RESTRICTED
WORLD TRADE WT/TPR/D/10
19June1997
ORGANIZATION(97-2534)
Trade Policy Review Body Original: English
TRADE POLICY REVIEW MECHANISM
Review ofCyprus
Communication from theDiscussants
Inpursuance ofAnnex 3,paragraph C(iv)oftheWTO Agreement, thefollowing areoutlines
ofthemain points toberaised bythediscussants, Mr.Wilhelm Meier (Switzerland) and
Mr.Michael Stone (Hong Kong), attheTrade Policy Review ofCyprus on25-26 June 1997.
Itisrecalled thatthediscussants actintheirpersonal capacity.
(a) Wilhelm Meier
- Economic policy andtrade policy inthecontext oftheintegration ofCyprus intheEuropean
Union.
- Strategic development plan: sectoral policies andupgrading ofCyprus 'sindustrial base
(b) Michael Stone
Cyprus isheavily dependent onexternal trade andonitsgrowing services sector foreconomic growth
andforemployment. Much hasalready beenachieved toliberalise keyareas ofeconomic activity.
Butitwould beinteresting toknow more about howtheGovernment intends:
- topromote investment inkeyareas (which hasfallen behind targets)
- topromote competition inareas where itmaybelimited atpresent
- todealwiththerelated issues ofreducing thesubsidies which exist
- removing oreasing restrictions oncapital flows andlevels offoreign ownership
Onthefiscal side, while thedeficit hasbeencapped andreduced inrecent years, itremains -and
increased again in1996. Thesocial security fundalsoappears tobeindeficit. TheGovernment 's
share ofGDPisabout 35percentandonaslowrising trend. Itwould beuseful tohaveamplification
about thelongtermaimoftheGovernment withregard tothesizeofthepublic sector vis-a-vis the
private sector. Itwould alsobehelpful tohearabout thesoundness orfragility ofthetaxbaseand
thetypes ofmeasures thattheGovernment could taketoreduce expenditure orincrease taxes inthe
event suchproved necessary.
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Note: Thiscommunication issubject torestricted circulation andpress embargo untiltheendoftheMeeting
oftheTrade Policy Review Body onCyprus.