WT/TPR/S/113 Trade Policy Review
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II. TRADE AND INVESTMENT REGIMES
(1) INSTITUTIONAL FRAMEWORK
1. The Republic of Burundi's transitional Constitution was adopted in October 2001 in
replacement of that in force since 1998.  The new Constitution is part of the Arusha Agreement on
peace and reconciliation in Burundi signed at Arusha (United Republic of Tanzania) in August 2000.
It will govern the functioning of institutions in th e Republic of Burundi until the entry into force of a
post-transition Constitution.  The transitional period, lasting 36 months, is to be used  inter alia  to
ensure the adoption of a post-transition Constitution by referendum in compliance with the principles
set out in the Arusha Agreement.
2. Executive power is in the hands of the President of the Republic, a Vice-President of the
Republic, and a transitional Government of national unity.1  The President and Vice-President were
appointed as part of the Arusha negotiations and confirmed by the transitional National Assembly.  It
is provided that during the transitional period the Presidency shall be exercised in two periods of
18 months.  According to this arrangement, the current Vice-President of the Republic will become
the President of the Republic during the second transitional period.  The Arusha Agreement provides
that at the end of the transitional period - expected to be 28 October 2004 - the President will beelected by universal suffrage for a five-year term of office.
3. The President is both the Head of State and Head of Government.  He signs and ratifies
international treaties and agreements.  He exercises his authority through decrees countersigned by the
Vice-President.  The President and Vice-President, after consulting the leaders of the parties that
concluded the peace agreement, appoint the members of the transitional Government of national
unity, whose maximum number is 26.
4. Legislative power is currently exercised by the transitional Parliament, composed of the
transitional National Assembly and the transitional Senate.  Parliament's role is to adopt legislation
and monitor action by the Government.  Pursuant to the Constitution, the areas covered by legislation
include the following:  financial and monetary matters, i.e. the issuance of money, the State's budget,
definition of the tax base and rates of taxes and levies, disposal and management of State property;
nationalization and privatization of enterprises and transfers of ownership from the State to the privatesector;  the State's economic and social objectives.
5. The transitional National Assembly is composed of the following:  members of the National
Assembly elected on 29 June 1993;  four members appointed by each of the "participating parties" not
represented following the 1993 elections;  28 members representing civil society within the National
Assembly;  and the members currently belonging to the National Assembly despite the return offormer members.  The transitional Constitution provides that legislation must be adopted by a two-
thirds majority of members present or represented.
6. Under the Constitution, the transitional Senate is appointed by the President of the Republic,
the Vice-President of the Republic, and the Bureau of the transitional National Assembly, observing a
political, ethnic and regional balance.  The Senate's decisions are taken by a two-thirds majority ofsenators.
7. The National Assembly elects its President and Vice-President after the first session
following its inauguration.  The President and Vice- President must belong to two different political
factions.
                                                     
1 Article 77 of the transitional Constitution.Burundi WT/TPR/S/113
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8. The President and Vice-President of the Senate are elected in the same way as those of the
National Assembly.  The functions of the transitional Senate are the following:  (i) to approve
amendments to the Constitution and basic legislation;  (ii) to approve texts concerning political
parties;  (iii) to undertake enquiries into government administration;  (iv) to monitor the application of
the constitutional provisions on representativeness or balance in the composition of any components
of the civil service;  (v) to advise the President of the transitional National Assembly on any matters;(vi) to ensure compliance with the Arusha Agreement;  (vii) to make comments or propose
amendments concerning the legislation adopted by the transitional National Assembly;  and (ix) to
approve appointments to various posts, including the head of the defence and security corps;
provincial governors and local administrators;  members of the Supreme Court;  Presidents of the
High Courts, the Commercial Court and the Labour Court.
9. Under the Constitution, the National Assembly does not have any functions other than those
within the competence of parliament, namely, the adoption of legislation and monitoring the
Government's action in relation to the following:  (i) the citizen's fundamental rights and obligations;
(ii) the status of persons and property;  (iii) the political, administrative and judicial structure;
(iv) environmental protection and the conservation of natural resources;  (v) financial and monetarymatters;  (vi) nationalization and denationalization of enterprises and transfers of ownership from the
public to the private sector;  (vii) the educational and scientific research regime;  (viii) the State's
economic and social objectives;  and (ix) labour, social security and trade union legislation.  The
National Assembly is specifically given responsibility for adopting the budget (see below).
10. The Constitution provides that the Judiciary is impartial and independent of the Legislative
band Executive.  The Supreme Court is the highest ordinary court in Burundi and comprises the
following:  an appeal court;  an administrative c ourt;  and a judicial court.  The Constitutional Court
decides on the constitutionality of laws and interprets the transitional Constitution.  The Supreme
Court and the Constitutional Court sitting toge ther constitute the High Court of Justice.
11. Commercial cases are judged by the Commercial Court, established by presidential decree in
1987.  The Commercial Court ensures respect for the provisions of the Commercial Code and deals
with violations thereof.
12. The Judiciary also comprises a Higher Judicial Council, responsible for ensuring that justice
is administered properly, and a Court of Audit responsible for examining and auditing the accounts of
all government services.  Pursuant to the Constitution, at the provincial level, Executive power is
delegated to a provincial governor responsible for coordinating administration of the province.
13. Provincial governors are appointed by the President of the Republic following consultation
with the Vice-President and confirmation by the transitional Senate.
