WT/TPR/S/90 Trade Policy Review
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IV. TRADE POLICIES BY SECTOR
(1) INTRODUCTION
1. Agriculture, mainly the sugar industry, has been a leading sector of the Mauritian economy.
It has provided capital to the other sectors, and together with the export-led strategy implemented by
Mauritius and preferential market access provided by developed countries, has contributed to the
diversification within and away from the sugar industry.  Sugar, textiles and clothing, tourism, andfinancial services are currently the four pillars of the Mauritian economy.
2. For food security purposes, Mauritius maintains import, export, and price controls, and
strategic reserve stocks on certain agricultural products.  Marketing boards are in place and
monopolies have been granted to certain public enterprises over the importation of certain products.
Incentives are provided to consolidate the agricultural base and to reduce production costs (e.g. input,freight, and irrigation costs).  Quotas are maintained on imports of potatoes and on exports of chilled
fish.  Imports of sugar and chocolate confectionery and bubble/chewing gum in the form of cigarettes
are prohibited.  High production costs (wages in particular), heavy and costly institutional framework,
and cumbersome land conversion procedures are among the major impediments to the further
development of the sugar industry.  Customs tariffs on agricultural imports range from zero to 80%on, inter alia , cane or beet sugar and chemically pure sucrose (in solid form), molasses resulting from
the extraction or refining of sugar, and on other food products (Tables AIII.1 and AIV.1).
3. The manufacturing sector is dominated by textiles and clothing.  Export-processing-zone
companies account for the bulk of the production.  As a response to the changing international
environment (increasing competition resulting from the dismantling of the Multifibre Arrangement
and post Lomé ACP-EU Agreements) and to rising production costs, Mauritius' manufacturing policy
has focused on market and product diversification (e .g. sectoral integration and shift to higher-value
products, delocalization of low-cost activities to neighbouring countries), and on improvement of
competitiveness (through various incentive schemes, and elimination or reduction of customs tariffs
on inputs and equipment).  Certain manufactured products are subject to import and export controls,
to the maximum markup system, and to compulsory standards.  Customs tariffs on manufactured
products range from zero to an ad valorem  equivalent rate of 360%;  the highest rates apply to
textiles, clothing and leather products, and metallic and non-metallic furniture and fixtures
(Table AIV.1).
4. In terms of contribution to GDP, the services  sector, dominated by tourism and financial
services, is the most important in the economy.  Mauritius is a net exporter of services.  Commitments
made by Mauritius under the GATS largely reflect the current state of liberalization of the sector;monopolies or exclusive rights held by public enterprises limit competition in certain branches
(telecommunications, postal, and transportation services) and contribute to maintaining production
costs high.  Measures affecting presence of natural persons are unbound.  Mauritius has maintained
MFN exemptions (in financial services) under Article II of the GATS on reciprocity grounds.
(2) A
GRICULTURE AND RELATED ACTIVITIES
(i) Overview
5. Around two fifths of Mauritius' total land area of 2,040 km.2 are under cultivation.  The
decline in the share of agriculture (including sugar industry, fisheries, livestock, and forestry) in the
economy, which started in the 1980s, accelerated in the 1990s.  Agriculture employs some 9% of the
active population (down from about 13% in 1996), and contributes some 6% to real GDP (down fromMauritius WT/TPR/S/90
Page 55
some 12% in 1990)1, and around one quarter to foreign exchange earnings (down from some 30%
in 1995).
6. Sugar cane is the main crop (section (ii)(a) be low).  Other cash crops grown in Mauritius
include tea and tobacco.  Mauritius also produces flowers, mainly anthuriu m flowers;  revenue from
exports of anthurium flowers amounted to Mau Rs 70 million in 1998.  Food crops include potatoes,
maize, cassava, spices, fruit, and vegetables.  The fisheries subsector is not developed althoughMauritius has great potential (including exclusive economic zones) for fishing activities;  fish
production has been falling since 1994.  Mauritius produces poultry and pork in substantial quantities,
and cattle, deer, goats, and sheep in limited quantities.  Forestry is not developed;  it is restricted to
marginal lands.
7. As a tropical island, Mauritius is exposed to the vagaries of climate.  It is generally cyclone
prone, the severe cyclones reducing crops by at le ast 30%.  In addition, over the past decade, four
years out of ten were drought years.  In 1998, a severe drought resulted in a 40% loss of the 1998/99
harvest:  some 5,137 ha. out of 72,437 ha. cultivated with sugar cane were completely wiped out, and
sugar production fell to 373,294 tonnes.  Drought and cyclones also have adverse effects on forests.
8. Mauritius' agricultural policy is aimed at ensuring food security, and diversifying production
within and away from suga r.  To this end, import and export controls by means of permit have been
set up, as well as price controls.  Indeed, imports and exports of agricultural products require the
approval of, and a sanitary/phytosanitary certificate from, the relevant authorities, and a permit from
the Commerce Ministry (Chapter III(2)(v);  III(3)(iii);  and III(4)(iii)).  Imports of agricultural goods
that compete with local production are controlled by bodies such as the Agricultural Marketing Board
(AMB), the Tea Board, the Tobacco Board, the Ma uritius Sugar Syndicate and the Mauritius Meat
Authority, to give priority to domestic suppliers.  Imports of certain products are still under themonopoly of the State Trading Corporation (STC) (e.g. flour and ration rice), or the AMB, which also
monitors the procurement and sale of the main controlled agricultural products (Chapter III(4)(iv)).
2
Strategic reserve stock requirements are maintained for rice and flour (at least one-monthconsumption above the normal STC stock of one to two months), and for, inter alia,  potatoes, onion,
and garlic (at least one-month consumption to be maintained by the AMB).
9. Because of scarcity of land, agricultural diversification means the reallocation of this resource
and its better use.  In this respect, the Sugar Efficiency Act was enacted in 1988 to promote both sugar
and non-sugar agriculture.  The Act, as amended up to 1999, is aimed at preserving land for
agricultural purposes, bringing people back to the sector, and enhancing compensation to workers in
the sugar branch and efficiency of sugar production.  The Act provides for tax rebates to planters andmillers of sugar cane (section (ii)(a)); tax rebates for cultivation of crops other than sugar cane; and a
land conversion (use of agricultural land for other purposes) tax (Table IV.1).
3
10. The Agricultural Development Scheme also provides incentives for the consolidation of
Mauritius' agricultural base;  food manufacturers are eligible for the Technology Diffusion Scheme
(Chapter III(4)(i) and Table AIII.4).
11. The Freight Rebate Scheme provides for partial refunds of freight costs for certain exports,
including agricultural products (Chapter III(3)(v)).  The Government also provides irrigation systems
                                                     
1 Central Statistical Office (2000) and WTO (1995).
2 An increased role is envisaged for the Agricultural Marketing Board to support the marketing of new
crops.
3 Under Section 5 of the Sugar Industry Efficiency Act, no land will be put to any non-agricultural use
except with the prior written authority of the Agriculture Minister and upon payment of the land conversion tax.WT/TPR/S/90 Trade Policy Review
Page 56
in needy areas;  around 20-25% of irrigation costs are recovered from the beneficiaries, with the
Government currently disbursing Mau Rs 175 million per year.  Planting materials and products
subject to price controls have been eligible for subsidy (Table IV.2).  Data on subsidy per unit/volume
of product, and the calculation method and basis are not available.  The Government budget for the
Food and Agricultural Research Council amounts to some Mau Rs 80 million per year.
Table IV.1
Land conversion tax
Rates of land conversion tax (Mau Rs per hectare)
Area of land converteda
Category IbCategory IIc
Less than 0.25 hectare 250,000 Nil
0.25 hectare but less than 0.50 hectare 500.000 50,000
0.50 hectare but less than 1.00 hectare 1,000,000 1,000,000
1.00 hectare but less than 5.00 hectares 2,000,000 2,000,000
5.00 hectares and above 3,500,000 3,500,000
a Where more than one conversion is effected by one and the same person within a period of three years, the land conversion tax
payable by him shall be on the basis of the aggregate area of all land converted by him during that period.
b The rates specified in Category I in the second column are applicable to land which, on 1 January 1981, formed part of a large r
extent of agricultural land which had a total acreage exceeding 10.5522 hectares which may or may not have been subsequently
subdivided into two or more lots.
c The rate specified in Category II in the third column is applicable to all other agricultural land.
Source: Sugar Industry Efficiency Act, 1988, as amended up to 1995.
Table IV.2
Subsidies for planting materials and products subject to price controls, 1995-99
(Mau Rs '000)
1995 1996 1997 1998 1999
Seed potatoes 6,773 4,736 6,295 7,135 7,775
Imported potatoes 10,636 35,197 11,008 .. ..
Rodrigues onions 502 824 889 793 ..
Traditional onions 875 530 31 1,800a..
Milk 4,864 4,960 4,589 4,093 3,031
Imported onions .. .. .. 13,031b..
Other seeds 262 103 54 .. ..
Subtotal 23,912 46,350 22,866 26,852 10,786
Storage refund on local potatoes 1,777 2,306 1,429 .. ..
Total 25,689 48,656 24,295 26,852 10,786
.. Not available.
a Some Mau Rs 1.8 million were refunded exceptionally for local onions purchased from La Chaumiere region (an onion-
producing region in the western part of Mauritius.
b Some Mau Rs 13.0 million were reimbursed to the Agricultural Marketing Board to meet higher costs of importation of onions
from overseas.
Source: Information provided by the Mauritian authorities.
12. A Master Plan on Agriculture was adopted in 1997.  The Plan provides for a strategy for
agricultural development in the non-sugar subsector up to the year 2010.  In this respect, severalsub-committees have been set up.
13. The simple average tariff in agriculture (Major Division 1 of ISIC Revision 2) is 14%, with a
maximum tariff rate of 80% (Chapter III(2)(ii)(b)).Mauritius WT/TPR/S/90
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(ii) Key subsectors
(a) Sugar
14. The sugar industry is the main branch of the agriculture sector.  Sugar cane, a pillar of the
economy, accounts for some 80% of cultivated land, more than half of agricultural income, and
occupies some 30,000 planters.  Miller-planters account for nearly three fourths of cane production.
Mauritius has 14 sugar mills, down from 17 in 1995.4  It is among the world's ten largest exporters of
sugar.5  Sugar accounts for around one fifth of foreign exchange earnings.  Mauritius has a full
potential production of 650,000 tonnes in a g ood year, and 620,000 tonnes in a normal year
(Table IV.3).  The annual average yield is around 8 tonnes of sugar per hectare, and the extraction rate
around 10.5%.  Labour accounts for some 55% of total production costs of sugar.
Table IV.3
Basic statistics on the sugar industry, 1994-98
1994 1995 1996 1997 1998
Area under cultivation (ha.) 77,468 76,838 76,814 78,326 78,021
Area harvested (ha.) 73,017 72,010 71,800 72,758 74,013
Cane yield per hectare (tonnes) 65.90 71.60 73.30 79.50 78.11
Cane production (tonnes) 4,813,545 5,159,244 5,260,138 5,787,070 5,781,095
Sucrose content (% cane) 11.93 11.95 12.71 12.18 12.36
Sugar recovered (% cane) 10.39 10.46 11.19 10.73 10.88
Tonnes of cane per tonne of sugar 9.62 9.56 8.94 9.32 9.19
Sugar yield per hectare (tonnes) 6.85 7.49 8.20 8.53 8.49
Sugar production (tonnes) 500,209 539,521 588,455 620,589 628,588
White 39,691 6,510 7,359 5,296 4,346
Raw 460,518 533,011 581,096 615,293 624,242
Source: Central Statistical Office;  and the Mauritius Sugar Industry Research Institute.
15. The sugar industry has large linkages with the rest of the economy.  In fact, diversification
within the sugar subsector has consisted of production of special sugars, use of bagasse for electricity
generation and of cane interlines to grow vegetables, and research and development in respect of the
use of molasses.  Special sugars, as well as molasses and derived products, are exported.  Mauritius
intends to increase production of special sugars currently supplied by four factories.  Moreover,
sugar-factory-sited power plants (using bagasse and coal) will account for nearly 50% of Mauritius'total demand for electricity by end-2001 and 60% in 2005.
6  Other by-products of the sugar industry
include alcohol and alcohol products.
16. Several bodies intervene in the sugar industry.  The Mauritius Sugar Authority (MSA) is the
coordinating body between the Government and the various organizations of the sugar industry.  The
four members of its Board of Directors are appo inted by the Agriculture Minister;  the Board is
chaired by the Permanent Secretary of the Agriculture Ministry.  The Mauritius Sugar Syndicate
(MSS) is the marketing board:  it is the sole exporter of sugar and also the sole supplier to the local
market.7  The Mauritius Sugar Producers' Association (MSPA) regroups 13 of the 14 largest estate
factories (the Government owns and administers one estate with one factory).  The members of the
                                                     
