PRESS/TPRB/3
16February 1995
TRADE POLICY REVIEW BODY
Review ofCameroon, 13-14 February 1995
TPRB/GATT 1947 Council 'sEvaluation
TheTrade Policy Review Body oftheWorld Trade Organization (WTO) andtheGATT 1947
Council conducted itsfirstreview ofCameroon on13and14February 1995. Thetrade review of
Cameroon wascarried overfrom the1994 programme ofreviews under GATT 1947. Thetextof
theChairman 'sconcluding remarks isattached asasummary ofthesalient points which emerged during
thetwo-day discussion.
Thereview enables theCouncil toconduct acollective examination ofthefullrange oftrade
policies andpractices ofeachmember 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 andotherpreferential
agreements; thewider economic needs andtheexternal environment.
Arecord ofthediscussions andtheChairman 'ssumming-up, together withthese tworeports,
willbepublished induecourse asthecomplete tradepolicy review ofCameroon andwillbeavailable
from theWTO Secretariat, Centre William Rappard, 154ruedeLausanne, 1211 Geneva 21.
Since December 1989, thefollowing reports have been completed: Argentina (1992),
Australia (1989 and1994), Austria (1992), Bangladesh (1992), Bolivia (1993), Brazil (1992), Canada
(1990, 1992 and1994), Chile (1991), Colombia (1990), Egypt (1992), theEuropean Communities
(1991 and1993), Finland (1992), Ghana (1992), Hong Kong (1990 and1994), Hungary (1991), Iceland
(1994), India (1993), Indonesia (1991 and1994), Japan (1990 and1992), Kenya (1993), Korea, Rep.
of(1992), Macau (1994), Malaysia (1993), Mexico (1993), Morocco (1989), NewZealand (1990),
Nigeria (1991), Norway (1991), Peru(1994), thePhilippines (1993), Poland (1993), Romania (1992),
Senegal (1994), Singapore (1992), South Africa (1993), Sweden (1990 and1994), Switzerland (1991),
Thailand (1991), Tunisia (1994), Turkey (1994), theUnited States (1989, 1992 and1994), Uruguay
(1992) andZimbabwe (1994).
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Concluding Remarks bytheChairman oftheCouncil
1. Thisjointmeeting oftheTrade Policy Review Body andtheGATT 1947Council hasprovided
anopportunity toreview forthefirsttimethetrade policies andpractices ofCameroon. Asusual,
these remarks aremade onmyownresponsibility andarenotintended asasubstitute fortheCouncil 's
collective appreciation. Thefullreport oftheproceedings ofthemeeting willbecontained inthe
minutes.
Thediscussion focused onthree main topics.
(a) Macro-economic policy andstructural adjustment programme
2. Theparticipants congratulated Cameroon onthedetermination withwhich thecountry had
embarked upon adifficult programme ofreform withaviewtoestablishing amarket economy with
aliberal traderegime. Thishadledtoanopening upoftradewhich hadbenefited notonlyCameroon
butalsothemultilateral trading system ingeneral.
3. Theeffects ofthedevaluation oftheCFAfranc onCameroon 'seconomy aroused theinterest
ofmembers, whowere eager toobtain information about themeasures Cameroon intended totake
tocontain inflation andthebudget deficit andtopreserve theadvantages ithadderived from this
exchange rateadjustment.
4. Some members expressed concern about thelowlevelofinvestment recorded since 1986and
asked forfurther information about thecurrent investment regime andthemeasures which Cameroon
intended totakeinorder togiveinvestors greater security. Thecontinuation ofthetrade reforms
inprogress could alsohelpinthisrespect. Some members urged theCameroon authorities tospeed
uptheStateenterprise privatization process. They alsonoted theneedtofindways ofincorporating
theinformal sector more effectively intotheofficial economy.
5. Inreply, therepresentative ofCameroon pointed outthatdevaluation hadconsiderably improved
thecompetitiveness ofexports andthebalance-of-payments position. There hadbeenasignificant
slowdown insmuggling.
6. Theinitial surge inprices hadbeenmoderated byexempting certain staples andconsiderably
reducing import duties andtaxes ingeneral, aswellasbytaking measures suchastheremoval of
obstacles toimports, therecent lowering ofbankinterest ratesandthefreezing ofsalaries inthepublic
sector. Asregards thebudget, since1987, Cameroon hadbeenengaged uponanextensive programme
designed tobring public expenditure under control. Atthesametime, 50percentofpartofitsexternal
debthadbeencancelled andithadbenefited from several reschedulings.
7. TheCACEU customs andfiscal reforms, while reducing thecustoms advantages ofinvestment,
hadmaintained thegeneral liberal policy, including national treatment, thefreetransfer ofrevenue,
freedom tohireandfireandtheindustrial freezoneregime.
8. Studies wereinprogress ontheincorporation oftheinformal sector intothefiscal system and
thefinancing ofsmall businesses.