(2) 
POLICY FORMULATION AND IMPLEMENTATION
14. Policies are formulated and implemented through laws, decrees or orders.  Both houses of
parliament, the President of the Republic and the transitional Government conjointly may propose
laws.  Each Ministry is responsible for formulatin g policies within its competence and for preparing
the relevant draft legislation.  This is done in coordination with other ministries which may be
affected by the measures under consideration.  Draft laws or decrees are first discussed by the
transitional Government and then put before the bureaux of the transitional National Assembly and
the transitional Senate simultaneously.
15. Draft laws must specify whether their content is within the competence of the transitional
Senate or not.  In either case, the National Assembly transmits the text to the Senate after havingWT/TPR/S/113 Trade Policy Review
Page 14
adopted it.  If the text concerns a matter within the competence of the Senate, the latter has 30 days to
consider it.  If this is not the case, the Senate has 10 days and the text is only examined at the request
of the Senate's bureau or at least one third of its members.  If the Senate amends a draft law adopted
by the National Assembly, the text is sent back to  the Assembly for a further reading.  A draft law
only enters into effect when it has been adopted by both houses and enacted by the President.
16. The President may request a second reading of all or part of a draft law.  In such cases, the
law may not be enacted until it has been adopted by a majority of three quarters of the deputies and
three quarters of the senators.  The President may, after consultation with the Vice-President of the
Republic, the President of the National Assembly and the President of the Senate, submit any draft
constitutional, legislative or other text to a referendum if it could have a significant effect on
Burundi's existence or future or on the na ture or functioning of its institutions.
17. The Constitution also states that proposals or amendments by the two houses are not
admissible if the result of their adoption would be to decrease public revenue substantially or to
impose or increase large-scale public expenditure unless the proposals or amendments also include
proposals on compensatory revenue.
18. Under the Constitution, in order to carry out its programme, the Government may request
parliament for authorization to take measures that  are normally the prerogative of the law in the form
of decree-laws for a limited period.  A special procedure is laid down for the national budget.  If the
National Assembly considering the draft finance law does not adopt it, the budget is given effect
through a decree-law adopted by the Council of Ministers.
19. Trade policy is formulated and implemented by the Ministry of Trade and Industry.  Other
institutions are also involved in implementing tr ade policy, for example, the Ministry of Finance
(including the customs administration);  the Ministry of Agriculture;  the Ministry of Planning andReconstruction;  the Ministry of Justice;  the State Enterprises Service (SCEP);  and the Permanent
Secretariat for following up economic and social reform (SP/REFES)
2, which is part of the Vice-
President's office.  The Ministry of Trade and Industry has designated a focal point to coordinate its
contribution to preparing the Poverty Reduction Strategy Paper.
20. The Economic and Social Council is an advisory  body with competence for all areas related
to economic and social development and it must be consulted on any draft development plan or any
regional or subregional integration project.  On its own initiative, the Council may also make
recommendations in order to draw the attention of parliament or the Executive to economic and social
reforms which it considers to be contrary to the general interest.
21. More consultation with the private sector is a priority in the transitional Government's
programme for 2002-2004.  The private sector is called on to become a true partner of the public
sector in boosting investment and creating jobs.  It has been involved in the process of preparing the
Interim Economic Growth and Poverty Reduction Stra tegy Paper (Interim PRSP).  It is recognized,
however, that additional efforts are needed to de velop more systematic consultation between the
Government and the private sector on the formulation of trade policy.
22. Although the transitional Constitution empowers the President of the Republic to sign and
ratify international treaties, in practice wide-ranging powers are given to ministers (including the
Minister for Trade and Industry) in their respective areas of competence, and to the Minister for
Foreign Affairs in general.  In the past, there was an interministerial committee responsible for
                                                     
2 The SP/REFES is responsible for supervising and coordinating all matters related to the economic
reform and structural adjustment programme.Burundi WT/TPR/S/113
Page 15
coordinating trade matters, but following the political crisis in Burundi during the 1990s it ceased to
operate.  The Government is considering re-establishing this committee.
(3) TRADE POLICY OBJECTIVES
23. Burundi intends to seize the opportunity provided by the establishment of the customs union
of the Common Market for Eastern and Southern Africa (COMESA) in order to continue liberalizing
its trade regime.  One short-term objective is to abolish customs duties on imports from theCOMESA so as to allow Burundi to join the fr ee trade area by 2004.  In the medium term, Burundi's
full participation in the COMESA's custom union, planned for the year 2004, will require a reduction
in the rates applied under its MFN tariff as the tariff range envisaged for the COMESA's common
external tariff so far is 0 to 30 per cent (section (5) below).
24. One of the Government's priorities is to diversify exports so as to lessen dependence on
coffee.  It intends to revise the Investment Code and provide incentives to boost investment in non-
traditional sectors.  A Free Zone Law was adopted in 2001 and a Foreign Trade Promotion Agency
(APEE) has been set up.  It is expected that sma ll and medium enterprises (SMEs) would play a key
role in expanding non-traditional subsectors so SMEs receive more favourable treatment under the
Investment Code.  The establishment of a single window for investment is also under consideration.
25. In order to lessen the negative impact of inadequate supply of basic services – including
telecommunications, transport, financial services, and energy – on Burundi's participation in
international trade, the Government intends to pu rsue sectoral reform through its privatization
programme launched in 1991.