4 Mauritius Chamber of Agriculture (2000).  Foreigne rs cannot hold more than 25% of the capital of a
sugar company.
5 Dunn and Bradstreet (2000).
6 The production of electricity from bagasse eco nomises on the use of coal, by more than
200,000 tonnes per year.
7 All sugar producers in Mauritius are members of the MSS.WT/TPR/S/90 Trade Policy Review
Page 58
MSPA own some 55% of the cane land and accoun t for 68% of total sugar production in Mauritius.
The Mauritius Sugar Terminal Corporation (MSTC) , jointly held by the Government and sugar
producers, provides storage facilities;  its budgetary expenses (Mau Rs 131.5 million in 1999/2000)
are financed by the MSS through revenue from a Global Cess paid to the MSA.
17. The Bagged Sugar Storage and Distribution Corporation Ltd. (BSSD) is responsible for the
storage and delivery of all bagged sugar for local and export markets.  Its shareholders are the MSTCand the State Investment Corporation.  Its operating expenses (Mau Rs 29.5 million in 1999/2000) are
financed by the MSS.  The industry also has its own insurance scheme, the Sugar Insurance Fund
Board.  Other bodies intervening in the industry include the MSS Laboratory (for inspection and
testing of raw sugars), the Cane Planters and Millers Arbitration and Control Board, the Mauritius
Sugar Industry Research Institute, the Sugar Planters Mechanical Pool Corporation, the SugarIndustry Labour Welfare Fund, and the Farmers Service Corporation.
18. Almost all the sugar produced in Mauritius is exported (Chart IV.1).  Mauritius' sugar exports
have benefited from preferential market access to the EU (in accordance with the ACP-EU Sugar
Protocol and the Special Preferential Sugar Agreement under the EU Sugar Regime) and to the
United States (under the U.S. Sugar Protocol a nd then under the U.S. African Growth Opportunity
Act (AGOA) since January 2001).  Under the ACP-EU  Sugar Protocol, Mauritius benefits from a
quota of some 507,000 tonnes tel quel (491,030.5 tonnes white sugar equivalent) for delivery between
1 July and 30 June every year.  The sugar, consisting largely of "bulk raws" (more than 80% of
Mauritius' exports of sugar under the Protocol) for refining, is sold by the MSS to commercial buyers
(mainly Tate & Lyle) in the EU.  The "bulk raws" for refining are sold at the ACP-EU guaranteed
price, equivalent to the EU raw sugar intervention price (€ 523.7 per tonne)
8, unchanged in ECU and
then Euro terms, since 1986.  Nevertheless, the price is still relatively high (Chart IV.2).  In addition,under the Special Preferential Sugar Agreement, Mauritius is allowed to export some 85,000 tonnes
(white sugar equivalent) to the EU.
9  Exports of sugar to the EU account for nearly 90% of total
revenue from the industry.
19. Mauritius had been allowed to export some 12,000 tonnes of raw sugar under the GSP
duty-free treatment of the United States;  with th e entry into force of AGOA for Mauritius, its exports
of certain manufactured products, including sugar, are eligible for duty- and quota-free treatment
in the United States.  Furthermore, under the SADC Sugar Protocol, Mauritius is allowed to export
1,000 tonnes of sugar duty free to the other member countries.  A marginal percentage of the
production is also exported to other countries, including Switzerland, Israel, New Zealand, and Hong
Kong, China.
20. Foreign exchange earnings from sugar exports are required to be sold on the local market to
the Bank of Mauritius (50% of the total) and to commercial banks (50%) at negotiated exchange rates.
Sugar proceeds are used mainly for payment to pro ducers (on a weekly basis), for remittances on their
behalf in respect of the Global Cess and of the Sugar Insurance Fund Board premiums, and for
subsidies provided on local consumption.  Additional revenue arising from the utilization of bagasse(by the Central Electricity Board and by millers) for purposes other than sugar are also distributed to
sugar producers.
                                                     
8 Mauritius Sugar Syndicate (2000).
9 The 1995 ACP/EU Special Preferential Sugar Agreement aims to compensate for the sugar deficit of
EU refiners for a period of six years to 2001.Mauritius WT/TPR/S/90
Page 59
024681012
1994/95 1995/96 1996/97 1997/98 1998/99 1999/00Chart IV.1
Sugar proceeds, 1994-2000
Mau Rs million
Special Preferential Sugar Agreement.
Mauritius Sugar Syndicate (2000), Report and Statement of Account 1999/2000.European Union (protocol)Local SPSa
USA and World
a
Source:
21. Mauritius imports the bulk of sugar requirements for the local market.  Sales of local
production on the domestic market represent a marginal percentage (below 7% of the production).
The sales prices on the local market are set by the Government.  Since 1995, the prices have been:
Mau Rs 3,710 per tonne for white sugar to a wholesaler;  Mau Rs 2,210 per tonne for raw sugar to a
wholesaler (unchanged since 1992);  and Mau Rs 8,300 per tonne for white or raw sugar for industrial
usage (the industrial price of sugar has increased in recent years).10  Domestic prices of sugar for
direct consumption are maintained low (below production costs) thanks to subsidies of some
Mau Rs 100 million a year granted by local producers.11  The subsidies consist of, inter alia ,
compensation for costs pertaining to imported sugars and/or to the five traditional suppliers of white
sugar for the local market.  All industrial users of sugar are required to source this input from the
MSS.12  For monitoring purposes, exports of locally manufactured products with a sugar content are
subject to a permit from the Ministry of Industry, Commerce and International Trade
(Chapter III(3)(iii));  the permit is issued upon presentation of a certificate from the MSS attesting thatthe industrial price has been paid on the sugar content of the products.  Imports of sugar and chocolate
confectionery and bubble/chewing gum in the form of cigarettes into Mauritius are prohibited
(Chapter III(2)(v)).
                                                     
10 Government Notice No. 106, 1995.
11 Mauritius Sugar Syndicate (2000).
12 The 1987 Supplies Control Act (as amended).WT/TPR/S/90 Trade Policy Review
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100200300400500600700
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00Chart IV.2
Average comparative prices for raw sugar, 1990-2000
US$ f.o.b.
WorldUnited StatesSPSaEuropean Union
Special Preferential Sugar Agreement.
Mauritius Sugar Syndicate (2000), Report and Statement of Account 1999/2000.a
Source:
22. A Global Cess is levied annually on sugar proceeds.13  Revenue from the Cess amounted to
Mau Rs 450 million in 1999/2000 (i.e. some Mau Rs 1,202 per tonne) and to Mau Rs 500 million
in 1998/99 (i.e. about Mau Rs 794 per tonne).14 Revenue from the Global Cess is used to finance the
administrative expenses of the MSA, and the annual budget and capital expenditure of, inter alia , the
MSTC, the Cane Planters and Millers Arbitration and Control Board, the Mauritius Sugar IndustryResearch Institute (the Sugar Energy Development Project having lapsed), the Sugar Planters
Mechanical Pool Corporation, and the Farmers Service Corporation.
23. Increasing production costs, labour market rigi dities, high costs of centralization through
heavy and costly institutional framework financed by revenue from the global cess, and cumbersome
land conversion procedures are among the impediments to the further development of the sugarindustry.
15  Residential and industrial development has reduced (by some 500 ha. per year) the land
area under sugar cane.  The Government intends to pa rtially offset this loss by a gradual increase of
5,000 ha. in the area under irrigation and by bringing 1,000 ha. under cultivation through derocking.
To maintain output and profitability, productivity is to be improved through the grouping of small
planters, increased mechanization, more efficient irrigation systems and cultural practices,introduction of high-yield varieties, and adoption of lower cost methods in fields, factory, and
marketing operations.
16  The Government currently funds major irrigation projects, and subsidizes,
inter alia , tractor rentals, cuttings, and electricity for pumping water for irrigation purposes.
                                                     
