PRESS/TPRB/14
3August 1995
TRADE POLICY REVIEW BODY
Review ofUganda
TPRB 'SEvaluation
TheTrade Policy Review Body oftheWorld Trade Organization (WTO) conducted itsreview
ofUganda 'strade policies on27and28July1995. ThetextoftheChairman 'sconcluding remarks
isattached asasummary ofthesalient points which emerged during thetwo-day discussion.
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 andtheChairman 'ssumming-up, together withthese tworeports,
willbepublished induecourse asthecomplete trade policy review ofUganda 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), Bolivia (1993), Brazil (1992), Cameroon (1995),
Canada (1990, 1992&1994), Chile (1991), Colombia (1990), Costa Rica(1995), Côted'Ivoire (1995),
Egypt (1992), theEuropean Communities (1991, 1993&1995), Finland (1992), Ghana (1992), Hong
Kong (1990 &1994), Hungary (1991), Iceland (1994), India(1993), Indonesia (1991 and1994), Israel
(1994), Japan (1990, 1992and1995), Kenya (1993), Korea, Rep.of(1992), Macau (1994), Malaysia
(1993),Mexico(1993),Morocco(1989),NewZealand(1990),Nigeria(1991),Norway(1991),Pakistan
(1995), Peru(1994), thePhilippines (1993), Poland (1993), Romania (1992), Senegal (1994), Singapore
(1992), South Africa (1993), Sweden (1990 &1994), Switzerland (1991), Thailand (1991), Tunisia
(1994), Turkey (1994), theUnited States (1989, 1992 &1994), Uganda (1995), Uruguay (1992) and
Zimbabwe (1994).
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CONCLUDING REMARKS BYTHE CHAIRMAN
Over thepasttwodays, theTrade Policy Review Body hasconducted thefirstreview ofthe
Uganda 'strade policies andpractices. These remarks areintended tosummarize thesalient points.
Asusual, theyaremade onmyownresponsibility anddonotsubstitute fortheBody'scollective
evaluation andappreciation. Thefulldiscussion willbereflected intheminutes ofthemeeting.
Thediscussion developed under fourmain themes: general policy orientation; institutional
reforms; trade policy instruments andregional policy developments andconstraints.
General policy orientation
Members complimented theUgandan Government foritsboldeconomic reforms sincethelate
1980s, inverydifficult economic andsocial circumstances. Particular reference wasmade tothe
abolition ofquantitative restrictions, tariffreform, infrastructure rehabilitation, restoration ofmonetary
discipline, andtheliberalization offoreign exchange markets. These efforts hadbeenvindicated by
strong economic growth inrecent years, defying asevere slump inworld coffee markets. Participants
alsonoted remaining macro-economic challenges suchastheneedtobroaden thetaxbase, integrate
theinformal sector andmobilize private savings. Onequestion wasraised onUganda 'spastexperience
withstrong exchange ratefluctuations andanylessons forcountries facing similar situations.
TherepresentativeofUgandaunderlinedhisGovernment'scommitmenttomarket-drivenreform
within anopen, rule-based trading system. Uganda 'sstrong interest intheWTO system wasevidenced
byearlyratification oftheUruguay Round results anditsrecent decision toopenamission inGeneva.
Heexpressed concern, however, atcontinued bilateral disputes, insufficient institutional representation
ofAfrican countries intheWTO, andthepresent lackofprotection forindigenous biological systems
under theAgreement onTrade-Related Intellectual Property Rights.
Commenting onmacro-economic issues, theUgandan representative noted various initiatives
toimprove taxandtariffcollection andmodernize thetaxsystem. Efforts wereunderway toaccelerate
reforms inthefinancial andbanking sector. Toassist intheintegration oftheinformal sector into
thecasheconomy, theGovernment sought interaliatoimprove thesystem offinancial intermediation
inrural areas.
Some members noted thatefficiency problems intheelectricity sector seemed toaffect economic
development.TheUgandanrepresentativerepliedthatalthoughinfrastructurerehabilitationhadadvanced
well, alotremained tobedone. Intheelectricity sector, Uganda hadinherited from colonial times
anagreement forcross-border supply; ithadlaidthefoundation forincreasing regional integration
inthesector. Thepower cutsreferred tointheSecretariat report were theresult ofdomestic
maintenance work. Inthetransport sector, Uganda hadrecently made regulatory changes inthe
COMESA framework; theyincluded theharmonization ofroadusercharges.
Institutional reforms
Members appreciated thattrade liberalization wasaccompanied andsupported byinternal
deregulation andprivatization, including therestoration ofexpropriated assets. Further details were
sought onreforms inthefinancial sector andprivatization ofparastatals. Questions were raised on
Uganda 'sinvestment régime; concern wasexpressed interaliaatanapparent policy focus onexport-
related andimport-substituting activities.
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Acknowledging thebreadth anddepth oftheadjustments made, members alsoenquired about
measures toalleviate thesocial consequences onaffected groups.
