RESTRICTED
WORLD TRADE WT/BOP/11
20May1996
ORGANIZATION(96-1980)
Original: French
1996 CONSULTATION UNDER ARTICLE XVIII OFTHE GATT 1994
Basic Document Supplied byTunisia
Overview oftheeconomic situation ofTunisia in1994 and1995
In1987, Tunisia adopted aStructural Adjustment Programme aimed atestablishing amarket
economy inorder toavoid distortions andoptimize resource allocation through better utilization of
production capacity, improvement oftheexternal payments position andgradual integration ofthe
Tunisian economy intotheworld economy.
TheEighth Economic andSocial Development Plan(1992-1996) isanimportant stage inthe
implementation oftheplanned reforms.
Thefirsttwoyears ofthePlan(1992-1993) weremarked bytheintroduction ofseveral reforms
intheareaofeconomic andfinancial policy. Encouraging results wereobtained, inparticular asregards:
- GDP growth, withanaverage ratewhich outstripped theforecasts forthetwoyears;
- control ofinflation, which ranatabout 5.5percentin1993 compared with7.8per
centin1991;
- shrinking thebudget deficit byincreasing revenues andcompressing public spending.
Thanks tothese results, anewstage began in1994, withanacceleration inthepaceof
introduction oftheplanned reforms andpreparation ofthenextphase.
Thus, theperiod 1994-1995 wascharacterized byastrengthening anddeepening ofthestructural
reforms invarious areas:
- Prices anddomestic trade: todate, 87percentofproducts attheproduction level
and80percentofproducts atthedistribution levelhavebeenliberalized.
Thisliberalization hasgonehandinhandwithareorganization ofdistribution channels and
theestablishment ofaframework governing competition.
- Foreign trade: inafirststage, theprogramme ofgradual liberalization brought the
elimination ofquantitative restrictions onrawmaterials, semi-finished products and
capital goods soastorationalize supply oftheproduction sector.
Asecondstageinvolvedthegradualintroductionofforeigncompetitionthroughtheliberalization
ofproducts forwhich locally-produced likeproducts exist.WT/BOP/11
Page2
Thisliberalization wasaccompanied byamajor tariffreform thatreduced themaximum tariff
rateto43percent, together withtheintroduction ofaprovisional supplementary dutydesigned to
provide phased-down protection forliberalized products.
- Monetary andfinancial policy: thereforms undertaken inthisareashould make it
possible torehabilitate interest rates asaresource allocation instrument andallow
financial institutions, which have accompanied theprofound changes ineconomic
activity, togoonsupporting theproduction sectors byproviding thenecessary finance.
ExternalfinancialliberalizationwaslaunchedinDecember1993,withtheintroductionofcurrent
convertibility ofthedinar, andconsolidated in1994withtheestablishment oftheinter-bank exchange
market.
WiththeenactmentoftheLawof14November1994,thefinancialmarkethasundergonefurther
adjustments withaviewtospeeding upthedevelopment ofthecapital market.
- Investment: freedom ofinvestment isprovided forinthenewcodeofinvestment
incentives adopted inDecember 1993. Thiscodecovers allsectors ofactivity with
theexception ofthose governed byspecial lawsowing totheirspecific characteristics
(mining, energy, finance, domestic trade).
Thus, despite thedifficulties withwhich thisperiod wasfraught (persistent drought during
twoconsecutive years in1994 and1995 andprofound changes intheinternational environment), the
firstfouryears ofimplementation oftheEighth Plan(1992-1996) were characterized bymajor
achievements bothintheimplementation ofstructural reforms aswellasinquantitative terms.
Inparallel withthestructural reforms, theauthorities pursued suitable macroeconomic policies
thatbrought thefollowing results:
- Achievement ofaGDP growth rate(atconstant 1990 prices) of2.0percentin1993,
3.3percentin1994 and3.5percentin1995, compared with3.9percentin1991
and7.8percentin1992;
- Growth ofexports ofgoods atcurrent prices of24.9percentin1994 and10.1per
centin1995, compared with5.9percentin1993;
- Reduction ofthebudget deficit to3.3percentofGDP and2.6percentin1994.
In1995 and1996, other salient features were thecontinuing implementation ofthe
WTO Agreements andpreparation oftheimplementation oftheAssociation Agreement withthe
European Union, signed on17July1995.
