangements 21  
(6) INVESTMENT REGIME  22 
III. TRADE POLICIES AND PRACTICES, BY MEASURE 24  
(1) INTRODUCTION  24  
(2) MEASURES DIRECTLY AFFECTING IMPORTS  24  
 (i)  Customs procedures 24  
 (ii)  Customs duties 27  
 (iii)  Tariff preferences 34  
 (iv)  Other duties and taxes 35  
 (v)  Exemptions from duties and taxes 37  
 (vi)  Rules of origin 38  
 (vii)  Import prohibitions and other restrictions 39  
 (viii) Contingency trade measures 41 
 (ix)  Standards and other technical regulations 42 
 (x)  Government procurement 51  
 (xi)  Local content requirements 53  
 (xii)  Other measures 53  WT/TPR/S/152 Trade Policy Review 
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(3) MEASURES DIRECTLY AFFECTING EXPORTS  54  
 (i)  Procedures 54  
 (ii)  Export taxes 55  
 (iii)  Export prohibitions, licences and controls 55  
 (iv)  Subsidies and other tariff and fiscal benefits 56  
 (v)  Export credits, insurance and guarantees 57  
 (vi)  Export promotion and marketing support 57  
(4) MEASURES AFFECTING PRODUCTION AND TRADE  58  
 (i)  Incentives 58  
 (ii)  Competition policy and price regulation 59  
 (iii)  State-owned enterprises 62  
 (iv)  Intellectual property rights 66 
IV. ANALYSIS OF TRADE POLICY AND PRACTICE, BY SECTOR 70  
(1) INTRODUCTION  70  
(2) AGRICULTURE AND RELATED ACTIVITIES  70  
 (i)  General 70  
 (ii)  Agricultural policy 73  
 (iii)  Policy by principal type of product 77  
(3) MINES AND ENERGY  81  
 (i)  Principal mineral resources 81  
 (ii)  Mining policy 82  
 (iii)  Electricity 83  
(4) MANUFACTURING SECTOR  84  
 (i)  Textiles and leather 85  
 (ii)  Mechanical and electrical engineering industries 86  
 (iii)  Automotive industry 87  
 (iv)  Pharmaceuticals and other chemical products 88  
(5) SERVICES  89 
 (i)  Tourism 90  
 (ii)  Telecommunications 92  
 (iii)  Postal services 94  
 (iv)  Transport 94  
 (v)  Financial services 100  
 (vi)  Professional services 104 
REFERENCES 107 
APPENDIX TABLES 109 
 Tunisia WT/TPR/S/152 
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CHARTS 
 
I. ECONOMIC ENVIRONMENT  
 
I.1 Rate of growth of GDP and per capita GDP, 1995-2004 1 
I.2 Structure of merchandise trade, 1995-2004 8 I.3 Destination and origin of merchandise trade, 1995 and 2004 10 
II. TRADE AND INVESTMENT REGIMES  
 II.1 Principal entities involved in the formation of trade and investment policies 15 
III. TRADE POLICIES AND PRACTICES, BY MEASURE 
 III.1 Tariff bindings, by product category, 2004 29 
III.2 Distribution of applied MFN tariffs, 2005 31 
III.3 Distribution of MFN tariffs, 2005 33 III.4 Tariff escalation, 2005 34 
III.5 Principal sources of revenue, 2003 36 
III.6 Technical import controls, by HS Section, 2004 46 
III.7 Distribution of public contracts awarded during 1999-2003 52 
IV. ANALYSIS OF TRADE POLICY AND PRACTICE, BY SECTOR  
 
IV.1 MFN customs duties on agricultural products, by HS chapter, 2005 74 
IV.2 Tourism indicators, 1994-2003 91 IV.3 Shares of Tunisian ma ritime traffic, 1992-2005 96 
 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT  
 