3  A law on competition is also being drafted.
26. The transitional Government's programme for 2002-04 will allow the creation of a
macroeconomic environment that should help to ensu re the success of trade reforms.  The programme
provides for upgrading of the infrastructure, in particular communications, involving three means of
transport – land, lake and air.  For a landlocked country such as Burundi, exploitation of its trade
potential requires an efficient communications infrastructure.
27. A campaign to eradicate corruption has been initiated, inter alia , in order to establish a
business-friendly environment.  For this purpose, the transitional Government has created a Ministry
for good governance one of whose tasks is to ensure the application of transparent administrativeprocedures.
(4) 
LAWS AND REGULATIONS
28. The Commercial Code provides for free trade and the principle of freedom to fix prices.  It
also sets out the accounting principles to be fo llowed by enterprises.  Any enterprise wishing to
engage in trade must be listed in the Commercial Register, which is kept by the clerk of theCommercial Court.  The Code also provides sanctions ranging from a fine to closure of the
establishment due to failure to observe the Code's provisions.  It defines unfair competition and lays
down provisions on consumer protection.
29. The 1971 customs legislation defines the procedures for import, export and imposition of
import and export duties and taxes.  It also covers customs valuation and the various customs regimes,inter alia .  Provisions in other laws and regulations such as the Investment Code also affect trade.
Table II.1 contains a list of the main trade-related legal texts and instruments in force in Burundi.
                                                     
3 The privatization law was adopted in 1996.WT/TPR/S/113 Trade Policy Review
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Table II.1
Main trade laws and regulations, December 2002
Area Instrument/TextDate of entry into
force
Business activities in Burundi(including unfair competition and
consumer protection), competitionCommercial Code, Decree Law No. 1/045 9 July 1993
Investment guarantees;  rights and
obligations;  investment regimesInvestment Code, Law No. 1/005 14 January 1987
Free zone regime Law No 1/015 revising Decree Law No. 1/3 of 31 August 1992
establishing a free zone regime in Burundi31 July 2001
Taxes, levies and duties General Taxes and Duties Code.
Amendment of certain provisions on income tax or professional taxes
Amendment of certain provisions on taxes on income from movable
capital or movable propertyRevision of Law No. 1/011 of 30 December 1998 establishing a fixed
levy on certain taxes.
Law No 1/006 of 13 March 2001 amending certain provisions of theDecree Law of 31 January 1989 on reform of the transaction tax13 March 2001
13 March 2001
Customs legislation Order No. 030/186 of 30 December 1971 giving effect to Decree Law
No. 1/158 of 12 November 1971 amending the customs legislation30 December 1971
Intellectual property
(Copyright)Decree law regulating copyright and intellectual property in Burundi 4 May 1978
Labour code Decree Law 1-037 of 07 July 1993 revising Burundi's labour code 7 July 1993
Phytosanitary legislation Decree Law No 1/033 of 30 June 1993 on plant protection in Burundi 30 June 1993
State enterprise privatization
programmeLaw No 1/003 of 7 March 1996 amending Decree Law No 1/21 of
12 August on the privatization of State enterprises7 March 1996
Source : Information supplied by the Burundian authorities.
30. The Investment Code guarantees freedom of establishment and capital investment for any
natural or legal person wishing to establish a production company in Burundi.  The company may
have national, foreign or joint capital.  The Code also guarantees any enterprise (withoutdiscrimination) acquired rights in movable or immovable property, legal exercise of economic
activities, freedom to establish and move residence, and the right to transfer capital and earnings
(subject to the exchange regulations in effect).
31. The Code defines the four principal regimes under which investment may be made, together
with the rights, obligations and special benefits applicable to each of them.  The regimes are:  theordinary law regime;  approval as a priority activity;  official approval;  and the decentralized
enterprise regime.
32. The following are the requirements for being considered a priority enterprise:  produce
technical and financial guarantees deemed adequate;  undertake to give priority to the recruitment and
training of Burundian staff;  create or expand activities in sectors deemed priorities;  directly orindirectly contribute to the achievement of objectives in the economic and social development plan;
participate in Burundi's economic and social development through large-scale investment, the creation
of permanent jobs and the production of consumer or capital goods;  help to improve the balance-of-
payments by increasing exports;  promote the dissemination and development of technologies;  help
to maintain the regional balance of economic and general social development;  and observe theprovisions for implementation of the Code.  For projects in which investment does not exceed
Fbu 100 million, the National Investment Commission is responsible for approving priority
enterprises.  In other cases, approval is the responsibility of the Council of Ministers.
33. An "officially approved" enterprise is one th at meets the following conditions in addition to
the eligibility criteria applicable to priority enterprises;  its project has been approved by theCommission;  it is deemed to be of considerable importance for Burundi's economic and social
development;  and it meets the job creation and in vestment requirements determined in an order byBurundi WT/TPR/S/113
Page 17
the Minister for Planning.  With regard to the latter condition, the enterprise must meet at least one of
the following requirements:
- Agricultural or agro-industrial enterprises must create at least 150 permanent new
jobs and other activities must create 100 jobs;
- Agricultural or agro-industrial enterprises must invest at least FBu 1 billion and other
sectors, including services, FBu 2 billion.
34. A decentralized enterprise is one that has been approved as a priority or officially approved
enterprise and is established outside Bujumbura's city limits and neighbouring zones.  Lastly, the
ordinary law regime does not give any special privileges.
