WT/TPR/S/152 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIMES 
(1) INSTITUTIONAL FRAMEWORK  
1. The Republic of Tunisia was established in July 1957, shortly after the country became 
independent.  The Constitution of 1 959, as amended, is based on the pr inciple of the sovereignty of 
the people and the separation of powers.1  The President of the Republic is the Head of State.  He is 
elected by universal suffrage for a renewable term of five years.  The President of the Republic appoints the Prime Minister and the other member s of the Government and presides over the Council 
of Ministers.  The Government is responsible to  the President;  however, the Chamber of Deputies 
may, by a two-thirds majority, adopt a motion of censure, in which case th e President must either 
dismiss the Government or dissolve the Chamber of Deputies. 
2. There have been six constitutional amendments since Tunisia's last Trade Policy Review in 
1994.
2  One of the main changes was the introduction, in 2002, of a bicameral legislative system (to 
be installed in June 2005) comprising both a Ch amber of Deputies (Majlis al-Nuwaab) and a Chamber 
of Counsellors (Majlis al-Mustasharin).3  A Constitutional Council4 was created in 2002 and given 
responsibility for ensuring that legislative elections  and referenda are properl y conducted and that all 
laws are constitutional.  Other constitutional amendmen ts deal with political rights, other fundamental 
human rights, and the election of the President of the Republic. 
3. The Chamber of Deputies has 189 members elected for a five-year term by direct and secret 
universal suffrage.  Of these, 152 are directly elected in 26 electoral districts by a simple-majority party list system – all the seats reserved for each district going to the list which obtains the most votes, 
on the basis of one seat per 60 000 inhab itants.  The other 37 seats are allocated pro rata  to the losing 
lists.
5  
4. The Chamber of Counsellors has a maximum memb ership equal to two thirds of the number 
of members of the Chamber of Deputies.  The members elected at regional level from among those 
elected to local authority bodies are divided up as follows:  one member for each governorate with a 
population of less than 250 000, and two for each gov ernorate with a population of 250 000 or more.  
One third of the members of th e Chamber are elected nationally, in three groups of equal size 
representing employers, farmers and workers, resp ectively.  Candidates are proposed by the trade 
associations and unions concerned.  The President of the Republic appoints the remaining members of 
the Chamber of Counsellors from among people prominen t in public life or expert in various fields. 
5. The judicial system comprises the courts of or dinary law (commune c ourts, courts of first 
instance and appeal courts) and the special cour ts (administrative courts, commercial courts, 
commercial appeal courts and the Supreme Court).  The commercial courts have jurisdiction over all 
                                                      
1 Constitution of the Tunisian Republic.  Availabl e at:  http://www.jurisitetunisie.com/tunisie/ 
codes/constitution/const1010p.htm.  This Internet site  also contains most of Tunisia's legislation. 
2 Law No. 95-90 on the Constitutional Council;  Law No. 97-65 amending and supplementing certain 
articles of the Constitution;  Law No. 98-76 amending th e first paragraph of Article 75 of the Constitution;  
Law No. 99-52 derogating from the third subparagraph of Article 40 of the Constitution;  Law No. 2002-51 amending certain articles of the Constitution;  and Law No. 2003-34 derogating from the third subparagraph of  
Article 40 of the Constitution. 
3 "Code électoral ".  Available at:  http://www.jurisitetunisie.com/tunisie/codes/celect/cel1086.htm. 
4 "Conseil constitutionnel ".  Available at:  http://www.jurisitetunisie.com/tunisie/codes/const/ 
menu.html. 
5 "Tunisie: élections et Parlement ".  Available at:  http://www.medea.be/index.html?page= 
2&lang=fr&doc=199. Tunisia WT/TPR/S/152 
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commercial disputes, including those relating to in tellectual property.  Articles 197 to 309 of the 
Customs Code deal with disputes and provide for the po ssibility of appeal to the courts.  In particular, 
Article 237 stipulates that the rules in force concer ning appeals on points of law in civil and criminal 
cases are applicable to Customs disputes. 
6. The Court of Auditors is the institution responsib le for monitoring Tunisian public finances.  
Its task is to oversee the implementation of the Finance Acts and to assess the management of the 
organizations under its supervision.  Its chairman is appointed by the President of the Republic and its 
budget is linked with that of the Prime Minister.  The Court reports directly to the President of the Republic and to the Chamber of Deputies.
6  Its reports are published in the Official Journal, in 
summary form only.7 
7. The Economic and Social Council is a consultativ e body which can be asked to consider any 
draft economic or social legislation.8  The Government, as well as the chambers, may consult the 
Council, which may also, on its own initiative, gi ve opinions and make su ggestions on any matter 
within its competence. 