I.1 Main socio-economic data, 1994 and 2004 2 
I.2 Economic indicators, 2000-2005 4 I.3 Balance of payments, 1998-2004 7 
II. TRADE AND INVESTMENT REGIMES  
 II.1 Main trade and investment legislation, June 2005 16 
III. TRADE POLICIES AND PRACTICES, BY MEASURE 
 
III.1 Structure of MFN duties applied by Tunisia, 1994, 2004, and 2005 30 
III.2 Brief analysis of the tariff, 1994, 2004, and 2005 31 III.3 Other duties and taxes, 1994, 2004 and 2005 35 
III.4 Value Added Tax 37 
III.5 Products excluded from the free importation regime, 1994 and 2005 40 III.6 Products subject to systematic import controls (List A) 47 
III.7 Benefits accorded to export enterprises under each regime, 2005 55 
III.8 Goods and services at controlled prices 60 III.9 Cost trends for the Caisse générale de compensation , 1999-2004 60 
III.10 Cases dealt with by the Competition Council, 2004-2005 62 WT/TPR/S/152 Trade Policy Review 
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III.11 State-owned enterprises, December 2004 62 
IV. ANALYSIS OF TRADE POLICY AND PRACTICE, BY SECTOR  
 
IV.1 Principal agricultural products, 1998-2004 72 IV.2 Imports under tariff quotas, 2001-2004, and customs duty rates, 2005 75 
IV.3 Export subsidies, 2001 and 2002 76 
IV.4 Electricity generation, 2000-2004 84 IV.5 Manufactures:  production and trade, 1994, 2000 and 2004 85 
IV.6 Telecommunications, 1995, 2000 and 2002-2005 93 
IV.7 Port traffic, 1995 and 2000-2004 95 IV.8 Air transport, 2000-2004 99 
 
 
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT  
 
AI.1 Structure of exports, 1995-2004 111 
AI.2 Structure of imports, 1995-2004 112 
AI.3 Origin of imports, 1995-2004 114 
A1.4 Destination of exports, 1995-2004 115 
II. TRADE AND INVESTMENT REGIMES  
 
AII.1 Notifications to the WTO, May 2005 116 
III. TRADE POLICIES AND PRACTICES, BY MEASURE 
 
AIII.1 Tariff lines the applied MFN rate of which is higher than the final bound rate, 2005 118 AIII.2 Import duties by HS Chapter, 2005 119 
IV. ANALYSIS OF TRADE POLICY AND PRACTICE, BY SECTOR  
 AIV.1 Applied MFN tariffs by ISIC Rev.2 category, 2005 121 
 
