PRESS/TPRB/61
17September 1997
TRADE POLICY REVIEW BODY
REVIEW OFBENIN
TPRB 'SEVALUATION
TheTrade Policy Review Body oftheWorld Trade Organization (WTO) concluded itsfirst
review ofBenin 'stradepolicies on15and16September 1997. ThetextoftheChairperson 'sconcluding
remarks isattached asasummary ofthesalient points which emerged during thediscussion.
Thereview enables theTPRB toconduct acollective examination ofthefullrange oftrade
policies andpractices ofeachWTO member country atregular periodic intervals tomonitor significant
trends anddevelopments which mayhaveanimpact ontheglobal trading system.
Thereview isbased ontworeports which areprepared respectively bytheWTO Secretariat
andthegovernment under review andwhich cover allaspects ofthecountry 'stradepolicies, including:
itsdomestic lawsandregulations; theinstitutional framework; bilateral, regional andother preferential
agreements; thewider economic needs andtheexternal environment.
Arecord ofthediscussions andtheChairperson 'ssumming-up, together withthesetworeports,
willbepublished induecourse asthecomplete tradepolicy review ofBenin andwillbeavailable from
theWTO Secretariat, Centre William Rappard, 154ruedeLausanne, 1211 Geneva 21.
Since December 1989, thefollowing reports havebeencompleted: Argentina (1992), Australia
(1989 &1994), Austria (1992), Bangladesh (1992), Benin (1997), Bolivia (1993), Brazil (1992 &1996),
Cameroon (1995), Canada (1990, 1992, 1994&1996), Chile (1991), Colombia (1990 &1996), Costa
Rica(1995), Côted'Ivoire (1995), theCzech Republic (1996), Cyprus (1997), theDominican Republic
(1996), Egypt (1992), ElSalvador (1996), theEuropean Communities (1991, 1993&1995), Fiji(1997),
Finland (1992), Ghana (1992), Hong Kong (1990 &1994), Hungary (1991), Iceland (1994), India
(1993), Indonesia (1991 and1994), Israel (1994), Japan (1990, 1992&1995), Kenya (1993), Korea,
Rep.of(1992 &1996), Macau (1994), Malaysia (1993), Mauritius (1995), Mexico (1993), Morocco
(1989 &1996), NewZealand (1990 &1996), Nigeria (1991), Norway (1991 &1996), Pakistan (1995),
Paraguay (1997), Peru(1994), thePhilippines (1993), Poland (1993), Romania (1992), Senegal (1994),
Singapore (1992 &1996), Slovak Republic (1995), South Africa (1993), SriLanka (1995), Sweden
(1990 &1994), Switzerland (1991 &1996), Thailand (1991 &1995), Tunisia (1994), Turkey (1994),
theUnited States (1989, 1992, 1994 &1996), Uganda (1995), Uruguay (1992), Venezuela (1996),
Zambia (1996) andZimbabwe (1994).
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TRADE POLICY REVIEW BODY
Review ofBenin
CONCLUDING REMARKS BYTHE CHAIRPERSON
Thefirsttrade policy review ofBenin wasconducted bytheTrade Policy Review Body on
15-16 September 1997. These remarks, prepared onmyownresponsibility, areintended tosummarize
thediscussion andnottobeafullreport. Thisreport willbecontained intheminutes ofthemeeting.
Thediscussion developed under sixmain themes:
Progress andprospects foreconomic liberalization
Benin wascommended ontheinstitutional reforms andpositive macroeconomic performance
since1990. These hadbeenreflected insolideconomic growth, improved public finances andamodest
rateofinflation. Some Members expressed concern about thehighdependency ofBenin 'stradestructure
oncotton exports, anditsvulnerability totradepolicy changes inNigeria. Inthisregard, theyinquired
about plans fordiversification ofexport products anddestinations. Members alsocommented onthe
large scaleoftheinformal sector; inquiries weremade about howitcould bebrought intotheformal
economy andwhether thismight easetheprocess ofliberalization.
Inregard tothelegalstructure fortrade andinvestment, Members noted theongoing work
toenact various newlawsandsought information onprogress made. Notewastaken oftheadoption
ofanewinvestment codewhich, however, hadnotyetresulted insignificant investment flows. In
thisconnection, questions wereraised concerning thescope forfurther simplification ofinvestment
procedures, including theadoption ofautomatic approval anda"single window".
Inresponse, therepresentative ofBenin noted hisgovernment 'slong-standing concern over
thecountry 'sdependence onasingle crop, andcontinued efforts todiversify theeconomy, particularly
agricultural production. Henoted thatthree-fourths ofalleconomic activity takesplace intheinformal
sector, which theGovernment considered akeyelement tosupport Benin 'sgrowth. Thus, avast
programmewasinplacetoprovideaproperframeworkforinformalactivities,andeventuallyincorporate
them intotheformal economy.