(2) POLICY FORMULATION AND IMPLEMENTATION  
8. The more important economic decisions must be incorporated in a law passed by the 
Chamber of Deputies and, since June 2005, by the Ch amber of Counsellors as well.  These include, in 
particular, the annual budget (Finance Act), th e currency issuing regime, development plans, 
international trade treaties, and government borrowings and other fi nancial commitments.9  D r a f t  
legislation is generally brought fo rward on the initiative of the Presiden t but may also be originated by 
deputies;  it is examined by the Council of Mi nisters before being submitted to Parliament.  
Legislation passed by the Chambers goes to the Pr esident for enactment and implementation.  The 
President may return draft legislation for a second r eading in the chambers, which may, by confirming 
their previous vote by a two thirds majority of th eir respective members, oblige the President to enact 
the law.  Otherwise, the draft legislation is withdr awn or suitably amended.  Once enacted, the law is 
published in the Official Journal, and then  enters into force on the date prescribed. 
9. The broad outlines of Tunisia's economic and social development are set out in a series of 
five-year development plans;  the Tenth Plan ends in 2006.  The plan lays down the objectives of macroeconomic (growth of GDP, employment, inv estment, savings, external accounts) and sectoral 
(production, investment, exports) development and establishes social development programmes 
(education, social security).  However, the Tunisi an plan has no binding force.  The planning process 
is based on collaboration between the Government, the economic and social partners, civil society, the 
representatives of the regions, the state-owned enterp rises and the private sector, often represented by 
trade associations such as the Union tunisienne pour l'industr ie, le commerce et l'artisanat  (UTICA –  
Tunisian Industry, Trade and Handicrafts Union) and the Union tunisienne de l'agriculture et de la 
pêche  (UTAP – Tunisian Agriculture and Fishery Union) , and the research institutes.  The preparation 
of the plan, which often takes more than two y ears, is entrusted to three types of committees 
composed of representatives of the government, em ployers and labour.  Coordination is ensured by 
the Higher Council of the Plan presided over by th e President of the Republic.  The Ministry of 
                                                     
 
6 International Monetary Fund (1999). 
 7 Official Journal of 25 February 2005, availabl e at:  http://www.cnudst.rn rt.tn/wwwisis/jort.03/ 
form.htm. 
8 Law No. 61-23 of 28 June 1961. 
9 With regard to the finance acts and tax laws and regulations, the President has certain discretionary 
powers in relation to the tax base, tax rates, and tax collection procedure (Article 34 of the Constitution, see, in particular, Chapter III(2)(v)). WT/TPR/S/152 Trade Policy Review 
Page 14 
 
 
Development and International Cooperation (MDCI) compiles all th e documentation and reports to 
the Higher Council.  The draft Plan is adopted by the Chamber of Deputies in  the same way as draft 
legislation.  The Plan is implemented by mean s of annual economic budgets which evaluate any new 
social or economic developments and est ablish programmes for the following year. 
10. As trade policy is part of macroeconomic polic y, its broad outlines are formulated in the 
process of preparing the plan.  A number of ministries participate in the formulation of trade policy (Chart II.1).  The task of the Ministry of Trade and Crafts is to draw up and implement government 
policy in the areas relating to trade, crafts, cons umer protection, economic and trade cooperation, 
small businesses, and trade-related services.  The Mini stry of Trade is also responsible for relations 
with the WTO and related matters.  The financial aspects of external trade are the concern of the 
Ministry of Finance, in cooperation with the Central Bank of Tunisia (BCT);  this ministry is also responsible for budgetary and fiscal matters, as well as for the customs administration.  Other 
ministries also have an interest in trade policy, in particular, the Ministry of Agriculture and the 
Ministry of Industry, Energy, and SMEs.  The MDIC plays a key role in the formulation of FDI policy. 
11. The National Foreign Trade Council was set up in  1994 to advise the Minister responsible for 
trade on export promotion strategy and trade policy in general;  it monitors trade measures and draws 
up programmes for fairs and other events.  It brings together the directors general of all the competent 
ministries and public institutions and representatives of  trade associations such as UTICA and UTAP.  
The Council meets at least twice a year under the chai rmanship of the Minister for Trade.  The Higher 
Export and Investment Council (CSEI) is respons ible, in particular, for setting objectives and 
formulating strategy in these areas and evaluating and monitoring the results.  The CSEI meets once a 
year.  It consists of the ministries concerned (Chart II.1), the chairman of UTICA, the chairman of UTAP and the chairman of the Union générale des tr availleurs tunisiens  (General Union of Tunisian 
Workers). 