13 The 1984 Mauritius Sugar Authority Act No. 27.
14 Mauritius Sugar Syndicate (2000).
15 JEC (2001).
16 Ministry of Economic Development, Productivity and Regional Development (2000), Highlights.Mauritius WT/TPR/S/90
Page 61
24. Drought from end 1998 to early 1999, combined  with cyclone Davina in February 1999,
resulted in poor harvest, with a 40% reduction in sugar production to 373,294 tonnes in the 1998/99
crop.  As a result, sugar requirements for the local market for the period from July 1999 to June 2000
were imported duty-free by MSS, the sole importer of sugar in Mauritius.17  The Sugar Insurance
Fund Board disbursed Mau Rs 2,265 million to compensate for losses resulting from the drought.  In
March 2000, the Government launched an assistance scheme (loans of up to Mau Rs 100,000 perproject, at concessionary interest rates and through the Development Bank of Mauritius) to
rehabilitate and replant fields that had been severely affected by the drought.
18
25. Imports of sugar and sugar confectionery are subject to an average tariff of 43%, with rates
ranging up to 80% on cane or beet sugar and chemically pure sucrose (in solid form), and on molasses
resulting from the extraction or refining of sugar.
(b) Other cash crops
Tea
26. Annual production of green tea leaf is around 8,000 tonnes, with an average yield of some
11 tonnes (equivalent to some 2 tonnes of manufactured tea) per ha.  The bulk of the production is
from private farmers.  Mauritius produces some 1,500 tonnes of manufactured tea per year, downfrom around 3,800 tonnes in the mid-1990s (Table IV.4).  Foreign exchange earnings from tea exports
are currently equivalent to some Mau Rs 10 million per year.  There are around 200 tea planters,
down from around 600 in 1994.
Table IV.4
Tea area, production and sales, 1995-98
1995 1996 1997 1998
Area (hectares) 2,077 1,108 770 668
Private plantations .. .. 755 668
Wooton Experimental Station and Smallholders .. .. 15 n.a.
Production (tonnes)
Green leaf 27,418.9 13,208.9 9,025.8 7,910.5
Tea 3,785.0 3,785.0 1,787.4 1,487.9
Sales of tea (tonnes)a4,031.5 2,587.1 1,735.4 1,461.4
Exports 2,894.4 1,381.5 436.2 193.8
Local 1,137.1 1,205.6 1,299.2 1,267.6
.. Not available.
n.a. Not applicable.
a Total sales do not correspond to total production because of wastes, samples and variations in stock.
Source: Tea Board.
27. The Agricultural Diversification Programme has contributed to the reduction of the area
under tea from some 3,000 ha. in the early 1990s to 668 ha. in 1998.  Under the Programme, the
Government has vested the Tea Board with the missi on of monitoring the conversion of planters who
are diversifying their tea plots to sugar cane and food crops:  these planters are offered Mau Rs 10,300per arpent to cover land preparation costs, and monthly financial assistance of Mau Rs 2,000 from the
time of uprooting to the time of harvest.  The Government had provided to small tea planters, inter
alia, a complex fertilizer grant (Mau Rs 1 million in 1998), winter assistance (20 cents per kg.
                                                     
17 Exemptions from payment of import duties were granted by the Finance Minister.
18 The loans are granted for mechanization purpos es and for the introduction of new agricultural
techniques.WT/TPR/S/90 Trade Policy Review
Page 62
of green leaf), and special end-of-year assistance (20 cents per kg. of green leaf in 1998/1999).  As
from 2000, this type of financial assistance, including subsidies and fertilizer grants, was terminated
in the tea branch.
28. The Tea Board currently regulates and controls, inter alia , the production of green leaf, and
the manufacture, marketing, imports, and exports of tea.  It sets the conditions of contracts entered
into by planters, metayers and manufacturers, and the producer price of green leaf.  The price is setannually and varies from one region to another.  The Board also arbitrates disputes between persons
engaged in or connected with the tea industry.
29. The importation of tea requires a permit, issued by the Tea Board.  The permit is subject to
payment of Mau Rs 5,000 for black tea and Mau Rs 1,000 for China tea (per consignment).  Imports
of tea are also subject to payment of a fee set at 20% of the c.i.f. value (customs value) to the TeaBoard, a cess of Mau Rs 0.20 per kg. of tea, and a cu stoms tariff of 40%.  Exporters of tea have to be
licensed by the Tea Board and pay a licence fee of Mau Rs 2,000 per year.
Tobacco
30. Some 450 ha. are under tobacco cultivation.  Mauritius currently produces some 700 tonnes
of leaf tobacco per year (Table IV.5).  Over the past five years, consumption of locally manufactured
cigarettes has declined by about 2.6% annually, resulting in an overall decrease of about 11.4% in the
demand for domestic leaf tobacco.
Table IV.5
Tobacco and cigarettes, 1997-99 crops
1997-98 1998-99
(Hectares)
Quota of land allocated 482 528
Virginia flue-cured 435 456
Amarello air-cured 47 72
Area harvested 435 457
Virginia flue-cured 399 413
Amarello air-cured 36 44
(Tonnes)
Leaf production 722.7 701.7
Virginia flue-cured 662.5 640.8
Amarello air-cured 60.2 60.9
(Mau Rs million)
Value of crops 49.9 51.8
Virginia flue-cured 47.6 49.4
Amarello air-cured 2.3 2.4
Average values (per kilo of leaf) (Mau Rs)
Virginia flue-cured 71.81 77.01
Amarello air-cured 38.22 39.58
(Per hectare harvested)
Virginia flue-cured 119,221 119,492
Amarello air-cured 63,952 54,782
Tobacco used in cigarette manufacture (tonnes) Calendar Year 1997 Calendar Year 1998
Domestic leaf 871.6 842.9
Imported leaf 51.6 38.4
Total 923.2 881.3
Source: Tobacco Board.Mauritius WT/TPR/S/90
Page 63
31. Established under the aegis of the Ministry of Agriculture, Food Technology and Natural
Resources, the Tobacco Board controls the production and sale of leaf tobacco in Mauritius.  At the
start of the crop, the Board sets the purchase and sale prices of domestic leaf tobacco after
consultation with representatives of growers and the sole manufacturer.  It purchases all locally
produced leaf tobacco according to an approved grading system.  The Board sets production targets
and allocates permits for the cultivation of tobacco.  It approves the sale prices of cigarettes proposedby the manufacturer, and licenses and controls the importation of leaf tobacco, manufactured tobacco
and tobacco products.
19  The Board also manages the Tobacco Warehouse where the locally produced
leaf tobacco is purchased, bulked (according to respective grades), re-dried, baled, and sold to the sole
cigarette manufacturer.  Revenue generated by the management of the Tobacco Warehouse finances
the recurrent and capital expenditures of the Board.  Research on tobacco cultivation is carried out bythe Agricultural Research and Extension Unit of the Food and Agricultural Research Council, a
parastatal.
32. The Tobacco Board, the tobacco growers, and the manufacturer contribute to a Mechanization
and Inputs Fund, which is managed by the Board and from which interest-free loans are granted to
growers for the repair of barns and purchase of equi pment.  Tobacco growers may also obtain interest-
free credit facilities from the Fund for the purchase of agricultural inputs (including fertilizers and
pesticides) used in the production of tobacco.  Tobacco seeds are provided free of charge to registered
growers.  The Tobacco Board contributes Mau Rs 30,000 annually to the Agriculture Ministry for
production of tobacco seeds.
(c) Food crops
33. Nearly 7,000 ha. are under food crops, up from less than 5,000 ha. in 1988 (Table IV.6).
Mauritius produced some 90,000 tonnes of food crops in 1998, up from some 44,000 tonnes in 1988.This performance was due mainly to an increase in the production of vegetables from 22,000 tonnes
to 60,000 tonnes over the period.  Mauritius is self-sufficient in fresh vegetables.
20  However, it
imports some 60% of its requirements of food commodities.21  Maize, the most important crop in
Rodrigues, is no longer grown for grain.  Domest ic production of tomatoes, at some 11,750 tonnes per
year, partially covers local demand.
34. For self-sufficiency purposes, the Agricultural Marketing Board (AMB) monitors imports of
certain food commodities (taking into account local production), including table potatoes, onions,
garlic, maize, turmeric, and cardamom;  these products are marketed by the AMB (Chapter III(4)(iv)).
It acts as a buyer of last resort for these commodities.  Import and export controls, and a fixed
maximum price system apply to some of these commodities (Chapter III(2)(v);  III(3)(iii);  andIII(4)(iii)).  Imports of food products are subject to sanitary/phytosanitary and labelling requirements
(Chapter III(4)(ii) (b) and (c)).
35. In the case of potatoes, the AMB fixes annual production targets (20,000 tonnes for table
potatoes in recent years) and allocates potato seeds to producers, including the AMB Cooperative
Federation Ltd., and sugar estates that grow potatoes in cane interlines.
22  In general, annual
production falls short of the targets, as potato production in Mauritius is affected by, inter alia ,
                                                     