Asignificant development in1995wasthepressure brought tobearonthebalance ofpayments
asaresult oftheriseinimport requirements forfoodandother products, aswellasaslow-down in
thepaceofexports ofagri-food products andinthetourism sector.
I. OVERVIEW OFTHE BALANCE-OF-PAYMENTS SITUATION AND PROSPECTS
Theexternal payments situation isoneofthecentral concerns ofTunisian economic policy.
Inrecent years, anddespite thefavourable performance ofexports, thebalance ofpayments
hascome under heavy pressure asaresult ofthedeterioration intheterms oftrade andtheriseinWT/BOP/11
Page3
imports ofcertain goods, particularly foodin1994 and1995. Thus, thecurrent deficit amounted to
4.0percentofGDPonaverage peryearduring thefirstfouryears oftheEighth Plan, compared with
the2.5percentforecast.
For1994, thebalance ofpayments wassubject tosevere tension despite thefavourable trend
inexports. Thissituation wastheresult ofacombination ofseveral factors, including adecline in
petroleum revenues because oflower output, aswellasadecline inprices. Lowrainfall compounded
these factors andincreased theimport needs forcereals andother foodproducts.
Growth ofexports ofgoods amounted to24.9percentatcurrent prices, compared with9.4per
centin1993, thanks tohigher salesofoliveoilandfaster growth inother sectors, especially phosphate
fertilizers asaresult oftheupturn intheworld market.
Exports ofservices grew atamoderate rateof5.8percent, compared with16.4percentin
1993, asagainst forecasts of16percentgrowth.
Imports ofgoods andservices increased by8.6percentin1994, compared with9.5percent
in1993, theslower ratebeing duetothedecline inimports ofcapital goods asaresult ofslower
investment, which wasnotoffset bytheriseinfoodimports (30percent).
Thecurrent account deficit amounted toD267million in1994 (asagainst D830million in
1993), or1.7percentofGDP, compared withthe4.6percentforecast.
In1995, thebalance-of-payments pressure stemmed essentially fromtheriseinimport needs
forfoodproducts andother goods aswellasaslower rateofexports ofoliveoilandthetourism sector,
whereas in1994 theexport performance inthese products hadallowed atemporary improvement in
theexternal payments situation.
In1995 exports ofgoods grew by10.1percentatcurrent prices, compared with24.9per
centin1994. Thisperformance isattributable toweaker olive oilsalesandalower growth ratefor
other products compared withtheprevious year.
Exports ofservices grew atthesame rateasin1994, about 5.8percent. Altogether, exports
ofgoods andservices areexpected tohaverisenby8.6percent,compared with19.6percentin1994.
Meanwhile, imports ofgoods andservices areexpected tohaveincreased by12percentin
1995, compared with8.6percentin1994.
Thus, thecurrent deficit for1995 isexpected tobeD690million, or4percentofGDP,
compared withD267million and1.7percentofGDP, respectively, in1994.
Thisriseinthecurrent deficit in1995confirms thattheimprovement in1994wastemporary
andthattherising trend inthecurrent deficit recorded since thelaunching oftheEighth Planin1992
iscontinuing.WT/BOP/11
Page4
Main Indicators ofCurrent Payments
1991 1992 1993 1994 1995 1996*
Exports ofgoods andservices (%)
-atcurrent prices
-atconstant 1990 prices3.1
-0.911.6
8.09.4
3.519.6
12.48.6
2.39.5
4.9
Imports ofgoods andservices (%)
(excluding gaspipeline and
Miskar)
-atcurrent prices
-atconstant 1990 prices-0.4
-5.613.6
8.79.5
2.68.6
4.412.7
6.49.9
3.9
Current deficit inMD
asapercentage ofGDP542.7
4.5758.7
5.5830.6
5.7267.0
1.7690.0
4.0770.0
4.0
*Forecast.
Source: Ministry ofEconomic Development.
Thenextfewyears from 1996 onwards willbedevoted toimproving theexternal payments
situation andconsolidating progress intheforeign debtposition soastoensure thatthedevelopment
effort maybepursued.
Suchimprovement isparticularly necessary because theTunisian economy isbecoming more
andmore open totheexterior withtheimplementation ofTunisia 'scommitments under theWTO,
thesigning oftheAssociation Agreement withtheEuropean Union, andexchange liberalization and
thecurrent convertibility oftheTunisian dinar.