 Tunisia WT/TPR/S/152 
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Chart II.1
Principal entities involved in  the formulation of trade
and investment policies
Source: Information provided by the Tunisian authorities.UTICA (Tunisian  Industry, Trade and Handicrafts Union)
UTAP (Tunisian  Agriculture and Fishery Union)
 Consultative
bodiesEconomic and Social Council
Higher Export and Investment CouncilNational Foreign Trade CouncilPublic
sector
Ministry  of Agriculture and Water Resources
Ministry of Transport
Central Bank  of TunisiaMinistry of Trade and CraftsOffice of the President
Ministry of Development and International Cooperation
Ministry of Industry, Energy and SMEs
Ministry of Communication Technologies
Ministry of TourismMinistry of FinanceSecretariat of State for PrivatizationOffice of the Prime Minister
Tunisian Federation of Travel Agencies
Tunisian Federation of the Hotel IndustryPrivate sector
 WT/TPR/S/152 Trade Policy Review 
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(3) POLICY OBJECTIVES  
12. Job creation is undoubtedly the fundamental objec tive of Tunisian economic policy.  Another 
aim is the fair distribution of the fruits of deve lopment among the various social groups, regions and 
generations.  Since the early 80s, export promotion has been regarded as the best means of creating 
jobs and raising living standards.  The promotion of  private direct investment, through privatization, 
concessions and facilitation of the procedures for esta blishing businesses, is a Government priority.  
The priority sectors are manufacturing and tourism.  The objectives of agricultural policy are food security and self-sufficiency and social stability.  In the area of services, traditionally reserved for 
nationals or the Tunisian State, more and mo re activities are in process of being gradually 
incorporated into Tunisia's export promotion strategy. 
13. After having been the engine of the Tunisian  economy during the 80s and 90s, manufactured 
exports have recently seen their real growth rate diminish.  Despite the promotion measures adopted, 
the Tunisian economy has been facing increased worl d competition in its main export sector – textiles 
and clothing – and in its principal market – the Eu ropean Union – following th e decision, within the 
context of the WTO, to abolish import quotas for th ese products altogether by 2004.  Tunisia has now 
begun to consider ways of safeguarding the sector 's exports and increasing the share of other more 
dynamic sectors, such as the electronics industry, ag ri-food, and services, especially those related to 
the new information and communications technologi es, as well as transport, financial, health, 
education and training, and environmental services. 
(4) M
AIN LAWS AND REGULATIONS  
14. The Constitution is Tunisia's supreme law.  Th e other legal instruments are, in decreasing 
order of precedence and importance, laws, decree-laws , decrees, orders, and notices.  Once ratified by 
Tunisia, all treaties take precedence over national la ws.  The WTO Agreements form an integral part 
of Tunisian domestic law by virtue of Law No.  95-06 of 23 January 1995 ratifying the results of the 
Uruguay Round.  Consequently, these agreements can be  invoked directly in the Tunisian courts, even 
in the absence of an implementing provision. 
15. The main legislation affecting international trad e and investment is summarized in Table II.1.  
This legislation is described below in the various sections of Chapters III and IV.  For example, Law 
No.  94-41 authorizes the Ministry of Trade to restrict merchandise imports and exports.  The Customs Code contains all the provisions of inte rest to customs, including those relating to the 
customs tariff, customs valuation, clearance fo rmalities, tariff concessions, drawback, customs 
warehousing procedures, and customs regulations and administration.  It is supplemented by various 
decrees and orders concerning matters such as countervailing and anti-dumping duties, temporary 
admission formalities and the economic activity pa rk (industrial estate) programme.  Current 
payments have been liberalized since 1993;  the Fo reign Exchange and External Trade Code includes 
provisions restricting the export of capital (Chapter I). 
Table II.1 
Main trade and investment legislation, June 2005  
Title and/or field Text of law Date of last amendment, entry 
into force 
Customs Code Order of 29 December 1955 29 December 1955 
Customs valuation Law No.  2001-92 7 August 2001 
Tariff Law No.  89-113 31 December 2004 
Import and export prohibit ions, licences and controls Law No.  94-41  7 March 1994 
Commercial Code Law No.  59-129 3 November 2000 
Table II.1 (cont'd)  Tunisia WT/TPR/S/152 
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Title and/or field Text of law Date of last amendment, entry 
into force 
Exercise of commercial activities (by foreigners) Decree-Law 61-14 30 August 1961 
Foreign Exchange and Extern al Trade Code (foreign 
exchange regime) Law No.  93-48 3 May 1993 
VAT Law No.  88-61 31 December 2004 
Investment Incentives Code Law No.  93-120 27 December 1993 
Measures directly affecting imports Decree No.  2004-7 5 January 2004 
Unfair import practices (a nti-dumping and countervailing 
duty measures) Law No.  99-9 
Decree No.  2000-477 13 February 1999 
21 February 2000 
Safeguard measures  Law No.  98-106  18 December 1998 
Standards Various legal instruments n.a. 