35. In order to enjoy the benefits provided in the Investment Code, a pre-investment study
highlighting the legal, economic and technical features of the project must be deposited with the
National Investment Commission, chaired by the Minister for Planning, Reconstruction and
Development.  The Commission is responsible for making a recommendation, inter alia , on whether
or not the investment project is a priority, the regime under which the enterprise is eligible, and thebenefits to be granted.  The Investment Code specifies the criteria that determine the regime
applicable to an investment project and also the rele vant incentives according to the eligibility criteria
(Chapter III(4)(i)).  The incentives are usually of a fiscal nature and are intended to promote certain
types of special industrial investment in the context of development policies, including those which
help to create jobs, promote non-traditional sectors, and the decentralization of economic activities.
36. The authorities recognize that the Investment Code has become difficult to apply.  The time
that elapses between the filing of an application with the National Investment Commission and thegranting of benefits may last as long as a year.
37. In addition to the special incentives in th e Investment Code, the law of July 2001 on the
creation of free zones determines the benefits available to enterprises that meet the eligibility criteria
(Chapter III (3)(v)).  The regime does not apply to a specific geographical area but is more a system
of free points:  Article 2 of the Law describes the free zone regime as a special legal status granted tocertain enterprises established in Burundi under specific conditions.  The law on free zones provides
that  applications must be processed within 15 days.
38. Notwithstanding the provisions in the Investment Code, the degree of openness of the
investment regime is in practice limited by the existence of a State monopoly or state enterprise in a
dominant position, particularly in subsectors such as fixed telephony, the textile industry, the sugarindustry, electricity and water, postal services, tourism, marketing of pharmaceuticals, marketing of
coffee and tea, and road and air transport services.
(5) 
TRADE AGREEMENTS AND ARRANGEMENTS
39. Burundi is a member of the WTO, the United Nations Organization and its agencies, the
World Bank Group, and the International Monetary  Fund.  It has signed the Cotonou Agreement
between the European Union and the ACP countries and belongs to the African Union (formerly the
Organization of African Unity), the Common Market  for Eastern and Southern Africa (COMESA),
and the Economic Community of Central African States (ECCAS).
40. The Government of Burundi considers that Burundi's participation in regional agreements,
particularly the COMESA, constitute s an important component of its strategy for integration into the
global economy.WT/TPR/S/113 Trade Policy Review
Page 18
41. At December 2002, Burundi had not been involved in any dispute settlement procedure at the
multilateral, regional or bilateral levels.
(i) World Trade Organization (WTO)
42. Burundi has been an original member of the WTO since 23 July 1995, after having been a
contracting party to the GATT since 13 March 1965.  As a least developed country (LDC), Burundi
benefits from a more extensive regime of special and differential treatment than that given todeveloping countries.  Under certain agreements, this means longer transitional periods and less
onerous commitments.  Nevertheless, problems due in particular to lack of capacity have delayed
Burundi's implementation of the WTO Agreements and mean that it has been unable to make the best
use of the opportunities afforded by the multilateral trading system.  Technical assistance needs,
including those related to implementation, are described in detail in section (6) below.
43. Table II.2 shows Burundi's main notifications to the WTO.  Burundi has not signed any of the
WTO plurilateral agreements and is not an observer to any of these agreements.
Table II.2
Status of WTO notification obligations, December 2002
WTO Agreement Obligation Periodicity Symbol of the latest notification
Decision on notification
procedures for quantitativerestrictions (G/L/59)Notifications Firstly, by 31 January 1986,
and then at two-yearly intervalsG/MA/NTM/QR/1/Add.8,
1 March 2002
Antidumping (Article 18.5) Laws and regulations Once before March 1995 and
then when any changes aremadeG/ADP/N/1/BUR/1, 24 April 2002
Customs valuation
(Annex III, para. 1)Extension of the delay for
application of the AgreementAt the end of the delay granted
to developing and least-developed countriesG/VAL/38, 18 January 2001
Import licensing procedures
(Article 7.3)Questionnaire:  regulations and
information concerning proceduresfor submitting applicationsYearly for the questionnaire;
once only, then when anychanges are made to theregulations or informationG/LIC/N/3/BUR/2, 7 November 2001
G/LIC/N/3/BUR/1, 27 April 2001
Import licensing procedures
(Articles 1.4(a) et 8.2 (b))Laws and regulations Once only, then when any
changes are madeG/LIC/N/1/BUR/1, 27 April 2001
Rules of origin (Articles 5.1
and 5.2)Notification of non-preferential
rulesOnce only, then when any
changes are madeG/RO/N/33, 2 May 2001
Subsidies (Articles 18.5 and
32.6)Laws and regulations Once by March 1995, then
when any changes are madeG/SCM/N/1/BUR/1, 24 April 2001
Safeguards (Article 12.6) Laws and regulations Once only, then when any
changes are madeG/SG/N/1/BUR/1, 30 April 2001
Article XVII GATT Laws and regulations Once only, then when any
changes are madeG/STR/N/7/BUR, 15 May 2001
TRIPS (Article 63.2) Laws and regulations Once only, then when any
changes are madeIP/N/1/BDI/1, 18 June 2001
TRIPS (Article 69) Contact points Once only, then when any
changes are madeIP/N/3/Rev.6, 1 March 2002
TRIMS (Article 6.2) Contact points Once only, then when any
changes are madeG/TRIMS/N/2/REV.9,
28 September 2001
GATS (Articles III.4 et IV.2) Contact points Once only, then when any
changes are madeS/ENQ/78/Rev.1, 5 October 2001
Source: WTO documents.