Toachieve thisgoal, Tunisia willhavetomake asustained effort topromote exports andwin
newmarkets bypursuing thediversification ofitseconomy, raising productivity andcurbing production
costs.
Tothisend,Tunisia hasembarked onanumber ofprogrammes toensure thattheplanned
improvement isachieved. These include:
- BolsteringexportpromotionactivitiesthroughthemodernizationofCEPEXmechanisms
andprocedures, simplification andstreamlining offoreign tradeprocedures, andfurther
promotion activities through theorganization oftrade events.
- Establishment andpractical implementation in1996ofafar-reaching programme for
upgrading thenational economy withaviewtomodernizing Tunisian enterprises and
theirenvironment inorder toenhance theircompetitiveness andenable themtoadapt
tothenewopen economic context andtakeonforeign competitors inthedomestic
market, strengthen theirposition intraditional markets andpenetrate newmarkets.WT/BOP/11
Page5
Thisprogramme willstretch overtwoperiods andinvolve acostofD2.45billion initsfirst
phase (1996-2000), 60percentofwhich willbespent onenterprise modernization and40percent
onstrengthening basic infrastructure andimproving theactivities ofsupport andpromotion bodies.
- Pursuing thereforms aimed atpromotion andmodernization offinancial institutions
andboosting thefinancial market through greater openness totheexterior, aswell
asconsolidatingtheexchangemarketandexternalfinancialliberalizationsoasgradually
toachieve fullliberalization ofthedinar.
- Curbingthebudgetdeficitinordertopreservefinancialbalance,byapplyingmoderation
andrigour tospending while enhancing theproportion ofgovernment revenues and
restricting recourse toborrowing. Thus, thedeficit waskeptwithin thelimits of2.6per
centofGDP in1994 compared with3.3percentin1993.
- Further improvement ofthedebtindicators andincreasing direct foreign investment.
Taking these factors intoaccount, theforecasts for1996arebased onagrowth rateofexports
of4.9percentatconstant prices, higher thanthatofimports, setat3.9percent, despite therisein
import needs forcereal products.
However,thesignificantincreaseinthepricesofsomeproductsontheworldmarket,particularly
cereals, andtheensuing deterioration intheterms oftrade, willcause thetwotrade components,
measured incurrent prices, tofollow different trends.
Thus, exports ofgoods andservices areexpected toincrease in1996 atarateof9.5percent
incurrent prices, asagainst 9.9percentinthecaseofimports.
Thecurrent deficit should reach D770million compared withtheD690million expected in
1995, which would represent 4percentofGDP, orthesame levelasexpected in1995. Thisisalmost
double thetarget setintheEighth Planof2percentofGDP.
Thefoodtrade deficit alone should represent 1.8percentofGDP.
1. Goods balance
Despite theeffort made toboost exports, inparticular asfrom1986, theforeign tradebalance
ismarked byastructural deficit intrade ingoods owing tothesteady riseinthepaceofimports.
Thetrade deficit amounted toD2,291 million in1995, compared withD1,359.1 million in
1991.
Theimport-exportcoverratefluctuatedbetween60.9percentand70.7percentoverthisperiod,
inlinewithnational andinternational circumstances.WT/BOP/11
Page6
Trade Balance inGoods
(inMD)
1991 1992 1993 1994 1995 1996*
Exports 3,429.9 3,549.5 3,760.0 4,696.6 5,172.9 5,572.1
Imports 4,789.0 5,688.3 6,171.6 6,647.5 7,464.1 8,123.3
Deficit 1,359.1 2,138.8 2,411.6 1,950.9 2,291.2 2,551.2
Cover rate(%) 71.6 62.4 60.9 70.7 69.3 68.2
*Forecast .
Source: 1996 budget.
1.1 Export trends
Theaverage growth rateofTunisian exports since 1992 hasbeen9.2percent. Thisgrowth
hasprimarily concerned textile products andproducts ofthemachinery andelectrical industries.
Thegrowth rateofexports ofgoods reached 24.9percentatcurrent prices attheendof1994.
Thisgrowth wasobserved inthemainmanufacturing sectors, namely agri-food (inparticular
olive oil),phosphate products, textiles, machinery, electrical andmetalworking industries, and
miscellaneous industries.