Sanitary and phytosa nitary measures Various legal instruments  n.a. 
Export prohibitions, licences and controls Decree No.  94-1743  29 August 1994 
Competition policy Law No.  91-64 11 November 2003 
Trademarks  Law No.  2001-36  17 April 2001 
Geographical indications Law No.  99-57  28 June 1999 
Industrial designs Law No.  2001-21 6 February 2001 
Patents Law No.  2000-84  24 August 2000 
New plant varieties Law No.  99-42  10 May 1999 
Topographies of integrated circuits Law No.  2001-20  6 February 2001 
Copyright Law No.  94-36 24 February 1994 
Agriculture (WTO Agreement – tariff quotas) Decree No.  96-1119 10 June 1996 
Mining Code Law No.  2003-30  28 April 2003 
Hydrocarbons Code Law No.  99-93  17 August 1999 
Telecommunications Code Law No.  95-36 
Law No.  2004-30  17 April 1995 
5 April 2004 
Postal services Law No.  98-38   2 June 1998 
Land transport Law No.  2001-67  
Law No.  98-21 
Law No.  2004-33   10 July 2001 
19 April 2004 
14 October 2004 
Air transport Law No.  2004-57 12 July 2004 
Maritime Trade Code Law No.  62-13 16 March 1998 
Commercial Seaport Code Law No.  99-25 18 March 1999 
Insurance Code Law No.  2002-37 1 April 2002 
Banks Law No.  99-92 
Law No.  85-108 17 August 1999 
6 December 1985 
Accounting services Law No.  2004-0088 
Law No.  88-108 
Law No.  2001-91 31 December 2004 
18 August 1988 
7 August 2001 
n.a. Not applicable. 
Source:  Information provided by the Tunisian  authorities and Official Journal  of the Tunisian Republic, available at:  
http://www.cnudst.rnrt.tn/ wwwisis/jort.03/form.htm. 
(5) TRADE AGREEMENTS AND ARRANGEMENTS  
16. Tunisia has concluded trade agreements with a bout 60 countries, some of which provide for 
preferential trade arrangements.10  Since its last TPR in 1994, Tunisia has signed some particularly 
important agreements, including the WTO Agreement,  the bilateral Agreement with the EU, bilateral 
and plurilateral agreements with the members of the Arab League, and an agreement with Turkey. 
                                                      
10 The Ministry of Trade site contains a list of most  of Tunisia's trade agreem ents (Ministry of Trade, 
on-line information. Available at: http ://www.infocommerce.gov.tn/indexfr.htm). WT/TPR/S/152 Trade Policy Review 
Page 18 
 
 
(i) World Trade Organization (WTO) 
17. Tunisia is an original Member of the WTO and grants at least MFN treatment to all its trading 
partners.  It is not party to any of the plurilate ral agreements concluded under WTO auspices.  Tunisia 
has not participated in the Information Technolog y Agreement and has not signed the Pharmaceutical 
Understanding.  As of April 2005, Tunisia had not been directly involved, as complainant or 
defendant, in any trade dispute settlement proceeding. 
18. Tunisia has fulfilled most of its WTO notification obligations (Table A II.1).  The missing 
notifications relate mainly to agriculture (aft er 2001 for export subsidies and 2002 for domestic 
support);  import licences (after 2002);  other quantit ative import restrictions (after 2001);  subsidy 
programmes (after 2001);  and state trading (after 2002). 
19. At the Doha (2001)11 and Cancun (2003)12 Ministerial Conferences, Tunisia stressed the need 
for globalization to be managed on the basis of fa ir rules and a more consistent commitment to 
development on the part of the international commun ity.  A rules-based multilateral trading system as 
a vehicle of economic development must, according to Tunisia, work for the integration of the 
developing countries (DCs) and help eliminate pov erty.  The provisions concerning DCs should be 
adapted to their actual capacity to implement th em.  Special and differential treatment remained, 
according to Tunisia, a fundamental principle of the multilateral trading system, but the rules should be strengthened to allow DCs to participate more fu lly in international trade.  Tunisia stressed the 
need for a negotiating programme that enabled a ll DCs to obtain better access to developed country 
markets. 