Therepresentative ofBenin recognized theneedtoreview theInvestment Code of1990. The
draftrevision contained plans toabolish several sectoral restrictions, andtoincrease thenumber of
fiscal andother privileges. Inorder toensure consistency ofapproaches within theWAEMU, Benin
would change itscurrent investment legislation onlyaftertheUnion decided onaregional code. It
wasalsonoted thattostrengthen itsinvestment framework, Benin hadsigned orwasnegotiating various
bilateral andmultilateral investment agreements. TheGovernment wasalsoworking onthecreation
ofanInvestment Promotion Centre. Therepresentative stressed thatthenewinitiatives made no
discrimination between foreign anddomestic investors.
Transparency issues
Members commented favourably upon Benin 'sclear andsimple tariff structure. However,
questions wereraised onthepublic availability ofthetariff schedule. OneMember requested acopy
ofthetariffschedule. Concern wasalsoexpressed overthecomplexities ofcustoms andpreshipment
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inspection procedures, including themechanism usedforestablishing import prices. Inthisregard,
questions wereasked about Benin 'splans toimplement theHarmonized System ofClassification and
theWTO Customs Valuation Agreement. Itwasnoted thatBenin hadnotnotified anydelay inthe
application oftheAgreement under itsArticle 20.
Questionswerealsoraisedovertheproceduresforregistrationofimporters,especiallyregarding
thestatus of"occasional" importers (importateurs occasionnels )withregard toborder andinternal
taxation, thelistofgoods reserved toapproved importers (importateurs agréés ),aswellasthe
requirement formembership intheChamber ofCommerce andrulesapplied togoods intransit. Some
Members noted theabsence ofaneffective appeal mechanism against administrative decisions andurged
Benin toupdate itslegalstructure inthisregard.
Inresponse, therepresentative ofBenin outlined therequirements fortheregistration of
importers, goods intransit, andtheoperation ofthepreshipment inspection mechanism. Hesaidthat
hiscountry usedtheBrussels definition ofcustoms value andthatthecustoms tariffwasreadily available
tothepublic. TheHarmonized System hadalready beenadopted, andthenewcodebeing printed
usedthatclassification.Customsproceduresweretransparent,andthiswouldbeenhancedbytheeventual
binding oftariffs atthelevelofthewhole WAEMU. Domestic legislation toapply theWTO Customs
Valuation Agreement would alsobeadopted within theframework oftheWAEMU. "Occasional"
importers without animport cardboreapenalty of1%ofthec.i.f. value ofgoods overandabove
usual tariffs andtaxes, toencourage them tomove intotheformal sector. Prices established bythe
PSIinspection company weregenerally based onthose intheexporting country. TheUnion 'streaty
fortheHarmonizationofBusinessRightscomplementedBenin'sappealmechanismsagainstadministrative
decisions.
Other specific measures
Generally, Members appreciated theconsiderable stepstaken byBenin toliberalize itsimport
markets, andtoreduce export restrictions. Benin wasurged tocontinue itstrade liberalization and
toembed itwithin therulesandprinciples ofthemultilateral trading system byincreasing itsbinding
commitments.
Concernwasexpressedoverthelackofclearlegislativeguidelinesforgovernmentprocurement.
Inthisrespect,informationwassoughtonthepresentstatusofthedraftlawonGovernmentProcurement.
Questions were raised overthejustification forthecontinuing export banonfoodproducts
(produits vivriers) ,andabout plans forthefuture liberalization ofremaining statemonopolies. Details
werealsorequested onBenin 'suseofrulesoforigin under theWAEMU Agreement. Members sought
confirmation thatBenin maintained noinvestment schemes notifiable under theTRIMs Agreement.
They alsorequested information onthelegal framework for,andpractical application of,Benin 's
intellectual property legislation.
Inresponse, therepresentative ofBenin noted thatBenin didnotmaintain anylocalcontent
requirementsoutsidethosecontainedintherulesoforiginundertheWAEMUandECOWASAgreements
inorder toqualify forpreferential treatment. There wasnobanonexports offoodproducts. Teak
exports hadbeenregulated toprevent thedestruction ofprotected forests. TheLawonGovernment
Procurement hadbeenvoted andpromulgated inAugust 1997, andtheimplementing decree would
besubmitted toParliament shortly. Copyright legislation wasunder review toensure conformity with
theTRIPS Agreement. Inthisrespect, hecalled forassistance toensure coordination between Customs,
theCopyright Bureau (BUBEDRA) andtheMinistry incharge oftelecommunications.
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Sectoral elements
Participants sought Benin 'sviews ontheroleofforeign direct investment intheeconomy,
notably inthefoodprocessing sector andinmining. Some suggested thatBenin might takeadvantage
oftheWTO Decision infavour ofleast-developed andnetfood-importing developing countries, which,
interalia,envisages assistance towards improvements inagricultural productivity andinfrastructure.