Export growth continued in1995 butatalower ratethanin1994. Atconstant prices, the
ratewasthelowest sincetherecovery of1992. Agri-food exports declined by15.6percentfollowing
aslump insalesofolive oil(down 29percent), seaproducts (10.3 percent)andwines andalcoholic
beverages (29.7 percent).
Going beyond thequantitative aspects, thestructure ofTunisian exports ischaracterized by
thefollowing salient features:
- Steady deceleration inthegrowth rateofenergy exports (-1.8percentannually between
1992and1995) andthereversal inthetrend oftheenergy balance, which nowshows
adeficit, aswellasadecline intheshare ofenergy exports within totalexports, from
48percentin1984 to8percentin1994 and7.2percentin1995.
- Theweakness ofagri-food exports linked tofluctuating weather conditions (frequent
droughts). Average annual growth was-3.9percentperyearbetween 1992and1995.
- Predominance ofthetextiles andleather goods sector inexports, withashare rising
from38.7percentin1991to50percentin1995, with70percentofallforeign trade
transactions carried outbynon-resident enterprises going tocountries oftheEuropean
Union, which heightens therisksofaworsening ofthetrade deficit.WT/BOP/11
Page7
Distribution ofExports bySector
(inMD)
1991 1992 1993 1994 1995 1996*
Agriculture andfoodproducts 521.0 368.0 437.7 610.4 515.4 445.0
Phosphates andchemicals 492.0 492.0 471.2 597.4 642.7 730.0
Energy products 489.5 538.4 455.4 441.6 436.9 482.6
Textiles andleather 1,327.8 1,532.8 1,769.2 2,235.4 2,583.2 2,890.0
Machinery andelectrical industries 405.2 424.6 441.8 632.0 711.0 789.5
Other 194.4 193.7 184.7 188.8 283.7 235.0
TOTAL 3,429.9 3,549.5 3,760.0 4,696.6 5,172.9 5,572.1
*Forecast.
Source: 1996 budget.
1.2 Import trends
During theperiod 1992-1995, imports grew atanaverage rateof12.6peryear(atcurrent
prices). In1995 thegrowth ratewas12percent.
Thegrowth rateofimports thusremained higher thanthatofexports, aswellasexceeding
thePlanforecasts ofanannual increase ofabout 7.4percent.
Many factors contributed tothisincrease, inparticular:
- Higher domestic demand asaresult ofliberalization, therelative upturn ininvestment
andthedecline inagricultural andenergy production.
- Higher prices forfoodproducts, inparticular cereal products, asaconsequence of
dwindling world stocks andimplementation byTunisia 'smain suppliers oftheir
commitments relating todomestic support andexport subsidies, aswellasthe
introduction ofataxoncereal exports toTunisia.
Capital goods andrawmaterials andsemi-finished products
Imports ofthissector amounted toD3,205.8 million in1993andD3,589.8 million in1995.
Their share oftotalimports amounted to48percent.
Thisgrowth resulted fromtheriseindomestic demand following theupturn ininvestment after
three consecutive years ofstagnation.
Thistrendwillcontinue in1996withthepractical implementation oftheprogramme toupgrade
Tunisian enterprises andtheexpected increase ininvestment (12.2 percent).
Theforecasts areforanincrease inimports ofsemi-finished goods of10.7percentandof
capital goods of14.6percent.WT/BOP/11
Page8
Non-food consumer goods
These imports represent anincreasingly large share ofTunisian imports, rising from 29per
centin1991 to34percentin1995.
Energy
Thereversal ofthetrendintheenergy balance isconfirmed. Tunisia isbecoming anetimporter
ofpetroleum products.
Energy Sector Indicators
ProductsResources Consumption Balance
1994 1995 VAR
(%)1994 1995 VAR
(%)1994 1995 VAR
(%)
Petroleum 4,461.2 4,309.1 -3.4 3,312.4 3,183.8 -3.9
Natural gas 756.8 923.2 22.0 1,687.3 1,947.6 15.4
Hydraulic 11.3 11.1 -1.8 11.3 11.1 -1.8
Coal - - - 71.3 68.6 -
TOTAL 5,229.0 5,244.0 0.3 5,082.0 5,211.0 2.5 147 32.5 -77.9
National primary energy resources amounted to5,243.6 KTOE in1995 compared with
5,229.3 KTOE in1994, anincrease of0.3percent. Thisriseisprimarily attributable toanincrease
innatural gasresources of22percent.