19 The Tobacco Board ensures that every packet of imported cigarettes bears an approved health
warning.
20 Mauritius Chamber of Agriculture (2000).
21 Ministry of Economic Development, Productivity and Regional Development (2000), Technical
Supplement.
22 Some 1,100 ha. under sugar cane must be converted into potato plantations to meet the target of
20,000 tonnes.WT/TPR/S/90 Trade Policy Review
Page 64
adverse climatic conditions.  Potato seeds are subsidized by the AMB in the amount of  Mau Rs 2,850
per tonne of imported seeds and Mau Rs 3,000 per tonne of locally produced seeds (for ware
production);  and Mau Rs 7,175 per tonne of locally produced or imported seeds for seed production.
Imports of potatoes are subject to quotas (Chapter III(2)(v)).
Table IV.6
Food crops:  area and production, 1996-98
1996 1997 1998
Area
harvested
(Ha.)Production
(tonnes)Area
harvested
(Ha.)Production
(tonnes)Area
harvested
(Ha.)Production
(tonnes)
Fresh vegetables
of which4,557 57,324 4,861 65,263 4,968 57,352
Tomatoes 997 10,877 1,061 12,226 1,040 10,729
Cabbage 340 7,595 331 7,898 357 6,283
Pumpkin 328 7,021 328 6,455 317 5,429
Other vegetables and food crops 1,333 19,945 1,469 24,912 1,446 23,072
Eddoes (arouille) 13 125 12 86 3 36
Ginger 40 784 18 317 27 420
Groundnuts 217 767 228 863 186 551
Manioc 10 140 11 180 9 145
Potatoes (Irish) 543 10,639 815 17,584 829 14,612
Sweet potatoes 50 750 34 532 18 191
Garlic 30 235 11 82 19 131
Onions 341 6,067 294 5,036 305 6,727
Fruits 613 12,360 538 10,517 480 9,605
Bananas 508 9,387 461 8,957 404 8,143
Pineapples 105 2,973 77 1,560 76 1,462
Total 6,503 89,629 6,868 100,692 6,894 90,029
Source: Central Statistical Office.
36. Customs duties range from zero to 80% on food products:  they average some 10% on
first-stage processed food;  about 19% on semi-processed food;  and around 29% on fully processed
food.  Imports of potatoes are subject to the zero rate.
(d) Fisheries
37. The number of fishermen, as well as of boats, is declining:  there were 1,585 fishermen
in 1998 (down from 2,740 in 1994) and 905 boats (down from 1,045 in 1994).  As a result, total fish
production dropped from 18,956 tonnes in 1994 to 12,085 tonnes in 1999.23  The bulk of the catch is
from deep-sea fishing on the banks to the north of the island.  The catch comprises skipjack tuna (51%
of the total), yellowfinger (42%), bigeye tuna (6%) and others (1%).  Aquacultural production remains
marginal;  its development is impeded by limited fresh water resources and coastal areas, highproduction costs (including costs of inputs), and competition from imports.  The Mauritius Tuna
Fishing and Canning Enterprises (MTFCE) Ltd. produces some 17,300 tonnes of canned fish for
export (some 90% of the production) and for the local market (10%).
38. Mauritius imports more than 50% of its requirements of fish.  The Government intends to
develop fisheries within sustainable levels while ensuring that local demand for fishery products aremet.  Therefore, excess fishing in the lagoon has led the Government to encourage fishing in
off-lagoon areas, through the use of fish aggregating devices (mainly the vertical longline technique).
                                                     
23 The cessation of operation of two oceanic purse seiners in the tuna fishery has largely contributed to
the drop.Mauritius WT/TPR/S/90
Page 65
The use of nets is being discouraged:  the Government is implementing a buy-back programme for the
phasing-out of net fishing.  As from 1994, the bank s fishery has been managed through application of
a licensing system for vessels and catch quotas.24  Incentives are provided to prospective investors in
fisheries where the resources are not being optimally tapped.  For the highly migratory tuna, for which
Mauritius does not have fishing capacity, bilateral agreements allow EU and Japanese vessels to fish
within the Mauritian exclusive economic zone.  Other foreign vessels are also allowed to fish for tuna
in Mauritian waters.  Joint-ventures are allowed.
39. Other incentives granted by the Government to fishermen include bad weather allowances
(some Mau Rs 13 million in 1997 and Mau Rs 24 million in 1998), close season allowances,
scholarship allowances to fishermen's wards (Mau Rs 531,375 in the 1998 season), concessionary
loans for purchase of equipment (e.g. fishing vessels and outboard motors), and duty concessions onimported equipment and inputs used in the subsector.
40. The price of fish is market-determined.
25  Imports of fish and fish products are subject to
permits issued by the Commerce Ministry, subject to approval by the Fisheries Ministry and against
payment of Mau Rs 2,000 per individual consignment.  Exports are also subject to permits issued by
the Commerce Ministry, subject to approval by the Fisheries Ministry (Chapter III(3)(iii)).  Exports ofchilled fish are subject to a quota (16.6 tonnes per year distributed between five companies).  Tariffs
on imports of fish and fish products average some 14%, with rates ranging from zero on frozen fish to
15% and 40% on processed or prepared fish products.
41. In 1998, a Ten-Year Development Plan for fisheries was adopted.  The plan emphasizes:
sustainable use of existing resources and protec tion of the marine ecosystems;  maximization of
returns from new and existing fisheries through value addition (e.g. increase in the processing
capacity of the tuna industry);  modernization of the local fleet through upgrading of technology;  andpossible increase in production through cautious development of under-utilized resources, and
diversification of aquaculture.  A National Fisheries Development Authority is being set up to
promote sustainable fisheries development, exports, marketing, product development, andconsumption of fish and fish products (annual per capita consumption is around 19 kg.).
(e) Livestock
42. The livestock comprises cattle, sheep, deer, poultry and pigs (Table IV.7).  The liberalization
of imports of slaughter cattle has increased competition.  Imports account for more than 80%
of Mauritius' requirements of fresh beef.  Th e Government provided investment grants of
Mau Rs 9.1 million in 1998/99, and Mau Rs 5.9 million in 1999/2000 to rehabilitate theslaughterhouse (Central Abattoir) run by the Mauritius Meat Authority (MMA).
43. Under the Milk Marketing Scheme, the AMB purchases milk from producers, and grants
them subsidies of Mau Rs 3.30 per litre (a total of Mau Rs 4 million in 1998).  The Scheme is
operated by the AMB.
44. Deer ranching is being further promoted:  some 10,800 head were killed in 1998 for a total
carcass weight of about 410 tonnes.  Deer is now the primary local fresh red meat industry.  The
Mauritius Deer Farming Cooperative Society Ltd. is the main producer.  State lands are leased to
farmers for deer production.  The Mauritius Meat Producers ' Association (MMPA) sets the "minimum
recommended price" at which farmers sell thei r production.  The Government, through the
Agricultural Research and Extension Unit (AREU) and the Mauritius Research Council, finances
research on deer production.
                                                     
24 In aggregate, the total allowable catches for fishing seasons are not generally filled.
25 The price of frozen fish has been liberalized since August 1997.WT/TPR/S/90 Trade Policy Review
Page 66
Table IV.7
Census of animals belonging to members of the MMPAa, 1996-98
1996 1997 1998
Cattle
Females 3,765 3,887 2,778
Males 1,768 1,659 1,219
Total 5,533 5,546 3,997
Sheep
Females 278 242 170
Males 86 72 44
Total 364 314 214
Deer 65,000 65,000 70,000
Poultry
Layers 243,176 300,549 327,573
Broilers 1,716,413 1,839,798 2,003,143
Total 1,959,589 2,140,347 2,330,716
Pigs
Boars 56 133 119
Sows 261 239 249
Others 1,914 1,803 1,788
Total 2,231 2,175 2,156
a Mauritius Meat Producers' Association.
Source: Mauritius Chamber of Agriculture (2000), Annual Report 1998/1999 .
45. Import and export controls apply to animals and animal products (Chapter III(2)(v);
III(3)(iii);  and III(4)(ii)(b)).  Customs duties on imports of equipment used in the livestock subsectorhave been gradually reduced since the 1998/99 National Budget.  Customs tariffs average nearly 20%
on live animals, and 32% on meat and edible meat offal.
(3) M
ANUFACTURING
46. Manufacturing accounts for around one fifth of real GDP (up from 15% in 1980).  The sector
has been growing at around 6% per year since 1995 (Table IV.8);  its value-added increased fromsome Mau Rs 14 billion in 1995 to Mau Rs 23 billion in 1999.  Manufacturing contributes some 75%
to the total value of merchandise exports (up from 70% in 1993), and nearly 30% to total employment
(down from some 37% in 1993).  The sector is dominated by textiles and clothing (more than 40% of
the production).
Table IV.8
Manufacturing sector:  basic statistics, 1996-99
1996 1997 1998 1999
Output (Mau Rs million) 15,248 16,986 19,453 21,755
Growth rate (%) 6.0 5.7 6.4 5.6
Investment (Mau Rs million) 2,745 3,345 4,530 5,375
Employment ('000) 129.0 132.3 139.9 144.4
Source: The Mauritius Chamber of Commerce and Industry (2000), Annual Report 1999 .
47. Mauritius also produces chemicals and chemical products, paper and printing, jewellery
items, watches and clocks, razor blades, optical goods, electronics, information technology products,
and marble, in addition to sugar, processed fish (mainly canned tuna) and other food products (already
covered under section (2) above).Mauritius WT/TPR/S/90
Page 67
48. Incentives provided under various schemes26, the Export Processing Zone Scheme in
particular, have given impetus to manufacturing in Mauritius.  The schemes, together with preferential
market access provided by certain developed countries, have contributed to the development and
specialization of the sector in the production of labour-intensive goods requiring low skills and low
technology, in particular textiles and clothing.
49. The Export Processing Zones (EPZs, also called export enterprises) account for around 18%
of total employment and around half of the total value-added in manufacturing:  they generated some
Mau Rs 12 billion in 1999 and are growing at broadly the same rate as the manufacturing sector as a
whole.27  EPZ exports increased from Mau Rs 18.3 billion in 1995 to some Mau Rs 29 billion in 1999
(Table IV.9).
Table IV.9
Main economic indicators of the EPZ sector, 1994-99
1994 1995 1996 1997 1998 1999
Number of enterprises as at December 494 481 481 480 495 512
-  N e w 2 72 54 32 64 83 7
- Closures 69 38 43 27 33 20
Employment as at December 82,176 80,466 79,993 83,391 90,116 91,374
- Net change -3,445 -1,710 -673 3,598 6,725 1,258
- Growth rate (%) -4.0 -2.1 -0.8 4.5 8.1 1.4
Exports (f.o.b. Mau Rs million) 16,533 18,267 .. 23,049 26,075 28,952
Imports (c.i.f. Mau Rs million) 10,125 10,856 .. 13,880 16,179 15,725
- Raw materials 9,016 9,869 .. 12,442 14,693 13,880
- Machinery and spare parts 1,109 987 .. 1,438 1,486 1,845
Net exports (Mau Rs million) 6,408 7,411 .. 9,169 9,896 13,227
Net exports to exports (%) 38.8 40.6 .. 39.8 38.0 45.7
Value added at current prices (Mau Rs million) 6,373 7,097 .. 9,138 10,452 11,633
- Share in manufacturing (%) 50.2 49.6 49.6 49.8 49.5 50.7
- Share in GDP (%) 11.7 11.7 12.0 12.1 12.3 12.7
Value added at constant '82 prices (Mau Rs million) 2,173 2,281 .. 2,587 2,766 2,932
Growth rate (%) 4.3 5.0 .. 6.0 6.9 6.0
Investment (Mau Rs million) 900 815 .. 1,245 1,445 1,710
- Machinery 880 805 915 1,200 1,355 1,590
.. Not available.
Source: Information provided by the Mauritian authorities.
50.  Textiles and clothing account for some 85% of EPZ exports in value, 89% of EPZ
employment, and 55% of the total number of EPZ companies.  These companies contribute some 99%to the total value of exports of textiles and clothing from Mauritius.  The four main clothing items
exported by Mauritius are T-shirts, trousers, shirts, and pullover/cardigans (Table IV.10).  Mauritius
has become the world 's second largest exporter of woollen knits.
28  Total earnings from exports of
textile yarns, fabrics and clothing reached Mau Rs 24.7 billion in 1999, up from Mau Rs 14.8 billion
in 1995.  Exports of clothing increased on average by  Mau Rs 2 billion per year over the period, from
Mau Rs 13.8 billion to Mau Rs 22.9 billion.
                                                     