Therepresentative ofUganda stressed thatvirtually allstate-owned enterprises werescheduled
foreither fullprivatization orliquidation. Recent privatizations hadinvolved foreign aswellaslocal
investors, inparticular inthehotel sector. Theprivatization ofUganda Telecommunications would
startinSeptember 1995, onanational treatment basis. Thebanking sector wasscheduled for
liberalization inthenearfuture.
Theinvestment régime wasgeared toensure asolidprivate capital baseforUganda 'sgrowing
economy. Thesystem wasmoststringently applied andallowed onlyforverylimited administrative
discretion. Provisions intheInvestment Code encouraging import substituting activities were tobe
dropped inthecontext ofanimpending review. Uganda accepted binding international arbitration
ofinvestment disputes.
Uganda operated, withdonor assistance, aprogramme tore-integrate soldiers intocivilian life;
retrenched civilservants received reasonable assistance. Re-training initiatives were alsoinplace.
Trade policy instruments
Participants praised Uganda 'sefforts topromote outward-oriented economic adjustment on
anautonomous basis. Clarification wassought onfurther tariff reductions, changes incustoms
proceduresandvaluationmethods,pre-shipmentinspection,theexporttaxoncoffee,andtheintroduction
ofvalue added tax. Questions were alsoraised onsome non-tariff measures forinfant-industry
protection, particularly fortobacco. Oneparticipant enquired about standardization procedures and
therelationship between international anddomestic standards.
Itwasfeltthatawider range ofpolicy bindings under WTO provisions would further promote
confidence inthereform agenda. Several participants alsoenquired about theGovernment 'stimetable
forimplementing newWTO commitments intodomestic legislation; onemember referred inparticular
totheareas ofintellectual property protection andtrade-related investment measures. More details
were sought onthefunctioning of,andregulatory framework for,basic services sectors.
Inresponse, therepresentative ofUganda stated thattheGovernment wastrying toestablish
anormal market environment throughout theeconomy. Reduction andharmonization oftariffs was
amedium-andlong-termobjective.Alllawsaffectingcommercialandeconomicactivitiesinthecountry
werecurrently being reviewed, including procurement policies andintellectual property legislation.
Procurement preferences forlocal suppliers would, however, beretained. Arevision ofcustoms
valuation provisions andother procedures wasunderway withaview toimplementing therelevant
WTO Agreement by2000; theBrussels Definition ofValue waslikely tobeabandoned inthenear
future. Uganda wasaware ofthecomplexity ofthecurrent system ofpre-shipment inspection; changes
were under consideration.
Theexport taxoncoffee hadnotbeenintroduced forpublic revenue purposes, buttoensure
macro-economic stability during therecent boom inthesector. In1996, Uganda would replace the
current salestaxandthecommercial transaction levybyvalue added tax;details werecurrently being
worked out.Aspecial trade arrangement inthetobacco sector, where purchases ofleafwerelinked
toimport entitlements forcigarettes, hadbeenmade intheperspective offurther liberalization.
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Asnotified totheWTO Secretariat, theUganda National Bureau ofStandards wastheenquiry
point forinformation inthisarea. Given delays indeveloping international standards forsanitary and
phytosanitary protection, Uganda hadfeltcompelled tointroduce itsownmandatory requirements in
some areas.
Regional policy developments
Referring tocurrent civilunrest inneighbouring countries, members stressed theimportance
ofsocialstabilityandjusticeforeconomicprosperity.AlthoughUganda'sgeo-strategiclocationinvolved
risks, many participants alsosawasignificant potential forpositive economic co-operation intheregion.
Attention wascalled totheCommon Market forEastern andSouthern Africa (COMESA) andtherecent
Cross Border Initiative (BCI) forthefacilitation ofinvestment, trade andpayment flows.
Therepresentative ofUganda stressed theimportance ofregional integration forstability and
economic development, particularly inthecaseofland-locked countries. Therefore, Uganda hadplayed
aleading rôleinpromoting economic integration andcross-border trade. These initiatives were
complementary to,andlaidthebasis for,deeper andmore efficient co-operation attheglobal level.
*****
Itismyimpression thatwehadaveryproductive discussion ofUganda 'strade policy and
practices overthepasttwodays. Members wereinterested inrecent economic developments andthe
authorities 'endeavours toovercome alegacy ofeconomic andsocial disruption. Trade liberalization,
underpinned bybetter macro-economic management, hashelped torestore asound basisforinvestment,
employment andgrowth.
Members highly appreciated that,inadifficult regional andeconomic environment, further
reforms were underway tofacilitate expansion ofproduction andtrade andpromote theintegration
oftheinformal sector. Uganda wasencouraged topersevere initsefforts torationalize thetaxand
tariff system, abolish remaining trade restrictions, simplify administrative procedures, andimprove
theinfrastructure. While expressing theimportance forUganda toexpeditiously adjust itsdomestic
legislation tonewWTO provisions, members alsorecognized itsrequest fortechnical assistance in
identifying theareas concerned andpreparing changes.
Inconclusion, Ishould liketoexpress mypersonal appreciation forUganda 'srepresentation
andparticipation atthismeeting. Ittestifies totheauthorities 'outward-oriented policy perspective,
commitment totheWTO system andresolve infurther pursuing animpressive liberalization agenda.
END