Primary energy consumption rosefrom 5,082.3 KTOE in1994 to5,211.1 KTOE in1995,
or2.5percent.
Consequently, theenergy balance fellfrom147.0 KTOE atendDecember 1994to32.5KTOE
atendDecember 1995, or77.9percent.
Thistrend inthenational energy balance shows thatTunisia, which traditionally hadabig
surplus intheenergy sector, isbecoming anetenergy importer.
Inaddition, theenergy sector 'sshare ofGDPhassteadily declined: itamounted to7percent
in1994 compared with11.5percentduring theperiod 1982-1986. Thesame istrueofpetroleum
revenues within government revenues, which declined from26percentin1984to7.7percentin1994.
Thisistheresult ofadecline inpetroleum production together withrapid growth ofprimary
andfinalenergy consumption, aswellasafallincrude oilprices since 1985.
Food products
Theagricultural sector wasbadly hitbytheadverse weather conditions in1994and1995, which
hadthefollowing economic repercussions:WT/BOP/11
Page9
- Alower-than-forecast GDP growth rate(4.8percentperyearasagainst 5.8percent
forecast fortheperiod 1992-1995) dueinparticular tothenegative growth rateof
agricultural GDP, -2.1percentperyearcompared withtheforecast 1.8percent.
- Decline inthevalue ofoutput ofD34million in1994 andD374million in1995 (at
constant 1990 prices), or2percentand18percentofoutput, respectively.
- Exceptional budgetary outlays ofD54million tocopewiththeimplications ofthe
drought forproduction factors andtomitigate farmers 'lossofincome andreduced
financing capacity.
- Adecline inexports of5.5percentin1995 and6percentin1996 (forecasts) asa
result ofreduced availability ofolive oilforexport.
- Ariseinimports offoodproducts of30percentin1994 and54percentin1995,
orD824million compared withD543million andD418million in1994 and1993.
Theeffects ofthedrought areexpected toextend to1996imports, insofarasimports
ofbarley andother fodder products willcontinue untilMarch 1996, andwheat imports
atleastuntilMay.
Asfromearly1994, theimpact ofthedrought made itselffeltonimports, asaresult ofmassive
imports ofbarley andother fodders. Thisrising trend grew steeper in1995 withimports ofdurum
wheat. Thevalue ofimports wasaffected tosome extent bythehighprices ofmostproducts compared
withprice levels inrecent years.
For1995, thefooddeficit resulting from thetwoyears ofdrought reached D362million.
Theeffects in1996 should besimilar tothose in1995, given thelevel ofolive oilproduction in
agricultural year1995-1996.
Inviewofthechronic deficit andfluctuations inthefoodbalance, theCommittee onAgriculture
hasbeenrequested toinclude Tunisia inthelistofnet-food-importing developing countries.
Todealwiththefluctuations intheagricultural sector, Tunisia hasimplemented anumber of
measures, which include:
- Achieving greater diversification oftheeconomy through abetter contribution ofthe
manufacturing andnon-agricultural sectors togrowth; and
- strengthening theagricultural sector 'scontribution tooverall economic growth inthe
framework oftheAgricultural Structural Adjustment Plan.WT/BOP/11
Page10
Breakdown ofImports ofGoods byUtilization Group
(inMD)
1991 1992 1993 1994 1995 1996*
Capital goods 1,205.5 1,395.3 1,520.9 1,450.7 1,463.3 1,650.0
Rawmaterials and
semi-finished 1,498.7 1,840.2 183.2 1,898.4 2,186.8 2,380.0
Energy products 365.8 397.1 457.1 471.8 511.3 483.3
Food products 310.9 380.0 418.1 542.8 823.9 790.0
Non-food
consumer goods 1,408.1 1,675.7 1,945.3 2,283.8 2,478.8 2,820.0
TOTAL 4,789.0 5,586.3 6,171.6 6,647.5 7,464.1 8,123.3
*Forecast.
Source: 1996 budget.
Evolution ofTerms ofTrade
1990 1991 1992 1993 1994 1995
Import price index 100.0 105.5 110.3 117.7 122.4 129.6
Export price index 100.0 104.0 107.4 113.7 120.9 128.0
Terms oftrade 100.0 98.6 97.4 96.6 98.8 98.8
-1.4 -1.2 -0.8 +2.2 0
Source: Ministry ofEconomic Development.