26 There are 22 incentive schemes in Mauritius.
27 There were some 523 EPZ companies employing some 90,000 persons in 2000.
28 Dunn and Bradstreet, Inc. (2000).WT/TPR/S/90 Trade Policy Review
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Table IV.10
Evolution of main EPZa clothing exports, 1995-99
Product 1995 1996 1997 1998 1999
Quantity (million units)
T-shirts 56.3 66.3 69.4 65.3 75.9
Trousers 19.4 23.8 26.4 28.3 31.7
Shirts 15.9 14.6 18.1 20.3 23.1
Pullovers/cardigans 15.2 15.2 16.4 15.2 15.0
Value (Mau Rs million)
T-shirts 3,750 4,936 5,355 5,939 6,809
Trousers 2,364 3,337 4,125 5,232 5,767
Shirts 2,688 2,780 3,031 3,778 4,777
Pullovers/cardigans 2,785 3,181 3,583 3,759 3,272
a Export Processing Zones.
Source: Information provided by the Mauritian authorities.
51. Around two thirds of the production of textiles  and clothing are exported quota- and duty-free
to the EU.  However, the U.S. is the major single destination for Mauritian textile, clothing, andleather products (some 25% of the total), followed by France, the United Kingdom, Germany, and
Italy.  In general, Mauritius has partially filled its export quotas for textiles and clothing to the
United States. (Table IV.11).  Therefore, as far as textiles and clothing products are concerned, the
impact of AGOA on Mauritian exports may be limited.
Table IV.11
Utilization of U.S. quotas on textiles and clothing by Mauritius, 1998-2000
(Per cent)
Description 1998 1999 2000 (Jan.-Oct.)
Playsuits 2.7 0.6 0.3
Jackets 3.7 17.6 3.5
Ladies dresses 4.7 8.9 11.7
T-shirts 92.4 87.4 52.6
Shirts 38.6 42.7 39.6
Blouses 9.3 9.9 10.3
Sweaters 91.9 99.6 81.0
Trousers/shorts 4.3 3.8 1.3
Sleepwear/Pyjamas 2.3 0.1 0.1
Underwear 31.8 52.6 5.1
Skirts 0.0 0.0 0.0
Knitted shirts and blouses 35.8 37.7 25.9
Man-made fibre shorts/trousers 0.7 4.8 8.5
Knit group 62.7 27.3 14.2
Unweighted average of all products 27.2 28.1 18.1
Source: Information provided by the Mauritian authorities.
52. The challenges to Mauritius' textiles and clothing branch include:  rising production costs,
labour costs in particular (Chapter I(1))29;  lack of skilled labour;  limited product base and
insufficient upgrading into higher-value products;  limited research and development, and low
technology;  and low design and marketing capabilities.30  The recent appreciation of the U.S. dollar
                                                     
29 High labour costs are due to labour market rigidities:  there are some 200 labour unions in Mauritius.
30 JEC (2001).Mauritius WT/TPR/S/90
Page 69
and depreciation of the Euro have also affected the competitiveness of Mauritian exports to the EU,
EPZ imports being mostly denominated in U.S dollars and the bulk of their exports being in Euro.
The dismantling of the Multifibre Arrangement (MFA)31, and post Lomé ACP-EU Agreements will
increase competition in traditional markets, mainly the EU where Mauritius is the largest exporter of
textiles and clothing among the ACP countries.
53. In the wake of the changing international environment and with a view to remedying the
problems manufacturing is facing, the Government's policy in the sector has focused on market and
product diversification, as well as on improving competitiveness.  To reduce dependence on
traditional markets, particular attention is being given to regional markets with a view to developing
Mauritius as a manufacturing base for the region. Regional integration of manufacturing is being
promoted through delocalization of low-cost (low -value-added) activities to neighbouring countries,
especially least developed countries (e.g. Madagascar and Mozambique) given their low production
costs and the slower erosion of their preferential margins compared with that of developing
countries.32  To this end, incentives are granted by the Government under the Regional Headquarters
Scheme (Table AIII.4).  As a result of delocalization and vertical integration of certain manufacturing
activities, Mauritius' exports of certain textile and clothing products to Madagascar have increased inrecent years (e.g. by 64% from 1998 to 1999).
54. The 1993 Industrial Expansion Act was enacted to revise and consolidate existing legislation
with a view to modernizing, integrating, and dive rsifying manufacturing industries (Chapters II(4)
and III(4)(i)).  Incentive schemes such as the Technology Diffusion Scheme, the Pioneer Status
Enterprise Scheme, and the Strategic Local Enterprise Scheme are in place to contribute to shifting to
production of higher-value-added and more capital -intensive goods on which competition is on
quality and business excellence (just-in-time deliveries) rather than on prices.  In particular, thePioneer Status Enterprise Scheme is aimed at further fostering diversification, with emphasis on,
inter alia , printing and press activities, light engineering, information technology, pharmaceuticals,
agri-based industries, electronics, and jewellery.
55. Sectoral integration is being promoted through the shift from industries to clusters, strong
linkages between small and medium-sized enterprise s and large companies, as well as within and
across sectors (e.g. export and non-export sectors, and agriculture, manufacturing, and services) and
across the region (especially with delocalized companies).  New clusters are to be introduced.
Trade marks and copyrights will be more protected in order to promote local research and
development, and to attract investments.  ISO st andards are being promoted for quality improvement
purposes (Chapter III(4)(ii)(a)).
56. The Mauritius Export Development and Investment Authority (MEDIA), the Export
Processing Zone Development Authority (E PZDA) and the Small and Medium Industries
Development Organization (SMIDO) provide suppo rt to manufacturing companies.  Since 1996,
MEDIA has been organizing (on a regular basis) Mauritius International Apparel and Textile
Exhibitions (MIATEX) in Europe.  The Clothing Technology Centre (a technical arm of the EPZDA)
was established in 1998 to help to address the needs of small and medium-sized enterprises through
assistance in material sourcing, technical specification, pattern creation, manufacturing techniques,
and training courses.  The Industrial and Vocational Training Board (IVTB), in collaboration with
international institutes, supplies skilled labour to, inter alia , textile and clothing, printing, electronic,
engineering, and jewellery industries.
                                                     