20. Tunisia has emphasized the special economic and social importance of the agricultural sector 
for the DCs and least-developed countries (LDCs).  It recommends arrangements that would make it 
possible to support small farmers so as to preven t small-scale agriculture from being adversely 
affected by trade liberalization.  Tunisia has also  called for the scaling back of support measures that 
are distorting agricultural trade and hindering the development of agriculture in the DCs. 
21. Tunisia considers that greater attention should al so be paid to those countries, such as itself, 
that are net food importers, in case the reduction in  export subsidies were to aggravate the adverse 
effects of liberalization on the food bill, th e current food aid arrangements no longer being 
appropriate.  Accordingly, Tunisia has called for the establishment of the special short-term food 
financing facility designed to implement the Marrak esh Ministerial Decision in favour of the LDCs 
and net food-importing developing countries.
13  
22. With regard to non-agricultural market access,  the elimination of tariff peaks and tariff 
escalation is, according to Tunisia, crucial for ensu ring improved access to export markets.  However, 
Tunisia fears that the proposals aimed at the total and sectoral dismantling of customs duties would deprive it of substantial export revenue by open ing up the markets of its preferential partners 
(preferential destinations for its products) to gr eater competition.  Tunisia has welcomed the WTO 
Declaration on Intellectual Property and Public Health .  Nevertheless, it considers that there are other 
diseases that threaten human health and lives and that  these also warrant special attention from the 
international community.  In Tunisia, the importation of pharmaceuticals is a state monopoly (Chapter IV (4) (iv)). 
                                                     
 
11 Statement by H.E. Mr Tahar Si oud, Minister for Trade.  WTO document WT/MIN(01)/ST/92, 
11 November 2001. 
12 Statement by H.E. Mr Mohsen Laroui, Secretary of  State to the Ministry of Tourism, Trade and 
Crafts, responsible for trade.  WTO document WT/MIN(03)/ST/125, 11 September 2003. 
13 WTO document G/AG/W/49/Add.1, 23 May 2001. Tunisia WT/TPR/S/152 
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23. In the area of services, Tunisia has asked its trading partners for the mutual recognition of 
diplomas and professional qualifications and improve d market access through liberalization of the 
movement of natural persons and the facilitation of travel.  Tunisia has a pool of human resources 
with recognized skills in professional and business se rvices.  Services are mainly exported under sub-
contracting arrangements with European enterprises or within the context of international financing 
granted to developing countries.  However, the authorities have pointed out that the numerous obstacles to obtaining visas make the potential for exporting to the developed countries difficult to realize.  These obstacles include, inter alia , the large number of documents to be provided, the 
waiting times, the high cost of visas and the po licy of non-reimbursement in the event of an 
application being refused, the non-transparent criteri a, the need in some c ases for sponsorship by 
professional organizations, and the refusal to gran t visas for the personnel of enterprises that have 
obtained contracts to supply services (an essentia l component of their competitiveness) and for 
international road transport workers.  Moreover, th e time requirements and other conditions relating to 
the granting of residence permits are particularly  restrictive and foreign providers of professional 
services often have to re-sit examinations and tests in order to be able to practice. 
(ii) Association Agreement with the European Union 
24. In July 1995, within the context of the Barcel ona Declaration, one of whose main objectives 
is the establishment of a Euro-Mediterranean fr ee trade area by 2010, Tunisia signed a bilateral 
Association Agreement with the European Commun ities and their Member States.  The Agreement 
provides for the reciprocal liberalization of merchandise trade by 2008.
14  The prospect of duty-free 
admission of European products by 2008 has prompted reforms aimed at increasing the 
competitiveness of Tunisian products;  it has also led to an effort to harmonize trade regulations and 
procedures with the European Union, particularly in the customs field. 
25. The Association Agreement was ratified by T unisia on 20 June 1996.  It provides for duty-
free trade in most imported industrial products 12 years after its entry into force, i.e.  in 2008.  List 1 (12 per cent of the volume of imports from the EU in 1994) mainly covers capital goods and inputs, 
duties on which were dismantled in 1996.  List 2 also concerns products not produced locally, 
primarily raw materials and intermediate products (2 8 per cent of total Tunisian imports from the EU 
in 1994), which have been entering duty-free since 2001. 
26. Lists 3 and 4 consist of locally manufactured goods.  List 3 comprises products considered 
capable of facing up to outside competition.  In  this case protection will be removed over a 12-year 
transition period (1996-2007), with duty-free status  in 2008.  These products represented about 30 per 
cent of Tunisian imports from the EU in 1994.  Fi nally, list 4 also concerns industrial products 
manufactured locally, but in this case tariffs w ill be reduced over an 8-year period (2000-2007), 
following a 4-year transition period (1996-1999), with  duty-free status in 2008.  The products covered 
by this list accounted for 29 per cent of Tunisian imports from the EU in 1994. 