 Tunisia WT/TPR/S/152 
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SUMMARY OBSERVATIONS 
(1) E CONOMIC ENVIRONMENT  
1. The macroeconomic reforms 
introduced by Tunisia since the mid-80s have 
contributed to its good recent economic 
performance.  Since its last Trade Policy Review (TPR) in 1994, real GDP has grown by an annual average of 5 per cent; real per capita income has also progressed, reaching 
almost 2,300 euros in 2004.  Poverty has been 
significantly reduced.  Inflation has been contained;  it was 3.6 per cent in 2004.  The same applies to the budget deficit (about 2.6 per cent of GDP in 2004) and to the deficit on current account (2.1 per cent of GDP in 
2004).  However, the dinar is still not 
completely convertible and the unemployment rate remains high (about 14 per cent in 2004). 
2. The reforms have not substantially 
liberalized trade.  In fact, for more than 
30 years, the strategy pursued by Tunisia has 
consisted in promoting exports, especially manufactured goods, while heavily protecting enterprises that supply the local market.  This 
strategy has created a dualism within the economy, between an export sector whose 
competitiveness depends largely on 
concessions (including tax, customs and foreign exchange concessions) and a domestic sector that is still heavily protected (despite the opening up of bilateral trade in 
non-agricultural products under the 
Association Agreement with the European Union). 
3. In terms of contribution to GDP, 
services are the leading sector (over 60 per 
cent) followed by the manufacturing, 
agricultural, and mining and energy sectors.  In addition to textiles and clothing (one-fifth of the total value of exports of goods and services in 2003), Tunisia mainly exports tourism services and motor vehicle components.  It 
chiefly imports agri-food  products and inputs, 
partly for use in the manufacture of exports.  Nearly 70 per cent of its merchandise import trade, and 83  per cent of its export trade, is 
with the European Union. 4. The difficulties being experienced by 
the principal export industry, textiles and clothing, following the expiration of the WTO Agreement on Textiles and Clothing (ATC) 
have highlighted the need for new growth 
poles capable of generating jobs.  A highly trained labour force, the proximity of the European market and its social and institutional stability will doubtless enable 
Tunisia to develop its position as a production 
base for a good many multinational enterprises seeking to conquer the regional market, provided that the appropriate reforms are effectively implemented. 
(2) T
RADE AND INVESTMENT REGIMES  
5. In Tunisia, the broad outlines of trade 
policy are formulated through the preparation of five-year plans.  The Ministry of Trade and Crafts is responsible for coordinating this policy which it develops in collaboration with 
other institutions and government agencies; 
the private sector is also consulted.  At the same time, the proliferation of institutions involved in formulating trade policy has increased the risk of their activities overlapping, particularly where the promotion 
of exports and investment is concerned. 
6. Tunisia has been a member of the 
GATT since 1990, and is an original member of the WTO.  It accords at least most favoured nation (MFN) treatment to all its trading 
partners.  Tunisia has not signed any of the 
plurilateral agreements concluded under the WTO; neither is it a signatory to the Information Technology Agreement or the Pharmaceutical Understanding.  Within the 
multilateral  trading system, Tunisia takes the 
view that rules oriented toward economic development should facilitate the integration of developing countries and help to eliminate poverty.  It therefore proposes that special and differential treatment be strengthened in order 
to ensure better access  to developed-country 
markets for goods and services originating in the developing countries.  Tunisia also urges the facilitation of the international movement of natural persons. WT/TPR/S/152 Trade Policy Review 
Page viii 
 