44. From a more general standpoint, Burundi attaches great importance to continued reform of
the international agricultural market, in particular, by removing obstacles to market access, decreasingdomestic support, and abolishing export subsidies in industrialized countries.  Burundi also considers
that the WTO dispute settlement system is too costly and difficult to access for LDCs.Burundi WT/TPR/S/113
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(ii) Regional agreements
(a) Common Market for Eastern and Southern Africa (COMESA)4
45. COMESA'a programme is to broaden and expand the integration process in member countries
by adopting general measures to liberalize trade, for example, the abolition of all tariff and non-tariff
barriers and the adoption of a common external tariff;  free movement of capital, labour and goods,
and the right of establishment in the region;  the adoption of a common set of standards, technicalregulations, quality control procedures, certification systems, and sanitary and phytosanitary
regulations;  tax harmonization (including VAT and excise duties), and provisions on industrial
cooperation inter alia , company law, intellectual property and investment;  application of a
harmonized competition policy; and the establishment of a monetary union.
5  COMESA has been
notified to the WTO under the enabling clause.
46. COMESA should therefore lead to a customs a nd monetary union.  Its free-trade area (FTA)
was set up on 1 November 2000;  nine of its member countries were able to respect this deadline6,
whereas Burundi has been given a waiver to allow it to apply a 60 per cent reduction of its MFN
tariffs on exports from COMESA.  Burundi is pla nning an 80 per cent reduction as of 1 January 2003
and full integration into the area by 2004.  A number of other members intended to accede to the FTAin 2001.  The customs union should come into effect on 1 November 2004, with a common external
tariff (CET) comprising four rates:  0, 5, 15, and 30 per cent (these rates apply to capital goods, raw
materials, intermediate goods, and finished goods, respectively).  Because of the current range of
MFN rates it applies, imposition of the CET at these rates will constitute a challenge for Burundi if it
wishes to join the common market.
47. The granting of tariff preferences is subject to regulations on rules of origin.  The COMESA
lays down four criteria for determining the right to receive preferential treatment:  the goods must bewholly produced in the region, without any raw mate rials of foreign origin;  or the imported content
must not exceed 60 per cent of the c.i.f. value of all the materials used in production;  or the ex factory
value added must account for at least 35 per cent of the price of the finished good
7;  or the value
added must be at least 25 per cent if the finished good is deemed "particularly important" for the
development of a member State (in accordance with th e previously defined list of products), or the
processing implies a change in the tariff heading.
48. The monetary harmonization programme is to be implemented in three stages between 1992
and 2025.  The last stage should result in a proper monetary union in which there will either be a
permanently fixed exchange rate or a single currency;  the full harmonization of the member States'
economic, budgetary and monetary policies;  full integration of the financial structure;  pooling ofexchange reserves;  and the establishment of a single monetary authority.  In May 1999, this
                                                     
4 At the end of 1994, the Preferential Trade Area for Eastern and Southern African States became
COMESA.  In addition to Burundi, the other members ar e:   Angola, Comoros, Democratic Republic of the
Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda,Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.  The United Republic of Tanzania, Lesotho andMozambique have withdrawn.
5 Further details can be found at http//:www.comesa.org/obj.htm
6 The nine members are Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and
Zimbabwe.  Goods transactions among the members of the COMESA's FTA are duty free, without exception.
7 "Value added" is defined here as being the difference between the ex factory price of finished goods
and the c.i.f. value of the inputs imported from countries not members of the COMESA.  The minimum level ofvalue added was brought down from 45 to 35 per cent in 2000.  Egypt and Uganda, however, continue to applythe 45 per cent threshold.WT/TPR/S/113 Trade Policy Review
Page 20
programme was boosted by the introduction of limited convertibility of currency among member
States that have important cross-border trade.  A coordination body composed of experts from central
banks and ministries of finance in the region has been set up in order to oversee the application of the
measures and ensure that the harmonization process makes progress towards monetary union.
49. Several institutions have been set up to facilitate the development of  COMESA's members.
The Trade and Development Bank for Eastern and Southern Africa (PTA Bank) finances foreign tradetransactions and projects by public or private investors resident in one of the member States.  To date,
Burundi has not received any financing from th e PTA Bank.  The COMESA clearing-house has
become less important following the liberalization of the exchange regime in the majority of member
countries.  Its role has changed and now it focuses mainly on enhancing the efficiency of clearing
operations in order to supplement the services provided by commercial banks;  give business personsa form of insurance against political risks in intra-regional trade;  and facilitate harmonization of
monetary and budgetary policies within the region.
50. The PTA reinsurance company (PTA-RE) helps to promote insurance and reinsurance in the
region.  Burundi signed the Agreement establishing the PTA-RE and the Burundi Insurance Company
(SOCABU) is a shareholder.  The African Trade Insurance Agency (ATIA) was set up in August2001 to boost investors' confidence by providing cover against political risks.  The ATIA is a
COMESA creation, but all members of the African  Union (AU) may belong  to it.  The COMESA
tribunal started to operate in 1998 and is responsible for resolving any issues brought before it under
the Treaty.  Burundi has never been involved in any official dispute within this framework.
51. The Protocol on the free movement of persons is to be implemented in several stages;  the
first stage is to abolish obligatory visas, which was to enter into force in 2000, and the majority of
countries, including Burundi, no longer require citizen s of other COMESA countries to possess a visa.