9. Theprivatization programme wasgoing ahead, withseveral projects inpreparation orbeing
implemented andwithstudies aimed atdefining agovernment strategy. Cameroon wasalsointhe
process ofdrafting abusiness codeinorder toprovide investors withsound legalprotection.
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(b) Thetrade regime
10. Theparticipants congratulated Cameroon onitspolicy oftradeliberalization, inparticular for
having introduced newcustoms andfiscal regimes andanewgeneral tradeprogramme in1994. They
noted theelimination orsignificant reduction ofquantitative restrictions, tariffexemptions andspecial
customs andfiscal regimes, aswellasthelowering ofcustoms duties. Thenewregime hadreduced
thecomplexity oftheoldsystem andrestricted theopportunities forfiscal fraud; however, thecustoms
service oftheCameroon might benefit from other reforms andimprovements. Inthisconnection,
questions were putconcerning Cameroon 'sexperience withthepre-unloading import inspection
programme.
11. Members alsoasked forclarification concerning thelegislative procedure forratification of
theWTO Agreement. AsCameroon hadnotsigned theTokyo Round Codes, members wanted to
know howitwould implement thenewWTO disciplines governed bythesingle undertaking principle.
Cameroon 'sintention toaccede totheAgreement onGovernment Procurement wasalsomentioned.
12. Council members expressed concern about anumber ofmatters related totrade policies:
- thesmall number ofbound tariff lines, evenattheendoftheUruguay Round, was
likely toaddtotheuncertainty surrounding thestability ofthereforms;
- explanations were requested concerning taxes, more particularly, thenon-automatic
temporary taxes andother taxes notdirectly linked tothesupply ofservices;
- thepossibilityofintroducingregulationsconcerninganti-dumping,countervailingduties
andthesafeguard measures provided forinArticle XIXoftheGATT;
- theState monopolies inspecific areas, including agriculture (inparticular cotton);
- finally, questions were asked about theimprovement oftheprocess ofpreparing
technical standards.
13. Withregard toexport policies, several members questioned thewisdom ofimposing taxes on
theprincipal agricultural exports. Although these taxes hadbeenintroduced forfiscal reasons, they
might cancel outtheimprovements incompetitiveness resulting from devaluation.
14. Inthisconnection, therepresentative ofCameroon noted thattheratification oftheAgreement
Establishing theWTO would beexamined attheJune1995session oftheParliament. TheSecretariat
would beinformed oftheoutcome atthesame timeasitwasnotified ofthebinding oftariff rates
resulting from thecustoms andfiscal reforms.
15. Hesaidthatthere wereplans forageneralized preferential tariff within CACEU which was
moving towards aneconomic union: infiveyears, regional imports would beessentially free.
16. Theimportverificationprogrammehadhadadeterrenteffectonfraudandhadledtoasubstantial
improvement inrevenue. Theimplementation oftheprogramme wasopentocompetition among the
inspection companies.
17. Quantitative restrictions hadbeenremoved except insofarasneeded tomeetpublic health,
security andenvironmental protection requirements.
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18. Cameroon hadrecognized theneedtointroduce legislation onanti-competitive practices and
standardization andwascounting ontechnical assistance from theSecretariat andWTO members in
these fields.
19. Arevision ofgovernment procurement procedures wasinprogress andwould taketheform
ofanewlawensuring greater transparency andopening upthemarket tointernational competition.
20. Theexport taxes oncertain products wereintended toenable theTreasury totakeadvantage
oftheimmediate effects ofdevaluation, buttheywere alsoameans ofpromoting localprocessing.
These duties wereonlytemporary andhadbeenapproved inthecontext oftheAnnual Finance Act.
21. Themonopoly ontheforeign marketing ofcotton fibre wastobeabolished assoon as
SODECOTON hadbeenprivatized.
(c) Theexternal environment
22. Members stressed theimportance ofCameroon 'strade withtheEuropean Union andwanted
toseegreater diversification ofexports atbothregional andsectoral level. Questions were asked
concerning various aspects ofthepreferences towhich Cameroon wasentitled, including those granted
bytheLomé Convention. Itwasnoted thatCameroon alsohadtoconfront anumber ofobstacles relating
tomanufactures andsemi-manufactures.
23. Therepresentative ofCameroon saidthatthesystem ofcommercial preferences guaranteed
bycertain conventions hadbeenseverely eroded andnoted thatthesubsidy policies applied bysome
members weredestabilizing localproduction units. Herenewed hisappeal toparticipants topromote
investment inCameroon which waspursuing an"open door" policy.
Conclusions
24. Themembers congratulated Cameroon onitsdetermination topushahead withmacro-economic
stabilization andtrade liberalization measures, whose irreversibility hadbeendulystressed. They
emphasised theimportance forCameroon ofmaking additional commitments andbinding more tariffs
withaviewtoensuring thestability andcontinuity ofthereforms andencouraging tradeandinvestment.
Theparticipants expressed thehopethattheconsolidation ofthereforms inCameroon would attract
investment andbring itsustained economic growth.
END