Some sought information onprogress inreforming Benin 'slegalstructures soastoliberalize
themainservicesindustries,includingfinancial,maritime,airtransportandtelecommunicationservices.
Theynotedthat,asanessentialpartofthedevelopmentofinfrastructure,thetelecommunicationsservices
industry would benefit fromforeign investment. While amove away fromthecurrent duopoly inair
transport could leadtolower freight costs. Benin wasasked toconsider binding itscurrent, liberalized
financial régime, aswellasmobile telecommunications, intheongoing WTO negotiations onfinancial
services andbasic telecoms. Confirmation wassought thatforeign investment inhotels isallowed,
asbound byBenin under theGATS.
Inresponse, therepresentative ofBenin noted thatmost production andtrade activities had
beenprivatized, including banks, non-life insurance, petroleum production andhotels. Portactivities
hadalsobeendemonopolized, andprivate operators weretobeauthorized formobile telephony; further
reforms inthetelecommunications sector wereinplanning. Private investment wasbeing sought in
theareas oflifeinsurance, petrol distribution, cement andsugar production. Technical assistance was
needed tobindBenin 'slegislation under theWTO Services negotiations currently under way. He
confirmed thattherewasnorestriction inforeign investment inthehotelsector; tourism wasapriority
development sector andcertain state-owned hotels hadalready beenprivatized.
Regional integration
MemberstooknoteofBenin'srecenteffortstoincreaseparticipationinregionaltradeagreements,
including thecustoms union planned among WAEMU countries, Inthisrespect, many participants
asked about theprospects fortheunion, itsexpected timing, andwhether itwould leadtotheabolition
ofnon-tariff measures andthecreation ofaninternal market within theunion. Members emphasized
theriskthatthetariff convergence required byacustoms union could leadtoMFN tariff increases
inBenin. They viewed anysuchincrease asdetrimental toBenin 'seconomy, andsuggested theuse
oftariff bindings under theWTO toreduce suchrisk. Questions were asked regarding thecurrent
stateoftariffandnon-tariff liberalisation under ECOWAS, andwhether thisagreement hadbeennotified
totheWTO.
Inresponse, therepresentative ofBenin declared thatWAEMU 'sfundamental objectives were
toensure rapid convergence towards aneconomic union, withacommon market based onthefree
circulation ofpeople, goods, services andcapital. Important achievements todateincluded theremoval
ofallnon-tariff barriers tointernal trade, andaconsiderable tariffreduction oninternal tradeinagreed
products. Theestablishment ofacommon external tariff wasplanned for1January 1998.
Harmonization oflegislation wasalsounderway intheareas oftaxation, accounting procedures and
investment. Acertain delay hadoccurred intheimplementation oftheUnion. Meanwhile, Benin
intended tomaintain itslevel oftariffs, which wasthelowest ofWAEMU countries; theNational
Assembly would havetoratify anychange intariffs resulting from decisions oftheUnion.
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Benin inthemultilateral trading system
Members highlighted Benin 'sstatus asaleastdeveloped country, anditsconcomitant special
position within themultilateral trading system. Itwassuggested thatwaysshould befound ofensuring
more regular participation byBenin inthework oftheWTO. Inthisconnection, Benin wasasked
about itsexpectations fromtheforthcoming HighLevel Meeting onLeast Developed Countries, notably
regarding market access. Participants alsoinvited Benin tospecify itsneeds fortechnical assistance
inorder tobenefit most from WTO Agreements.
Inresponse, therepresentative ofBenin hoped thattheHighLevel Meeting onLeast Developed
Countries would result incommitments toimprove access tomarkets, increase thecompetitive capacity
ofLDCs through training andinformation forprivate andpublic sector operators, andcreate asystem
toprotect andencourage investment inLDCs. Hestressed theneedtomaintain differential treatment
fordeveloping countries during thetransition period, andtoprovide effective assistance toLDCs.
Inhisview, thesurvival ofthemultilateral trading system depended onitscapacity toreduce inequalities
andincrease trade onthebasis ofeachmember 'scomparative advantage. Hetherefore called fora
concrete programme ofassistance andinformation toLDCs toimplement theWTO Agreements,
participate infuture negotiations, trainproducers tosatisfy international standards inexport markets
andprepare strategies forthefuture development oftrade, andprovided alistofspecific areas inwhich
Benin would require suchassistance.
*******
Members welcomed theimportant steps taken inrecent years byBenin towards amore open
andliberal economy, through constitutional, legislative andadministrative reforms andprivatization
programmes. They emphasized theimportance ofdiversification oftheeconomy andtheneedfor
development tobepursued onasustainable basis. Members alsostressed theimportance offurther
steps toincrease predictability, transparency andcertainty inBenin 'strade practices. Theneedfor
improved access invarious fields ofservices wasparticularly noted. Overall, Members offered strong
encouragement toBenin tocontinue andaccelerate thereform process inalleconomic areas and
responded positively toBenin 'srequests forassistance intheframework ofWTO activities.
END