For Burundi, the COMESA measures to facilitate movement of persons and transit of goods are
particularly important because of its landlocked situation.
(b) Economic Community of Central African States (ECCAS)
52. In addition to Burundi, the following are members of the ECCAS:  Angola, Cameroon,
Central African Republic, Chad, Democratic Republic of the Congo, Equatorial Guinea, Gabon,Republic of the Congo, Rwanda, and Sao Tomé and Principe.  It was established in 1985, but the
integration process has been at a standstill since 1992.
(c) The Economic Community of the Great Lakes Countries (CEPGL)
53. The Economic Community of the Great Lakes Countries was set up in 1975 and is composed
of Burundi, Democratic Republic of the Congo, and Rwanda.  Joint entities have been established,including a joint bank, an agricultural and animal research institute, an energy generating company
(energy from the Great Lakes).  The signatories have also agreed to apply reciprocal trade preferences
and have identified a list of products eligible for su ch treatment.  As a result of the crises in the three
countries, the CEPGL no longer operates.  Consequently, the signatory countries, including Burundi,
have been unable to apply the relevant preferential treatment.
(d) Regional Integration Facilitation Forum (RIFF)
54. The Regional Integration Facilitation Forum (RIFF), formerly known as the Cross-Border
Initiative, is aimed at integrating the economies of member countries (including Burundi) by
facilitating private investment, trade and payments among the countries, as well as cross-border
movement of labour and capital.  A number of count ries in eastern and southern Africa and the IndianBurundi WT/TPR/S/113
Page 21
Ocean belong to the Forum.  The RIFF was developed in close consultation with the region's
economic integration organizations.  As a forum, it is intended to reinforce and supplement the
activities of these organizations.  It was established in 1992 and is supported by the European
Commission, the International Monetary Fund, the World Bank, and the African Development Bank.
The RIFF does not have any regional secretariat and operates on a voluntary basis.
(e) African Union (AU) and the African Economic Community (AEC)
55. The African Union came into being on 8 July 2002 as the successor to the Organization of
African Unity (OAU).8  The OAU Treaty was signed by 30 African countries on 25 May 1963.  The
objective of the 1991 Treaty of Abuja (Nigeria) is to establish an African Economic Community, but
this is not yet in operation.
(iii) Other agreements and arrangements
56. Burundi has not signed any bilateral trade agreement.
(a) The Cotonou Agreement and the "Everything But Arms" initiative
57. Burundi has signed the Cotonou Agreement (which replaced the Lomé Convention) between
the EU and 77 African, Caribbean, and Pacific countries (ACP).  This Agreement renews the majority
of the non-reciprocal trade preferences which the EU  already granted to the ACP countries.  At the
Doha Ministerial Conference, the Members of the WTO granted the waiver requested by the parties to
the Cotonou Agreement from commitments under Article I.1 of the GATT 1994 (MFN treatment)
until 31 December 2007.  Before then, the parties should conclude new trade arrangements that are in
compliance with the WTO Agreements.  This should lead to the gradual elimination of barriers to
trade among the parties and strengthen their cooperation in all trade-related areas, particularly through
the establishment of a free-trade area within a period of 12 years, i.e. by 2020.  During this period, the
EU must negotiate with ACP countries, which should have begun in September 2002, in order toconclude bilateral partnership agreements or agreements with various regional groups (regional
economic partnership agreements), which should come into effect at the latest by January 2008.
These agreements will be based on reciprocal liberalization so that, in principle, Burundi, like the
other ACP countries, should gradually grant preferential access for the EU's exports.  Nevertheless, a
special clause in the Cotonou Agreement gives LDCs the right not to enter into a reciprocal
partnership agreement, in which case the country in question would receive the preferences granted by
the EU under the "Everything But Arms" initiative.  This initiative was launched in March 2001 and
grants duty free access and quotas for all products imported from LDCs, with the exception of arms.
A timetable has been set for applying preferential treatment to sugar, rice and fresh bananas.
9
(b) African Growth and Opportunity Act (AGOA)
58. The AGOA gives extended pr eferential access to the United States market to Sub-Saharan
African countries which meet certain eligibility criteria.  At present, 36 African countries are eligible.
For the moment, Burundi does not meet these criteria.  The American Government intends to work
together with some 12 African countries which do not yet benefit from the AGOA so that they can
meet the eligibility criteria.10
                                                     
8 Almost all African countries belong to the AU.
9 See WTO (2002) for further details.
10 In order to benefit from the AGOA, a country must make progress towards a market economy, a
multiparty system and the rule of law, the elimination of discriminatory barriers to trade and investment by theWT/TPR/S/113 Trade Policy Review
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(c) Generalized System of Preferences (GSP) and Global System of Trade Preferences (GSTP)
59. Burundi receives GSP treatment from industrialized countries, but it has not yet acceded to
the GSTP Agreement among developing countries.
(6) TRADE -RELATED TECHNICAL ASSISTANCE
60. The Government of Burundi has recognized that lack of capacity in trade and trade policy is a
major factor limiting the benefits (for example, economic growth and poverty reduction) that thecountry should derive from its participation in the WTO.  Due to the internal crisis and civil war,
Burundi has only received very limited technical assistance since 1993.  The mission undertaken by
the WTO in June 2002 in order to launch the trade policy review was the first WTO technical
assistance activity in Burundi.  The development of the peace process and the commitments made by
the international community have made it possible to envisage increasing the quantity and quality of
technical assistance aimed at building trade capacity.  Burundi is also one of the LDCs for which the
revised Integrated Framework (see footnote) for Technical Assistance and Capacity Building was set
up in 2002.