27. The Agreement also provides for the progressive  liberalization of certain agricultural and 
fishery products.  Thus, Protocols 1 and 2 provide  for tariff preferences for agricultural and fishery 
products originating in Tunisia, in particular, olive oil, meat, roses, cut flowers, spices, and fruit and 
vegetables (the latter only during sp ecified periods of the year), preserved fruit and vegetables, wine, 
                                                     
 
14 The Agreement was ratified by Law No. 96-49 of 20 June 1996.  It is available at: 
http://www.deltun.cec.eu. int/fr/eu_and_Tunisie/accord.pdf .  This Agreement was notif ied to the WTO in 1999 
(WTO document WT/REG69/N/1, 23 March 1999). WT/TPR/S/152 Trade Policy Review 
Page 20 
 
 
and preserved fish and crustaceans.15  Altogether, the volumes of certain preferential tariff quotas 
seem rather limited, only about 100 tonnes in some cas es.  According to the authorities, Tunisia has 
been able to fulfil them for the follo wing products:  olive oil, citrus fruit, fishery products, and dates.  
In 2000, further negotiations ended in the conclusi on of a new five-year agricultural protocol which 
began to be implemented in January 2001.  This  led to improved access for Tunisian products, 
including an increase in quotas, in particular for olive oil, where volume rose to 56 000 tonnes in 
2005, an extension of the market access periods and the introduction of a number of new products.  
For its part, Tunisia granted the EU, for the first time, preferential tariff quotas for cereals and sugar. 
28. The Agreement also contains non-tariff provisions.  It prohibits the maintenance of 
quantitative restrictions and measures having equiva lent effect on trade between Tunisia and the 
Community.  At the same time, Tunisia and th e EU reserve the right to take anti-dumping, 
countervailing and safeguard measures in their bila teral trade.  The parties also undertake to 
"progressively adjust, without affecting commitme nts made under the GATT, any state monopolies of 
a commercial character so as to ensure  that, by the end of the fifth y ear following the entry into force 
of this Agreement, no discrimination regarding th e conditions under which goods are procured and 
marketed exists between nationals of the Member St ates and of Tunisia".  Moreover, "any official aid 
which distorts or threatens to distort competiti on by favouring certain undertakings or the production 
of certain goods" will be incompatible with the Ag reement;  in this respect, Tunisia benefits from 
renewable transitional de rogations (Article 36). 
(iii) Greater Arab Free Trade Area (GAFTA) 
29. The executive programme of the Convention on  the Facilitation and Development of Inter-
Arab Trade entered into force in January 1998;  it is currently being applied by 17 of the 22 members 
of the League of Arab States.16  Its objective is to create a Greater Arab Free Trade Area within ten 
years, by reducing customs duties by 10 per cent a year.  The main body responsible for ensuring the 
implementation of the programme is the Economic and Social Counc il of the Arab League.  By 
1 January 2005, 15 countries had completed the acceler ated removal of their tariff barriers, namely:  
Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Li bya, Morocco, Oman, Palestine, Qatar, Saudi 
Arabia, Syria, Tunisia and the United Arab Emirat es (as LDCs, Sudan and Ye men have been allowed 
more time).  Consequently, Tunisia has granted dut y-free access to all products originating in these 
17 countries.17 This agreement has not been notified to the WTO. 
(iv) Arab-Mediterranean Free Trade Agreement ("Agadir Agreement") 
30. On 25 February 2004, Tunisia, together with Egypt, Jordan and Morocco, signed a free trade 
agreement known as the Arab-Mediterra nean Free Trade Agreement (or "Agadir Agreement").  Like 
GAFTA, the Agreement provides for the elimination of almost all customs duties and charges having 
an equivalent effect on the bilateral trade betw een parties.  The main objective of the Agadir 
Agreement is to make possible pan-Euro-Mediterranean  cumulation in relation to rules of origin.  The 
Agreement also provides for enhanced cooperation on customs procedures and technical standards.  In 
                                                      
 15 Euro-Mediterranean Agreement es tablishing an association between the European Community and 
its Member States, of the one part, and the Republic of Tunisia, of the other part.  Available at: http://www.deltun.cec .eu.int/fr/eu_et_T unisie/accord.pdf. 
16 The Convention dates from 27 February 1981.  The 22 members of the Arab League are:  Algeria, 
Bahrain, Comores, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Ma uritania, Morocco, Oman, 
Palestine Authority, Qatar, Saudi Arabia, Somalia, Sudan,  Syria, Tunisia, United Ar ab Emirates and Yemen.  