 
7. Tunisia has signed several regional 
preferential trade agreements, including the Association Agreement with the European Union, the Agreement on the Greater Arab 
Free Trade Area (GAFTA), the Arab-
Mediterranean Free Trade Agreement, the Free Trade Agreement with EFTA, the Maghreb Arab Union Agreement, and bilateral agreements.  These agreements differ 
with respect to geographical coverage, trade 
liberalization programmes, implementation periods, trade policy instruments and their objectives. Some of them overlap.  Consequently, Tunisia's trading partners have market access which diff ers according to the 
agreement to which they are party and its 
degree of implementation; those which are party to several agreements can trade with Tunisia under any of them.  The same applies to Tunisian exports to these markets.  Apart 
from the cost in human resources, this 
situation could distort trade and preferences, in an unpredictable way, and lead Tunisia to enter into mutually in compatible commitments. 
8. The investment regime aims to be 
generally liberal, particularly in relation to 
export activities.  Concessions are selectively 
granted in order to encourage investment in activities considered to have priority or to support enterprises in difficulty. 
(3) T
RADE POLICY INSTRUMENTS  
9. Since 2001, Tunisian Customs has 
been carrying out reforms to simplify import procedures, with special emphasis on documentation and the implementation of the 
WTO Agreement on Customs Valuation.  
However, technical import inspection  
procedures remain lengthy and complex and constitute one of the main factors responsible for delaying the clearance of goods.  A start 
was made on reforming these procedures at 
the end of 2004. 
10. The heavy MFN tariff protection of the 
domestic market has changed only slightly in the course of the last 10 years.  The simple 
average of the MFN tariffs applied by Tunisia 
in 2005 is 32 per cent, compared with 33 per cent in 2004 and 31 per cent in 1994.  The 
average duty on agricultural products (WTO definition) is 67 per cent, with a maximum rate of 150 per cent; the average duty on non-
agricultural products is 23 per cent.  The 
modal rate (that most frequently applied) is 43 per cent, and products corresponding to 15 per cent of tariff lines are admitted duty-free.  Overall, the tariff is characterized by 
mixed escalation, with ra w materials protected 
by average rates much higher than those for other categories of products. 
11. Less than two-thirds of the Tunisian 
tariff is bound in the WTO, often at ceiling rates of as high as 200 per cent, with a global 
average of 65.5 per cent.  Some 50 applied 
rates are higher than the bindings.  The other duties and taxes are bound for certain products. 
12. Under the Association Agreement, the 
tariffs on non-agricultural products 
originating in the European Union (EU) have been substantially lowered; this has made it possible to reduce the average preferential tariff applied to imports originating in the EU to 18 per cent in 2005, or 64 per cent on 
agricultural products and 6.3 per cent on 
other products.  Moreov er, all imports from 
the 16 other members of the Greater Arab Free Trade Area have been admitted completely duty-free since January 2005. 
13. In addition to customs duties, a series 
of other internal duties and taxes are applied to domestic products and imports, including a 
consumption tax which c an be as high as over 
350 per cent on certain motor vehicles or 
almost 700 per cent on wines and other 
alcoholic beverages, and a value added tax at rates of zero, 6, 10, 18 and 29 per cent, with numerous exemptions.  Since 2003, the basis of assessment of VAT has been increased by 25 per cent for many imports. 
14. Quantitative import restrictions 
imposed for trade reasons, of which there were many at the time of Tunisia's last TPR, have been largely remove d.  So far, Tunisia 
has not taken any countervailing, anti-Tunisia WT/TPR/S/152 
 Page ix 
 
 
dumping or safeguard measures.  However, in 
2004, some products were placed under pre-importation surveillance. 
15. A whole range of concessions, in the 
form of transport cost subsidies, tax 
exemptions, facilitated Customs procedures, and freedom from foreign exchange controls are available to exporters.  These benefits are provided for in several different pieces of 
legislation, under the "wholly" or "partially" 
exporting, "resident" or "non-resident" enterprise regimes. 
16. Although a privatization programme 
has been in the process of implementation since 1994, the State still maintains a strong 
presence in economic activities.  Some 
important sectors of the economy are still controlled by the State through monopolies or exclusive production, distribution or international trading rights.  The value added 
for state-owned enterprises is about 13 per 
cent of GDP; state trading enterprises are responsible for approximately 16 per cent of merchandise imports. 
17. Public contracts are generally 
awarded by national (54 per cent of the total 
value of the contracts awarded between 1993 
and 2003) or international (26 per cent) invitation to tender.  A 10 per cent preference on prices is granted to Tunisian products and services.  The competition legislation has been 
gradually  modernized with a view to 
combating anti-competitive practices, and a Competition Council has been established for this purpose.  However, the heavy regulation of the domestic market and the smallness of 
the economy limit competiti on in many sectors.  
The Tunisian intellectual property legislation has also been amended during the last 10 years to take into account the provisions of the WTO's TRIPS Agreement.  In general, Tunisia applies the principle of international 
exhaustion in the field of intellectual property 
rights. (4) S
ECTORAL POLICIES  
18. Tunisia is one of the world's largest 
exporters of olive oil, dates and "harissa".  It remains a net importer of agricultural 
products, for the most part cereals, edible oils 
and sugar, mainly impor ted by State trading 
organizations.  High out-of-quota duties (up to 150 per cent, with an average of about 62 per cent) are applied to most imported 
agricultural products (ISIC, Rev. 2 definition) 
that compete with goods of domestic origin. In general, these measures are aimed at self-sufficiency, perceived as a means of supporting rural incomes. Exports of agri-food products are encouraged by subsidizing some 
of the transport costs. 
19. The mining and energy sector is still 
not very open to competition, despite customs 
duties (on average 13.6 per cent, with a 
maximum of 43 per cent) lower than in other sectors.  In particular, the production and distribution of water, electricity, crude oil, natural gas and petroleum products remain largely dominated by State monopolies. 
20. In general, the mixed escalation of the 
Tunisian tariff – rather than a tariff structure based on low and uniform rates – does not encourage the processing of local (heavily protected) raw materials for export.  
Consequently, exports consist primarily of 
subcontracted products (which benefit from preferential access and the proximity of the European market), with a high imported input content.  This applies to the textiles and clothing and motor vehicle component 
industries.  In the particular case of the 
textiles and clothing industry, a substantial adjustment is now necessary, since Tunisia is faced with losing part of its share of the European market, protected up until 2004 by 
import quotas under the ATC.  Other 
industries, including the pharmaceutical industry, operate on the import substitution model.  MFN customs duties in the manufacturing sector average 30 per cent, 
with rates extending up to 150 per cent. WT/TPR/S/152 Trade Policy Review 
Page x 
 