1.3 Geographical pattern oftrade
Tunisia 'sforeign tradeischaracterized byahighdegree ofgeographical concentration, despite
efforts todiversify markets.
Anexamination ofTunisia 'strade balance withitsmain partners reveals astructural deficit
intradewith39countries which absorb 17percentofexports, andanalmost continuous surplus with
21countries which supply 9percentofimports.
The15biggest customers (eight European Union countries, United States, Libya, Algeria,
India, Switzerland, Turkey andMorocco) alone account for90percentoftotalTunisian exports.
Thefirst15suppliers (eight European Union countries, United States, Japan, USSR, Libya,
Switzerland, Turkey andAlgeria) account for84percentoftotalTunisian imports.WT/BOP/11
Page11
Theconcentration isparticularly heavy inrelation totrade withtheEuropean Union, which
continues tobeTunisia 'sprincipal partner.
Countries oftheEuropean Union
TheEuropean Union continues tooccupy apredominant place inbothimports andexports.
Tunisia 'sexports toandimports fromthisregion account for80percentoftotalexports and
70percentoftotalimports respectively.
France, ItalyandGermany aretheprincipal partners andalone account forabout 80percent
ofTunisia 'strade withtheEuropean Union.
Thisconcentration isattributable tothepreferential treatment granted toTunisian exports and,
inparticular, tothefactthat,generally speaking, thecountries concerned arethebiggest direct investors
inTunisia (France, Belgium, Germany, Italy, Netherlands).
Infact,60percentoftotalexports totheEuropean countries come under theoffshore regime
and70percentofthese goods aretextile products.
AMU countries
These countries areTunisia 'ssecond most important partner. Their share oftotaltrade is
increasing, interms ofbothimports andexports.
With most ofthese countries, thebalance isinsurplus andexports arefairly diversified.
Other countries ofWestern Europe
Trade withthese countries remains atalowlevel, especially asfarasTunisian exports are
concerned.
Thechronic trade deficit isnotimproving. In1995, therateofcover was40.5percentas
against 59.7percentin1994.
Eastern andCentral European countries
Since1990,thetradebalancewithmostofthesecountrieshasbeensubstantiallyindeficitbecause
ofthedecline inexports ofphosphate fertilizers andtheincrease indirect andindirect imports, especially
agricultural andfoodproducts.
Therateofcover withthese countries was13.6percentin1994 and9.2percentin1995.
American continent
Trade withtheAmerican continent hasimproved, inparticular asfarasexports areconcerned,
theshare having risenfrom1.4percentin1993to2.1percentin1995, whereas theshare inimports
hasremained around 7.5percent.
FortheAmerican continent therateofcover hasimproved from 14percentto20percent.WT/BOP/11
Page12
Arab countries oftheMiddle East
Thevolume oftrade withthese countries ismodest. Their share ofTunisia 'strade flows is
about 2percentforexports and1.5percentforimports.
Trade withthese countries isdominated byrawmaterials, semi-finished products andenergy.
African countries
There isrelatively littletradewithSub-Saharan Africa. However, animprovement wasnoted
in1995 asaresult ofthedevelopment ofexports toSouth Africa andCôted'Ivoire.
Asian countries
Trade withAsiaischaracterized byahighlevelofimports, especially from Japan, Turkey
andChina.
Exports, which aredominated byphosphate fertilizers, areprogressing slowly, inparticular
exports toIndia, Indonesia, Iran, China, Malaysia andPakistan.
In1995, Tunisian exports toAsia increased byabout 11.8 percentwith aconsequent
improvement intherateofcover which rosefrom47percentin1994 to53percentin1995 thanks
totheconsolidation oftheshare ofthephosphate fertilizer market andhigher selling prices forthese
products.
2. External debt
Taking intoaccount thecurrent deficit onthebalance ofpayments andthemobilization ofthe
foreign exchange reserves needed tosupport theliberalization offoreign trade operations anddebt
service repayments, external borrowing reached D1,430.9 million in1994 ascompared with
D1,408.0 million in1993. Itisexpected thatlong andmedium-term borrowing willreach
D1,549 million in1995.