Arab League, on-line information.  Available at:  http://www.arableagueonline.org. 
17 The executive programme of the Gr eater Arab Free Trade Area contains  a protocol on rules of origin 
which, however, appears to have not yet entered into force. Tunisia WT/TPR/S/152 
 Page 21 
 
 
addition, it covers government procurement, fina ncial services, contingency trade measures and 
intellectual property and establishes a dispute settle ment procedure.  By May 2005 only Egypt and 
Tunisia had ratified the Agreement.   
(v) Free Trade Agreement with EFTA 
31. In December 2004, Tunisia signed bilateral free tr ade agreements on trade in non-agricultural 
products with the Member States of the European Free Trade Association (EFTA), namely, Iceland, 
Liechtenstein, Norway and Switzerland.  Bilateral pr otocols of agreement with each of these countries 
on agriculture, fish farming and agri-food are anne xed to these agreements.  The agreements also 
include substantive provisions concerning intellect ual property, competition and dispute settlement 
and cover certain aspects of servi ces, investment and government procurement (to be liberalized 
progressively and reciprocally).  They provide for payments, without restrictions, for current 
transactions and guarantee the freedom of movement  of capital linked with direct investment.  
Moreover, the parties have agreed to grant each other complete protection and security for 
investments.  The agreement between Tunisia, on th e one hand, and Switzerland and Liechtenstein, on 
the other, entered into force on 3 June 2005. 
(vi) Other agreements and arrangements 
32. The Maghreb Arab Union (UMA) was establishe d in 1989 by Algeria, Libya, Morocco, 
Mauritania and Tunisia.18 Its objectives are the free movement of goods and persons and the 
harmonization of legislation with a view to the creation of a free trade area.  However, UMA appears not to be operational where internationa l trade or investment is concerned. 
33. Tunisia is also signatory to a series of bilate ral agreements providing for tariff preferences 
(immediate abolition for certain products, accelerated phase-out for others) with Egypt (1998), Jordan 
(1998), Morocco (1999), Libya (2001), Iraq (2001), and Syria (2003).  At present, the GAFTA regime 
is more favourable than that offered by these va rious agreements.  Tunisia has also signed, on 
25 November 2004, an association agreement estab lishing a free trade area with Turkey.  The 
agreement has been ratified by the two parties.  It is scheduled to enter into force in July 2005.  It 
provides for tariff exemption for three lists of non-agricultural originating products.  Tariff 
preferences are granted on a reciprocal basis to  certain agricultural and fishery products.  The 
agreement also includes provisions on the protection of intellectual property, services, dispute settlement, anti-dumping duties, countervailing duties and safeguards. 
34. Tunisia benefits, on a non-reciprocal basis,  from concessions granted under the Generalized 
System of Preferences (GSP) by countries such as Australia, Belarus, Bulgaria, Canada, the Czech 
and Slovak Republics, the European Union, Hu ngary, Japan, New Zealand, Poland, Russia, 
Switzerland, and the United States.  Thus, in these countries Tunisian exports of products covered by 
the GSP are granted total or partial exemption from customs duties. 
35. In February 1989, Tunisia became one of the first developing countries to ratify the 
Agreement on the Global System of Trade Preferences (GSTP) among Developing Countries.  
Products originating in the 48 countries signatory to the agreement benefit from tariff preferences on a 
reciprocal basis.  The agreement also provides for special treatment for LDCs.  The authorities have 
pointed out that Tunisia did not participate in th e second round of negotiations but is still fulfilling the 
commitments it made at the end of the first round. 
                                                     
 
18 Maghreb Arab Union, on-line information.  Available at:  http://www.maghrebarabe.org/fr/ 
index.htm. WT/TPR/S/152 Trade Policy Review 
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(6) INVESTMENT REGIME  
36. For more than 30 years, the Government has been pursuing a policy of encouraging private, 
especially foreign, investment.  In view of the dec line in private investment in relation to GDP since 
2002 (Table I.2), the promotion of investment remains one of its current priorities.  Investment policy 
is based on a complex system of laws and regul ations, whose application depends on whether the 
investment is in a "resident" ("ge neral regime") or "non-resident" en terprise, is direct or portfolio, 
relates to "wholly exporting" activities (Chapter III (3 )), or involves sectors covered by the Investment 
Incentives Code (CII).19  The authorities claim that, in practice, the regime is flexible and based on 
statements made by the investors themselves and poses no problems of implementation.  There are 
numerous benefits, including tax exemptions, dire ct subsidies, and exemptions from the foreign 
exchange legislation, particularly for industrial e xport activities (Chapter III(3)(iv)).  An estimate of 
the budgetary cost of the measures covered by Article 25.1 of the Agreement on Subsidies and 
Countervailing Measures indicates a total of 557 million dinars for the year 2000.20 
37. The main role of the Commission supérieur des investissements  (CSI – Investment 
Commission)21 is to approve the acquisition of shares in  Tunisian enterprises by foreigners and to 
approve foreign direct investment in sectors subject to its prior authorization.22  T h e  C S I  i s  
responsible to the Prime Minister who acts as its chai rman.  Approval is granted if the investment "is 
of special importance or interest to the national economy". 