31 Mauritius was not a member of the MFA.
32 In Mauritius, the unit labour cost is on average five times higher than in Madagascar, "Globalview
Africa" Fashionbusiness international , Spring 2001.WT/TPR/S/90 Trade Policy Review
Page 70
57. Since the 2000/01 Budget, the Government has been rationalizing import duties through the
elimination or reduction of customs tariffs on inputs, machinery, and equipment.  Mauritius'
participation in the Ministerial Declaration on Trade in Information Technology Products and the
related dismantling of tariffs have promoted domestic use of information technology products.  These
tariff reductions, together with various incentive schemes available to manufacturers, might have
increased the effective protection of the manufacturing sector.
58. Nominal tariff protection for manufacturing averages 20.6% (above the overall simple tariff
average), with rates ranging up to 80%;  the ad valorem  equivalent of the specific tariff on straps of
thong-type sandals is around 360%.  The highest tariffs in the sector apply to imports of textile and
clothing products:  customs tariffs average some 59% on made-up textile goods (except wearing
apparel), 67% on knitted and crocheted fabrics, 71% on clothing (except footwear), 73% on specifiedfootwear, 79% on leather products (except footw ear), and 80% on carpets and rugs.  Other simple
average tariffs in the sector are 75% on non-metallic furniture and fixtures, 56% on soaps, and 54%
on metallic furniture and fixtures (Table AIV.1).  A customs tariff of 80% applies to imports of fully
processed basic metal products.
59. Import and export controls apply to certain manufactured products (Chapter III(2)(v)
and III(3)(iii)).  Some manufactured goods are subject to compulsory standards and price controls, the
maximum mark-up system in particular (Chapter III(4)(ii) and III(4)(iii)).
60. Mauritius has not resorted to quantitative restrictions on imports of textiles, clothing and
footwear.  However, it retains the right to use the transitional safeguard mechanism of Article 6 of the
WTO Agreement on Textiles and Clothing (Chapter III(2)(vi)).
(4) S
ERVICES
(i) Overview
61. The services sector, including electricity, gas, construction and water, contributes around 74%
to Mauritius' real GDP (up from two thirds in th e early 1990s).  The sector includes two of the four
pillars of the economy:  financial services and tourism.  Mauritius is a net exporter of services
(Chapter I).
62. Commitments made by Mauritius under the GATS largely reflect the current state of
competition in its services branches.  Limitations on market access and on national treatment are
governed by the provisions of the 1984 Companies Act, the 1975 Non-Citizens Property Restrictions
Act, the 1970 Non-Citizens Employment Restrictions Act;  the 1974 Income Tax Act, and the
1988 Banking Act.  Measures affecting presence of natural persons, and the supply of transportation
services are unbound.33
63. Mauritius has maintained MFN exemptions under Article II of the GATS on the grounds of
reciprocity measures, designed to enhance access to foreign financial markets for Mauritian financial
service suppliers.34
                                                     
33 WTO document GATS/SC/55, Mauritius:  Schedule of Specific Commitments, 15 April 1994.
34 WTO document GATS/EL/55/Suppl.1, Mauritius:  List of Article II (MFN) Exemptions,
Supplement 1, 26 February 1998.Mauritius WT/TPR/S/90
Page 71
(ii) Tourism
64. The tourism branch, including restaurants and hotels, is the third largest source of Mauritius'
foreign-exchange earnings (20% of the total), after te xtiles and clothing, and sugar.  Its share in real
GDP increased from 4.1% in 1995 to 5.5% in 1999 and 2000 (Table IV.12).  This performance is
partly attributable to restaurants and hotels, which grew by 10% per year (on average) over the period.
As at end-March 2000, the branch provided direct employment to 18,571 persons;  total (direct andindirect) employment in the branch was 35,000, i.e. almost 8% of total employment in Mauritius.  The
room to employee ratio was 1:1.8 (i.e. one room created employment for 1.8 persons) on average
in 1999.
Table IV.12
Main indicators in the tourism branch, 1995-2000
1995 1996 1997 1998 1999 2000
Hotels 95 90 87 90 92 95
Rooms 5,977 6,668 6,809 7,267 8,255 8,657
Bed places 12,359 13,833 14,126 14,995 16,947 17,776
Occupancy rates (per cent)
Room 73 74 78 72 71 70
B e d 6 76 57 06 36 26 2
Value added, restaurants and hotels
(Mau Rs million) 2,485 3,054 3,423 4,142 5,060 5,620
Value added, growth rate (per cent) 9.0 16.0 10.2 6.0 6.0 6.0
Share of tourism in GDP (per cent) 4.1 4.5 4.5 4.9 5.5 5.5
Tourist arrivals 422,463 486,867 536,125 558,195 578,085 656,453
Employmenta13,855 14,416 15,425 16,490 17,111 18,571
Gross earnings (Mau Rs million) 7,472 9,048 10,068 11,890 13,668 14,234
Change in expenditure per tourist (per cent) 10.4 5.1 1.0 13.4 11.0 2.4
a Large establishments.
Source: Information provided by the Mauritian authorities.
65. Mauritius' attractions include cultural diversity, scenic beauty, climate, sea, beaches,
and gambling.  At the end of 2000, its reception capacity was 8,657 rooms with 17,776 beds in
95 registered hotels (including international ho tel groups);  informal accommodation, mainly in
unregistered private bungalows, provided between 2,000 and 2,500 rooms.  Three hotels under
construction (expected to be completed by 2002) would provide some 500 additional rooms, and other
hotel projects at various stages of development would increase the total reception capacity by
4,500 rooms by 2010.
66. In 2000, some 656,450 tourists visited Mauritius, up from 578,090 in 1999.  Arrivals are
expected to grow at an annual average rate of 8% over the coming five years.  Tourist arrivals from
Europe account for around two thirds of the total, with France, as the leading source market,contributing 30% to the total (Chart IV.3).
67. The rapid expansion of tourism has placed much strain on Mauritius' airport infrastructure.
This situation will likely ease with the completion of the works under way to expand and modernize
existing facilities.  The road network is stretched to  capacity in major towns and tourist centres.  The
mushrooming of hotels and private bungalows has increased the pressure on the land and beach areas.Deficiencies in waste treatment in heavily developed tourism areas are having a negative impact on
the marine eco-system.  There is also growing co ncern about the social impact on the local population
of the large number of tourists, mainly on those who are not integrated in the development process
(low-income people).WT/TPR/S/90 Trade Policy Review
Page 72
68. The Government policy has emphasized the pr omotion of low-impact and high-spending
tourism.  To this end, hotels with over 80 rooms are required to install their own waste treatment
plant.  Hotels have invested in renovation to ta ke into consideration ecological concerns.  A few
hotels (e.g. Coco Beach) have acquired the Green Globe Certification, an indicator of their
commitment to operate in an efficient and sustai nable environment.  Two hotels (Labourdonnais
Waterfront and Touessrock) have obtained ISO 9002 certification.  In addition, the Government hasbanned direct charter flights to Mauritius.  It is monitoring construction of new hotels and has limited
the maximum number of rooms per hotel to 200 since 1989.  Business strategies are developed by
individual promoters, but must be in line with Government policy of promoting the high-profile,
high-spending and up-market tourism segment.  Pric es are market-determined in the tourism branch.
0%10%20%30%40%50%60%70%80%90%100%
1994 1995 1996 1997 1998 1999Chart IV.3
Distribution of tourist arrivals by country of residence, 1994-99
Per cent
Source: Data provided b y the Mauritian authorities.ReunionFrance Germany Italy United Kingdom Other Europe
Other South Africa Other Africa Asia
69. Fiscal incentives (duty and tax concessions and rebates) are granted to hotel promoters under
the Hotel Management Scheme and the Hotel Development Scheme (Table AIII.4).  In addition, theDevelopment Bank of Mauritius offers concessionary interest rates on loans for the construction or
upgrading of hotel facilities.  The Government, through the Mauritius Tourism Promotion Authority
(MTPA)
35, also promotes tourism in the major overseas markets:  some Mau Rs 100 million were
earmarked for tourism in the 1999/2000 national budget.  In recent years, the Government has taken
steps to encourage joint-promotion efforts from the public and private sectors.  Other areas of public–private cooperation include trade fairs and internat ional tourism exhibitions.  Stakeholders are also
involved in regional tourism activities through, inter alia , membership of the Indian Ocean Tourism
Organization (IOTO) and the Southern African Development Community (SADC) tourism
                                                     
35 The MTPA is a parastatal.  Its main object is to  promote Mauritius abroad as a tourist destination
(Section 4 of the 1996 Mauritius Tourism Promotion Authority Act).Mauritius WT/TPR/S/90
Page 73
programme.  The Indian Ocean Commission has urged its members to promote regional trade under
the Regional Tourism Programme funded by the EU.
70. Applications for investment in hotel projects are processed by the Ministry responsible for
Tourism, subject to approval by the Ministries responsible for Housing and Lands, Environment,
Health, Public Utilities, Infrastructure, and by the Central Water Authority, Central Electricity Board
and local authorities.  The minimum number of rooms is 60 if the project is Mauritian-controlled and100 if it is owned by foreigners;  foreign participation in hotels with less than 100 rooms is limited
to 49%.
71. Hotel projects must be financed by at least 40% of equity;  the hotel companies must be
incorporated in Mauritius.  The investment per room should be at least Mau Rs 2 million.  In the case
of coastal resort hotels, the promoter must have at least 2.5 acres of land.  Foreign-owned coastalhotels must lease land from the Government:  the land area must be at least 10 acres per project.
72. In the Uruguay Round, Mauritius bound (without limitations on market access and national
treatment) measures affecting consumption abroad of all types of tourism services, as well as
measures affecting cross-border supply, and commercial presence for the supply of services by travel
agencies.  In addition to the investment restrictions mentioned above, certain limitations aremaintained on market access and/or national treatm ent.  Foreign travel agencies, arranging for
services in Mauritius, must work through an agent established in Mauritius.  Foreign participation is
allowed only in restaurant projects of more than Mau Rs 10 million.  Provision of tour-operating
services is restricted to Mauritian nationals, although foreign participation is possible with a permit
from the Ministries responsible for Tourism and Finance, and the Prime Minister.  Ownership of car
rental agencies and yacht and cruise services is reserved to Mauritian nationals.  Foreign participation
in the capital of duty-free shops is limited to 30%.
36
(iii) Financial services
73. Financial services comprise banking and non-banking financial activities;  each has its own
regulatory authority.  The financial services branch currently contributes some 14% to real GDP;  it
has grown by some 7% on average in recent years.  Financial services employ around 6,700 persons.
A dozen of Mauritius' banks and financial institutions are public enterprises, operating on commercialprinciples.
74. The financial services branch is being restructured;  a Financial Services Development Bill
had been introduced into Parliament.  Once adopted, the Act will provide for a single regulatory
authority for both banking and non-banking financial activities;  the authority will be established after
the first phase of the restructuring of the branch.
75. Mauritius participated in the extended WTO negotiations on financial services and further
improved its commitments.  Mauritius bound (without limitations) measures affecting cross-border
supply, consumption abroad and commercial presence for the supply of:  services auxiliary to
insurance (e.g. consultancy, actuarial, risk assessment and claim settlement services);  all payment and
money transmission services, including credit, charge, and debit cards, travellers cheques, and bankersdrafts;  and guarantees and commitments.
76. Mauritius bound (without limitations) measures affecting cross-border supply and
consumption abroad of lending of all types (excluding factoring, and specialized and structured
products);  trading for own account or for account of customers in money market instruments,
                                                     