11
61. The analysis of Burundi's trade-related technical assistance requirements highlights different
areas in which technical assistance and capacity building measures are needed.  These concern theimplementation of trade agreements;  participation in trade negotiations;  formulation of trade
policies;  supply constraints;  and the integration of trade and development policies.
(i) Implementation of agreements, formulation of policies, and negotiations
62. Burundi's assistance requirements relate to:  (i) the harmonization of laws and regulations
with WTO requirements;  (ii) notifications;  (iii) staff training and the establishment of institutional
structures to facilitate the implementation and observance of agreements;  and (iv) the formulation of
policies which allow maximum benefit to be obtained from the application of the agreements andminimize any possible costs.
63. The implementation of the WTO Agreement on Customs Valuation is a major concern for
Burundi.  It forms part of the wider context of reform of the customs system, which is considered to
be a key component of a strategy aimed at creating conditions favourable to the private sector and
conducive to its participation in international trade.  Burundi has been granted a waiver which allowsit to delay implementing the provisions of the Agreement until August 2002.  When the waiver was
granted, a technical assistance plan was adopted, but it did not prove possible to implement it, no
doubt due to the civil war (Chapter III).
64. Burundi's customs administration has identified the following specific needs:  (i) training of
customs officials on the content and implementation of the Agreement on Customs Valuation;
                                                                                                                                                                    
United States, the protection of intellectual property, combating corruption, protection of human rights and
labour standards, and the abolition of certain forms of child labour.
11 The Integrated Framework was set up in 1996.  An implementation review was conducted in 2002
and it was decided gradually to extend the Framework to include LDCs that fulfil certain criteria, including the
following:  (i) firm commitment by the Government to integrate trade into its national development strategy andPoverty Reduction Strategy Paper (PRSP);  (ii) the country must at least be preparing its PRSP;  (iii) the country
must at least be at the preparatory stage for forthc oming meetings of the World Bank Consultative Group or
UNDP Round Table;  and (iv) the country must provide a conducive operating environment (e.g. infrastructurelevel, resource base of the World Bank, IMF and UNDP country offices, donor response, and the pace of
domestic reform).Burundi WT/TPR/S/113
Page 23
(ii) review of domestic legislation and administrative procedures concerning valuation;  (iii) training
on valuation, post-clearance auditing and anti-fraud techniques and control, within the framework of
the Agreement;  (iv) modernization of  legislation, and revision of the customs tariff;  and
(v) computerization of central services, customs offices and border posts.
65. Technical standards and regulations, and sanitary and phytosanitary measures are one area of
major concern to Burundi's authorities.  The Burundi Standardization and Quality Control Bureau(BBN) needs support in order to adopt, adapt and develop domestic standards based upon
internationally recognized standards.  This w ould give exporters better access to regional and
international markets, and allow them to make the quality of their products known.  The sub-sectors
with the most to gain from the introduction of such standards are textiles and agricultural foodstuffs,
particularly coffee and tea, which face a highly competitive market in which recognition of a qualitylabel is an important factor.  During the period 2002-2003, the Bureau intends to,  inter alia :  adopt
the EEC standard for organic products;  adopt ISO standards for coffee and tea;  develop a standard
for cotton yarn and textiles;  adopt the Codex Alimentarius  standard for sugar;  develop or adopt a
standard for cement;  and adopt a standard for mineral fertilizers.  The BBN also needs support in the
use of legal and industrial metrology.
66. The establishment of certification structures is a second-tier need.  The BBN cooperates with
a number of national laboratories, but is faced with a lack of both the appropriate laboratory
equipment and calibration equipment used to check and correct industrial measuring instruments.  As
regards training, the requirements are:  eight officials to work on standardization;  six on certification;
four on quality assurance;  five on metrology and testing;  and three on document management.  The
BBN also plans to assign part of its staff to provide technical assistance to domestic enterprises,
especially product quality control in priority sub-sectors such as agricultural foodstuffs and textiles.
67. As a first step, Burundi plans to revise its laws on copyright protection and industrial
property.  The existing law on industrial propert y protection dates from 1964, and a draft revision is
under consideration.  The existing law on copyright protection was enacted in 1978;  requests for its
revision have been made, particularly by associat ions of Burundian artists, composers and performers,
with a view to promoting the local music industry .  Technical assistance needs involve:  (i) the
analysis of draft legislation on copyright and industrial  property so as to verify its conformity with the
TRIPS Agreement;  (ii) support in setting up the copyright management office, and in strengthening
the industrial property department in the Ministry of Trade and Industry, inter alia , by providing
information technology tools and Internet connections;  and (iii) training of staff responsible for the
implementation and observance of intellectual property laws.  The 1978 law, for example, was notimplemented, partly due to a lack of competent personnel.  Assistance has also been requested with a
view to future negotiations on geographical indications of interest to Burundi, particularly those for
coffee and tea.
68. Burundi does not have any legislation on contingency trade measures (anti-dumping,
countervailing and safeguard measures) and has not received any technical assistance in this field.The Government believes that the liberalization process, whether in a regional or multilateral context,
may give rise to a certain amount of anxiety on the part of private operators regarding unfair or
harmful trade practices, including dumping.  It would therefore be important to develop the
Government's capacity to deal with cases of unfair competition without taking measures of a purely
protectionist nature.