38. Where portfolio investment is concerned, forei gners are currently authorized to acquire shares 
in Tunisian enterprises, whether or not listed on the Tunis Stock Exchange, up to a limit of 50 per cent 
of the company capital, without the authorization of the CSI.  Investments of 50 per cent or more are 
subject to CSI approval, except for acquisitions which do not confer voting rights.23 
39. Direct investment in most manufacturing industr ies, as well as in certain service activities, is 
eligible for the CII, which specifies, in a positive list, the sectors eligible and the incentives.  The non-
eligible manufacturing industries include, for example,  oil-refining and investment in the production 
of pharmaceuticals also produced by the state-owne d enterprise SIPHAT.  Certain other activities are 
subject to prior authorization or specifications.  These include the manufacture of arms and 
ammunition and parts thereof;  mechanical carpet weaving;  brewing, malting and winemaking;  flour 
and meal milling;  edible oil refining;  the fabrica tion of bars, sections and reinforcing rods;  teasing;  
and tobacco production.  Most service activities covere d by the CII, unless wholly exporting, are also 
subject to the prior authorization of the CSI wh en the foreign holding exceeds 50 per cent of the 
company capital.24 
40. The CII provides for "common benefits" and "s pecific benefits".  The common benefits 
consist mainly of tax exemptions (Chapter III(4)(i )), including the deduction of the sums invested 
from taxable profits up to a limit of 35 per cent of th e latter;  a reducing-balance depreciation regime;  
and exemption from customs duties and (in some c ases) VAT on plant essential to the investment.  
                                                      
19 Law No. 93-120 of 27 Decem ber 1993 on the Investment Incentives Code, available at:  
http://www.cnudst.rnrt.tn/wwwisis/jort.03/form.htm.  See also  the Order of the Minister for Industry and Energy 
of 26 January 2004 updating the Guide for private investors and promoters in the manufacturing industry and services sectors. 
20 WTO document G/SCM/N/71/TUN, 1 June 2001. 
21 Law No.93-48 of 3 May 1993. 
22 Decree No. 93-2542 on the composition, organization and mode of operation of the CSI. 
23 Decree No. 97-1738 of 3 September 1997 and Decree No. 2005-793 of 14 March 2005. 
24 The web site of the Industry Promotion Agency lists  the activities subject to authorization.  Available 
at:  http://www.tunisianindustry.nat.tn/fr/doc.asp?mcat=12&mrub=95. Tunisia WT/TPR/S/152 
 Page 23 
 
 
The specific benefits are fixed in accordance with horizontal objectives, in particular, export 
promotion (Chapter III (3) (vi)).  The other horiz ontal objectives include regional and agricultural 
development and the promotion of technolog y and small and medium-sized enterprises 
(Chapter III(4)(i)). 
41. Some of the activities not covered by the Code  are also open to foreign participation but 
subject to authorization in relation to the conditions  under which it is permissible to engage in them, 
irrespective of the status or nationality of the invest or.  This applies, for example, to the activities of 
banks and investment companies.  Other activities are subject to authorization when the level of 
foreign participation is 50 per cent or more;  these include the activities of in surance companies, stock 
market intermediaries and forwarding agents, an d transport and port activities.  In practice, 
authorization is granted, except in certain sectors reserved for the State or nationals, for example, 
fixed telephony and all postal and courier, distribution (wholesale and retail), electricity, gas and 
water services. 
42. With respect to international investment, Tuni sia has acceded to a number of international 
conventions, in particular, those of the Multilatera l Investment Guarantee Agency (MIGA) and the 
International Centre for the Settlement of I nvestment Disputes (ICSID).  Tunisia has signed 
investment protection and double taxation agreements  with most of the OECD countries.  It has 
signed bilateral mutual investment protec tion agreements with some 50 countries.25 
                                                      
25 For a list of these agreements, see the web site of  the Industry Promotion Agency.  Available at:  
http://www.tunisianindustry.nat.tn/fr/doc.asp?action=showdoc&docid=548.