 
21. A country with a large pool of 
relatively cheap skilled labour, generally speaking, Tunisia has a comparative advantage in the provision of services 
intensive in this factor.  Tourism activities, 
which are open to foreign participation, play a key role in the Tunisian economy and represent one of the main sources of foreign exchange.  To an increasing extent, Tunisia is 
exporting auditing and engineering services, 
information technology services, and health and wellbeing services.  Nevertheless, infrastructure services remain dominated by public corporations and, in general, are not very open to competition.  The situation is 
having adverse knock-on effects on the 
competitiveness of other sectors. 
22. Restructuring and liberalization 
reforms have been or are being carried out in the transport and banking sub-sectors and in 
telecommunications services, where the 
historical operator still retains a monopoly on fixed telephony services.  Under the GATS, Tunisia has entered into commitments concerning, in particular, financial, tourism and telecommunications services, mainly by 
binding measures affecting consumption 
abroad and commercial presence.  Its "horizontal" commitments relate to engagement in commercial activities, investments with majority foreign 
participation, the presence of natural persons, 
and foreign exchange controls. 
(5) T
RADE POLICY AND TRADING 
PARTNERS  
23. In addition to participating in the 
multilateral trading system, Tunisia also 
participates in several preferential trade agreements in order to promote its exports.  These agreements have considerably liberalized the trade between Tunisia and its main partners, in particular, the EU.  
However, its simultaneous participation in several agreements, some of which overlap or 
conflict with each other, adds to the complexity of Tunisia's trade regime.  
24. The limits of the dual strategy of 
export promotion and import substitution, 
adopted by Tunisia in order fully to exploit its preferential access to the European market, have become increasingly obvious, especially since the expiration of the ATC.  Aware of the 
need for reforms aimed at breaking down the 
dualism created within the economy by this strategy, Tunisia is in the process of investigating suitable adjustments.  These reforms should result in the rationalization of the concessions currently available to exports 
and allow for a better allocation of resources. 
25. The elimination or reduction of tax 
incentives presupposes a rationalization of the tax system, so as to make it better reflect the structure of the economy and enable Tunisia to 
exploit its comparative advantages to better 
effect.  Tariff reforms (in particular, the simplification of the tariff structure and the reduction of duty rates) should enable Tunisia to adhere more closely to the principles of the WTO.  An extension of Tunisia's multilateral 
tariff commitments to other categories of non-
agricultural products and a reduction in bound rates, so as to bring them more closely into line with the applied tariffs, should make its trade regime more transparent and 
predictable.  In conjunction with the 
continuation of structural reforms, these adjustments should attract more investment.  Trading partners could contribute to the success of the reforms by  facilitating access to 
their markets for goods and services of interest 
to Tunisia.