36 WTO document GATS/SC/55, Mauritius:  Schedule of Specific Commitments, 15 April 1994.WT/TPR/S/90 Trade Policy Review
Page 74
transferable securities and foreign exchange;  and participation in issues of all kinds of securities and
provision of services related to such issues.  It also bound measures affecting consumption abroad of
acceptance of deposits, settlement and clearing services for inter-bank transactions and securities,  and
provision and transfer of financial information and financial data processing and related software by
suppliers of certain financial services;  and measures affecting commercial presence for the supply of
direct life and non-life insurance services.  Other commitments made by Mauritius on financialservices are subject to various limitations.
37
(a) Banking services
77. Mauritius has 21 banks, of which ten are domestic banks and eleven are offshore banks.38
Five of the domestic banks are locally incorporated and the other five are branches of foreign banks.
The domestic banking system is highly concentrated, with two banks (the Mauritius CommercialBank Ltd., and the State Bank of Mauritius Ltd.) holding about 70% of the total assets of domestic
banks, which amount to some Mau Rs 110 billion;  assets of offshore banks totalled US$3,534 million
on 30 June 2000.
39  Nearly 10% of the total deposits of Mau Rs 84.4 billion held with domestic banks
were in foreign currencies.40
78. Under the 1988 Banking Act and the Bank of Mauritius Act, the Bank of Mauritius (BOM)
licenses, supervises and regulates all the banks based in Mauritius, including offshore banks.  The
BOM also regulates foreign exchange dealers, money changers and non-bank financial institutions
authorized to take deposits.41  A licence (a domestic banking licence or an offshore banking licence as
the case may be) from the BOM is required to open a bank.42  Information on the cost of the licence
fee for domestic banks and the processing fee and annual licence fee for offshore banks was not
available.  BOM approval is required to open a new branch or change location, and for a Mauritian
bank to open a branch abroad.  The Acts and the related regulations provide for essential principles ofprudential regulations, adequate capitalization of financial institutions, safeguard of depositors' funds,
and diversification of loan portfolios.  All banks are requested to submit monthly statements to the
BOM (Section 24 of the Banking Act) and are subject to annual external audit (Section 25 of the Act).
79. As of 1 January 1999, the minimum paid-up capital was increased from Mau Rs 75 million to
Mau Rs 100 million for domestic banks
43, and to US$4.5 million (or equivalent thereof in any freely
convertible currency) for offshore banks.  Consequently, the minimum capital adequacy ratio has been
increased from 8% to 10%.  Offshore banks are required to be a branch or a related corporation of a
foreign bank of established reputation, or a bank incorporated in Mauritius.  There are no limits on
foreign equity participation.  Foreign banks are subject to the same regulations as domestic banks.
                                                     
37 WTO document GATS/SC/55/Suppl. 2, 26 February 1998.
38 Under Section 2 of the Banking Act (as amended), offshore banking is defined as "banking business
or investment business conducted in currencies other than the Mauritian rupee except to the extent permitted by
the central bank for trading on the foreign exchange market of Mauritius and investment in money market
instruments."
39 Bank of Mauritius (2001).
40 Ministry of Economic Development, Financial Services and Corporate Affairs (2001).  The share of
Mauritius Commercial Bank Ltd. in total deposits held with domestic banks was 45.6%, and of the State Bankof Mauritius Ltd. about 22.1%, in February 2001.
41 Section 13A of the 1988 Banking Act, as amended in 1994.  The BOM is a member of the Offshore
Group of Banking Supervisors (OGBS) and of the Eastern and Southern Africa Banking Supervisors Group.
42 An applicant may be granted both a domestic banking licence and an offshore banking licence for
separate and distinct business (Section 3(3) of the 1988 Banking Act, as amended).
43 Section 14(1) of the 1988 Banking Act (as amended).Mauritius WT/TPR/S/90
Page 75
80. Offshore banks are not subject to Mauritian taxes or domestic monetary policy measures.
Offshore banks may deal with re sidents in foreign currencies.
81. An Economic Crime and Anti-Money-Laundering Act was adopted in June 2000;  an
Economic Crime Office was established to administer the Act, and to investigate suspicious
transactions and economic offences.  The Act provides for measures to control "large" cash
transactions.  Under the Act, banks must verify the identity and address of their customers.44  Banks
that contravene this provision are liable to a fine ranging from Mau Rs 10,000 to Mau Rs 5 million.
(b) Non-banking financial services
82. As at end-1999, Mauritius had 24 insurance companies and pension funds (registered under
the 1987 Insurance Act), of which four were foreign companies.45  Between 1994 and 1998, total
assets of the companies grew by 102% to Mau Rs 16.7 billion (Table IV.13), and per capita insurancepremium expenditure by 47% to Mau Rs 3,396.
Table IV.13
Main indicators of insurance services, 1994-99
1994 1995 1996 1997 1998 1999
Assets of insurance companies
Total assets (Mau Rs million) 8,253 9,966 11,949 14,130 16,672 19,200
Per cent of GDP 13.1 14.4 15.5 16.3 17 18
Gross premium income
Long-term and general insurance (Mau Rs million) 2,566 3,007 3,340 3,723 3,964 4,250
Per cent of GDP 4.1 4.4 4.3 4.3 4.1 4
Long-term insurance (per cent of GDP) 1.8 2 2.1 2.2 2.2 2.3
General insurance (per cent of GDP) 2.3 2.4 2.2 2.1 1.9 1.7
Per capita insurance premium expenditure on (Mau Rs):
Long-term and general insurance 2,306 2,679 2,923 3,221 3,396 3,598
General insurance 1,270 1,464 1,530 1,580 1,548 1,528
Long-term insurance 1,036 1,215 1,393 1,641 1,848 2,070
Value added at factor cost (Mau Rs million) 888 1,286 1,460 1,751 2,069 2,425
Growth rate over previous year (per cent) .. 44.8 13.5 19.9 18.1 17.2
Contribution to GDP (per cent) 1.6 1.96 1.99 2 2.1 2.26
Employment (large establishments) 1,759 1,836 1,875 1,851 1,932 1,979
.. Not available.
Source: Information provided by the Mauritian authorities.
83. With the exception of the Sugar Insurance Fund Board and the African Reinsurance
Corporation46, insurance companies operating in Mauritius are governed by the 1987 Insurance Act
administered by the Controller of Insurance.  The Act requires that insurance business be carried out
by companies registered in respect of classes of insurance business.  The Controller of Insurance
licenses insurance companies.  The licensing requirements include a minimum paid-up capital of
Mau Rs 25 million (up from Mau Rs 20 million until end-June 2000), a statutory deposit of at leastMau Rs 8 million in respect of each of long-term insurance business and general insurance business, a
                                                     
44 See also Section 40 of the 1988 Banking Act, as amended.
45 Three of the foreign companies are operating general insurance business only and the other
long-term insurance business only;  two of the local companies are operating long-term insurance business only,
five general insurance business only, and the other 13 are operating both long-term and general insurancebusiness.
46 The African Reinsurance Corporation is an association of underwriters and organizations that
provide insurance services incidentally to their main activities (Republic of Mauritius, 2000).WT/TPR/S/90 Trade Policy Review
Page 76
sound business plan, and an actuarial report.  The app licant must show that it would be able to make
adequate treaty arrangements for reinsurance.  If the applicant is a foreign company, it must show a
satisfactory record for at least three-years in handling the class of insurance business (in respect of
which the application is made) in the country where it has its head office.
84. In the case of long-term insurance business (e.g. life insurance, pension business, and
permanent health insurance business), the Act requi res that the actuary appointed by the insurance
company certify the solvency of the insurer.  Where general insurance business (i.e. any class other
than long-term insurance business) is transacted, the auditor, directors, and the authorized agent of an
insurance company are required to certify the solvency position of the insurer.
85. The Stock Exchange Commission, established under the 1988 Stock Exchange Act, regulates
and supervises the operations of the Stock Exchange of Mauritius Ltd.47, the Central Depository and
Settlement Company Ltd., capital market intermediaries, and of "approved investment status"
institutions (e.g. unit trusts, investment trust and investment companies).
86. The Mauritius Offshore Business Activities Authority (MOBAA), established under the 1992
Mauritius Offshore Business Activities Act, regulates and supervises non-bank offshore activities.
MOBAA is managed by a board of governors appointed by the Minister responsible for financialservices, and funded by licensing fees paid by registered companies.  Mauritius has over
14,000 registered offshore companies serviced by some 60 offshore management companies.
48
87. There is no specific supervisory or regulatory authority for the activities of leasing companies
and venture capital funds;  the Post Office Savings Bank;  the Sugar Insurance Fund Board;  asset
management companies and companies providing investment advisory and other services in the
financial services subsector;  pension funds;  and commercial credit institutions.49
(iv) Telecommunications and postal services
88. In 2000, Mauritius had 280,885 main telephone lines (up from 148,185 in 1995)
corresponding to a teledensity of nearly 24 (up from around 13 in 1995).  There are some
25,000 applications per year for fixed telephone lines.  Depending on the locality, the waiting period
for a telephone line may be up to one year.  Revenue from telecommunications services increased
from some Mau Rs 1.8 billion in 1995 to Mau Rs 3.7 billion in 1999.  Telecommunications servicescontribute some 2% to GDP.  The number of cellular users is around 200,000;  and some
90,000 persons have an internet connection.
89. The provision of telecommunications services in Mauritius is governed by the 1998
Telecommunications Act, which replaced the 1988 Act.  Under the 1998 Act, all telecommunications
operators, and suppliers of public telecommunications networks (including dealers oftelecommunications apparatus), and services have to be licensed by the regulator, the Mauritius
Telecommunications Authority (MTA), established under the Act.  The MTA sets the licensing
criteria, and type-approval procedures for equipment connected to network and radio equipment.  It
also manages the Universal Service Fund, which supports the provision of universal services.  Prices
of telecommunications services are set by the operators but must be approved by the MTA seven days
                                                     