69. In the area of subsidies and Trade-Related Investment Measures (TRIMS), assistance would
help to ensure  that the measures planned (particularly the proposed revision of the Investment Code)WT/TPR/S/113 Trade Policy Review
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comply with WTO provisions, and do not lead to inappropriate allocation of Burundi's economic
resources.
70. The increasing number of negotiations, with their different timetables and procedures – for
example, the WTO Doha negotiations;  COMESA regional negotiations;  and negotiations with the
European Union under the Cotonou Agreement – will be a tough test for Burundi's capacity to
formulate trade policy.  In addition, there is also the economic recovery programme, involvingimportant trade and sectoral policy reforms, including the liberalization of goods and services sectors.
In order to ensure the credibility and irreversibility of unilateral reforms (carried out independently),
they must be consolidated during multilateral and regional negotiations.  Technical assistance
priorities are:  (i) identification of important sectors and issues;  (ii) training in negotiating techniques;
and (iii) identification of the reforms to be ad opted in order to implement the results of the
negotiations.
71. As regards negotiations on trade in services, Burundi needs technical assistance on how to
structure its specific commitments.  This assistance must not only be aimed at negotiators, but also
ministry officials responsible for formulating sectoral policies on services.  For example, the Ministry
of Transport, Post and Telecommunications has requested assistance specific to its field to allow it toidentify how sectoral reforms could become specific commitments at the multilateral level.  The
Central Bank has indicated that it needs technical assistance to carry through its policy on the
liberalization of exchange rates and to totally eliminate the two-track system that has operated in
Burundi for several years.
(ii) Supply constraints
72. As is the case in many LDCs, supply constraints are one of the main barriers to expanding
Burundi's foreign trade.  This is mainly due to the following factors:  Burundi's landlocked situation,which makes freight transport services and freight charges too costly;  quality management;  the lack
of qualified personnel;  difficult access to technology;  and the lack of trade information.  The under-
developed banking system makes access to financing difficult, as the interest on long-term loans is
20 to 22 per cent.  The cost of certain public services is another factor;  for example, electricity rates
are more favourable to households than other users, with higher rates for large, commercialconsumers (Chapter IV(3)(ii)(a)).
73. A large number of the supply constraints stem from the poor quality of the infrastructure used
to store perishable goods and problems with air transport, in a country already handicapped by its
geographical location (landlocked).  This situation seems to have noticeably reduced the possibilities
for developing so-called "non-traditional" line s of production, in which Burundi would have a
comparative advantage.
74. Certain issues related to infrastructure can be found in the interim PRSP and in the
Government's sectoral strategies, including those regarding privatization.  The introduction of private
mobile telephone operators has slightly improved access to means of telecommunication in Burundi,
which had one of the lowest teledensities in the world.
75. The Government is aware of the fact that an improvement in economic competitiveness
depends on the reform of State-owned enterprises.  The financial situation of the majority of these is
weak, and their investments do not often reflect the realities of the market.  Enterprises which should
provide infrastructural services are often not in a position to do so satisfactorily.  They are a
considerable financial burden on the Government and generate a serious misallocation of resources.
The Government has initiated a reform process (Chapter III(4)(ii)).  The technical assistance andBurundi WT/TPR/S/113
Page 25
capacity-building needs for carrying out this programme are manifold:  training of officials
responsible for managing State-owned enterprises a nd implementing their internal reforms;  training
of experts to strengthen the capacity of the State Enterprises Service;  development of diagnostic
studies for certain enterprises in the context of their privatization;  and support in establishing an
adequate regulatory framework for those sectors for which liberalization or privatization is planned.12
(iii) Integration of trade into development strategies
76. Burundi is a participant in the Integrated Framework, which emphasizes the need for each
country to take its trade priorities into account in its national development plan or poverty reduction
strategy.  If foreign trade is to stimulate economic growth that improves the living conditions of the
poor, integration should be at the political and institutional levels, and in partnership between the
Government and donors.
77. In Burundi, political integration is not yet systematic.  Although several of the priority areas
in the interim PRSP completed in March 2002, and the final version of the PRSP completed in
December 2002, are closely concerned with trade policy issues, trade is not explicitly recognized as a
poverty reduction strategy.  An Integrated Framew ork diagnostic study is scheduled to be conducted
in the first half of 2003.  This will allow certain trade policy-related priorities to be identified, so thatthey could then be included in future revisions of the Poverty Reduction Strategy Paper.
78. At the institutional level, integration will involve the supervision of all economic policy
reforms by the Vice-President's Office and the Pe rmanent Secretariat for following up economic and
social reform.  The Ministry of Trade has also designated a single focal point for the Integrated
Framework and the PRSP.  However, there are plans to revive a committee on trade policy
coordination that involves the Ministry of Trade and other ministries responsible for different aspects
of economic policies.
79. The round tables held in Paris (December 2000) and Geneva (December 2001) gave donors
and funding agencies their first opportunity to coordinate their support for Burundi's transition and
reconstruction programme.  However, coordination of specifically trade-related assistance still needs
to be improved.  The implementation of the Integrated Framework should allow donors to target their
technical assistance according to the priorities established by the Government.  There are plans todesignate a donor to act as facilitator.
                                                     
12 Government of Burundi (1999).