47 The Stock Exchange of Mauritius was established in 1989.
48 Ministry of Economic Development, Financial Services and Corporate Affairs (2001).
49 Ministry of Economic Development, Financial Services and Corporate Affairs (2001).Mauritius WT/TPR/S/90
Page 77
before they are applied.50  International calls are relatively expensive:  a three-minute telephone call to
the United States in peak hours costs US$3.95.51
90. The Act prohibits abuses of dominant positions in the branch.  Every licensee is required to
grant access to its network. The terms of inte rconnection agreements are negotiated between the
parties on a case-by-case basis.
91. With the exception of mobile telephone services, most telecommunications services are
under the monopoly of Mauritius Telecom Ltd. (MT), a public enterprise and the dominant
telecommunications operator.  The MT holds an exclusive right to provide all fixed
telecommunications services between places within and outside Mauritius until end-December 2003
(one year ahead of the schedule contained in Mauritius' GATS commitments).  It supplies telephone,
telex, telegram, paging, data, and internet services.  In November 2000, 40% of its capital was sold toFrance Telecom.  The State still holds 41% of the capital directly and 19% through the State Bank of
Mauritius.  Other major telecommunications operators in Mauritius include Cellplus Mobile
Communications (wholly owned by the MT) for GSM mobile cellular telephone services;  Emtel Ltd.
for GSM mobile cellular telephone services and analogue;  Paging Services Ltd. for mobile paging
services;  Teleservices (Mauritius) Ltd. for mobile paging services (wholly owned by the MT);  and
Telecom Plus Ltd. for internet and value-added services (owned 70% by the MT and 30% by France
Telecom).
92. Mauritius is a member of the International Telecommunications Union (ITU), the
International Telecommunications Satellite Organization (INTELSAT) and the International Maritime
Satellite Organization (INMARSAT).  Mauritius took the opportunity offered by the latest
negotiations on telecommunications services, in which it participated, to further improve its
commitments.  Mauritius bound (without limitations) measures affecting cross-border supply and
consumption abroad of facsimile, paging, private mobile radio, equipment rental, sales and
maintenance, and mobile services
52;  and measures affecting consumption abroad of voice telephone,
packet switched data transmission, telex, telegraph, and private leased circuit services.53
93. In Mauritius, telecommunications and postal services have always been provided by separate
bodies.  In accordance with the 1933 Post Office Act (as amended), the Mauritius Post Office (MPO)operates as a Government Department under the por tfolio of the Ministry responsible for Public
Utilities.  The MPO employs some 1,100 persons;  its turnover amounted to around
Mau Rs 153 million in 1998/99.
54  The MPO holds a monopoly over domestic courier services
(i.e. courier services within Mauritius) and letter mail.  It operates the Post Office Savings Bank.
Private courier companies (there are currently eigh t) are licensed by the MPO to provide the other
forms of postal services.  The MPO sets prices for postal services subject to approval by the Minister
responsible for Public Utilities.  The MPO receives subsidies from the Government.  The MPO is a
member of the Universal Postal Union (UPU) and participates in the activities of the Southern African
Transport and Communications Commission of the SADC.
                                                     
50 A Telecommunication Advisory Council advises the Minister responsible for telecommunications on
any matter relating to telecommunications.
51 JEC (2001).
52 Measures affecting commercial presence for the supply of these services have also been bound
without limitations on market access.
53 Measures affecting cross-border supply of these services have been bound without limitations on
national treatment.  Alternative calling practices such as call-back and refile are not permitted.  "Country Direct"calling card service is possible under the auspices of agreements concluded between operators (WTO document
GATS/SC/55/Suppl.1, 11 April 1997).
54 Ministry of Public Utilities (2001).WT/TPR/S/90 Trade Policy Review
Page 78
94. A study on the modernization of postal services in Mauritius recommended conversion of the
MPO into a company;  gradual liberalization of postal services;  establishment of a regulatory body to
regulate prices, quality standards, competition and licensing;  and introduction of a post coding
system.
(v) Transport
95. The transport network of Mauritius consists of roads, airlines and shipping lines.  There are
some 1,900 km. of roads, of which around 90% is paved.  Mauritius has one international airport at
Plaisance and a commercial port at Port Louis;  it has no railways.  The bulk of Mauritius' trade (more
than 95% of the total volume of trade) is handled by sea transport.  The launching of freeport
activities in 1993 has given an impetus to maritime transportation services (mainly transshipment) in
Mauritius;  freeport trade amounted to some Mau Rs 7.2 billion in 1999/2000.
(b) Maritime
96. The Mauritius Marine Authority (MMA), a parastatal body, is responsible for the
administration, planning, development, and operation of  all port facilities (including infrastructure and
equipment) and services.  The Cargo Handling Corporation, jointly owned by the MMA and the State,
is the sole provider of container and general cargo handling services;  it operates under a contractgranted by the MMA.  Nevertheless, certain commodities such as cement, wheat, and petroleum are
unloaded by private enterprises, and the Mauritius Sugar Technical Corporation loads sugar for
export.
97. Mauritius has three shipping companies, of which one is owned by the State.  The State-
owned company exercises exclusive rights over freight and passenger shipping between Mauritius and
Rodrigues;  the prices of its services are subsidiz ed by the Government.  The two other companies are
jointly owned (joint-ventures) by Mauritians and foreigners, and their vessels mostly carry outregional trade.  National vessels are entitled to a 50% discount from berthing fees.  Shipping to
Europe, the United States and the Asia-Pacific region is handled by foreign vessels.  Mauritius does
not participate in any cargo-sharing agreements.
98. The Government, through the MMA, has modernized and expanded Port Louis harbour in
recent years.  The Government intends to reduce prices, costs of ship's time at port, and cargohandling charges with a view to competing favourab ly with foreign ports, reducing costs of imported
inputs, and improving the competitiveness of Mauritian exports.  Port tariffs are to be revised
periodically to reflect market conditions, and labour productivity is to be improved through an
increase in the handling level from 16.8 twenty f oot equivalent units (TEUs) to 25 TEUs per hour in
2005.
55
(c) Air
99. Passenger traffic at the international airport of Mauritius has grown at around 8% a year in
recent years.56  This performance is partly attributable to the development of tourism.  In
consequence, passenger terminal facilities are being expanded.  The national carrier, Air Mauritius,
remains the largest carrier for passengers and airfreight into and out of Mauritius.  The State is themajor stakeholder:  it holds 36.2% of the capital of Air Mauritius directly, and 38.5% through a public
                                                     
55 Ministry of Economic Development, Productivity and Regional Development (2000), Technical
Supplement.
56 Ministry of Economic Development, Productivity and Regional Development (2000), Technical
Supplement.Mauritius WT/TPR/S/90
Page 79
enterprise;  foreign ownership makes up the balance.  Air Mauritius is the only provider of ground
handling services, and holds monopoly traffic rights on the Port-Louis-Rodrigues route.  Twelve
foreign carriers serve Mauritius.  A state-owned company, Airports of Mauritius Corporation Ltd. is
responsible for airport management and infrastructural development;  it has taken over the
responsibilities of the Airport Development Corporation Ltd. and the Airport Management Services
Ltd.
100. The Department of Civil Aviation is the regulatory body;  it administers the Civil Aviation
Act, which is currently under review.  International traffic rights for passengers are governed by
bilateral agreements (i.e. contingent upon reciprocity);  Mauritius has concluded 28 bilateral air
transport services agreements with foreign countries.  Only scheduled passenger carriers are allowed
to operate into and out of Mauritius.  Charter airlines are denied access in line with the policy aimedat "low-impact, high-spending" tourism (section (4)(ii) above).  The code-sharing arrangement
between Air Mauritius and Air France is for strategic reasons.  The Government's policy is to have
one airline per route to Mauritius (single-designation pattern).  Tariffs for air transport are set by air
companies on the basis of the provisions of IATA;  the tariffs are subject to approval by the Minister
of External Communications responsible for air transport.Mauritius WT/TPR/S/90
Page 81
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Bank of Mauritius (2001), Annual Report on Banking Supervision 2000 , Port Louis.
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Central Statistical Office (2000), Digest of Agricultural Statistics 1999 , Port Louis.
Dun and Bradstreet Inc. (2000), Exporters' Encyclopaedia 1999/00 , Baltimore, M.D.
Government of Mauritius (2000), Budget Speech 2000-2001, Port Louis.IMF (2000), Exchange Arrangements and Exchange Restrictions 2000 –Annual Report , International
Monetary Fund, Washington, D.C.
JEC (2001), "The Economic Transition of Mauritius", Report of the JEC Task Force, Joint Economic
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Mauritius Chamber of Agriculture (2000), Annual Report 1998/1999 , Port Louis.
Mauritius Customs (1999), Computerization in the Customs and Excise Department , Port Louis.
Mauritius Sugar Syndicate (2000), Report and Statement of Account 1999/2000 , Port Louis.
Ministry of Economic Development, Financial Services and Corporate Affairs (2001), A New
Regulatory Framework for the Financial Services Sector in Mauritius , Port Louis.
Ministry of Economic Development, Productivity and Regional Development (2000 ), Into the
3rd Millennium:  National Strategy for Sustainable Development 1999-2005 , Port Louis.
Ministry of Public Utilities (2001), Annual Report of the Postal Services for the Financial Year 1998-
1999, Port Louis.
Republic of Mauritius (1997), White Paper on Privatisation and Workers' Participation:  A New
Synergy for the Millennium, Port Louis.
Republic of Mauritius (2000), Report of the Controller of Insurance 1999, No. 15 of 2000, Port Louis.
UNCTAD (1999), Foreign Direct Investment in Africa:  Performance and Potential, United Nations,
New York and Geneva.
UNCTAD (2001), Investment Policy Review – Maur itius, United Nations, New York and Geneva.
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WTO (2001), Trade Policy Review – Switzerland and Liechtenstein, Geneva.