For1996, theestimates point toaborrowing requirement totheorder ofD1,605 million,
taking intoconsideration thefinancing requirements forupgrading theTunisian economy andimproving
itscompetitiveness.
Inanyevent, Tunisia hasbeenabletobring itsdebtindicators under control, inasmuch as
thedebtratiofellfrom53.9percentofgross disposable national income (GDNI) in1993to52.5per
centin1994, reaching 52.1percentin1996.
Thedebtservice indicators show asimilar trend, thedebtservice ratiohaving fallen from
19.9percentofcurrent revenue in1993 to18percentin1994 and1995.WT/BOP/11
Page13
External Debt Indicators
1993 1994 1995* 1996**
Total debt 7,794.0 8,462.0 9,240.0 9,987.0
-long-term debt 5,962.0 6,275.0 6,524.0 7,047.0
-medium-term debt 1,832.0 2,187.0 2,716.0 2,940.0
-asapercentage ofGDNI 53.5 53.3 53.8 52.1
Debt service 1,337.5 1,445.0 1,565.0 1,705.0
-asapercentage ofcurrent revenue 19.9 18.0 18.0 17.9
-asapercentage ofexports of
goods andservices 22.6 20.4 20.4 20.3
*Expected.
**Forecast.
Source: 1996 budget.
II. MANAGEMENT OFFOREIGN TRADE
Foreign trade isgoverned byLawNo.41-94 of7March 1994 andthevarious implementing
decrees published on29August 1994. ThisLawestablishes theprinciple offreetrade.
Itrestricts onlyproducts which affect security, public order, hygiene, health, morality, species
protection andthecultural heritage.
Italsoseparates foreign-trade operations fromthepayment operations subject toLawNo.93-48
of8May1993 ontheModalities andProcedures fortheSettlement ofForeign Transactions.
Theproducts excluded from thefree-trade regime aresetoutinlistsappended toDecree
No.94-1742 of29August 1994.
These listswere communicated totheGATT Secretariat inaccordance with Tunisia 's
commitments during thelastsimplified consultation inJune1994.
ListB,appended totheDecree inquestion, concerns products provisionally subject toimport
restrictions during atransitional period corresponding totheperiod necessary tocomplete theimport
liberalization programme.
Under Decree No.95-2277 of13November 1995, during themonth ofNovember 1995 this
listwasshortened byeliminating made-up textile articles, which cannowbeimported freely.
Infact,thelistnowincludes onlyvehicles (passenger motor vehicles), imports ofwhich will
continue tobesubject torestrictions, inviewofthefactthatthetradeintheseproducts hasimplications
forthedevelopment ofthemechanical industry sector through cooperation andpartnership activities,
while,atthesametime,theconsumptionoftheseproductsneedstobecontrolledforbalance-of-payments
reasons.WT/BOP/11
Page14
Foreign trade procedures
Decree No.94-1743 of29August 1994established theprocedures applicable toforeign trade
transactions. Itrevoked Foreign Exchange Notice No.10andallprevious regulations.
ThisDecree respects theprinciple offreetradeestablished bytheLawof7March 1994, while
reducing andsimplifying import andexport formalities andprocedures.
Therelaxation introduced bythisDecree relative totheprevious regulations mainly concerns
foreign trade.
Thus, thenewregulations provide for:
- Theabolition oftheannual import authorization which applied totheimportation of
rawmaterials andsemi-finished products byindustry.
Inviewoftheliberalization ofindustrial inputs, there isnolonger anyneedforthis
authorization.
- Theabolition oftheimport cardusedforimports ofgoods uptoD1,000.
Theonlyforeign trade documents currently required under theDecree inquestion arethe
following:
Import Certificate (CI)
Thisisusedforimports ofproducts which arefreeunder LawNo.94-41 of7March 1994.
Itisinnowayaprior administrative authorization.
Supported byacommercial invoice, itisdomiciled withanauthorized intermediary andremains
valid foraperiod ofsixmonths.
Twocopies oftheCIandcopies oftheinvoices aresent,through theauthorized intermediary,
totheCentral Bank ofTunisia onthedayfollowing domiciliation.
Theimported goods arecleared through customs upon presentation ofacopyoftheCI,the
invoice usedfordomiciliation andthedefinitive invoice.
Import orexport authorization
Import orexport authorizations arerequired fortheimport orexport ofproducts excluded
from thefree-trade regime.
They areissued bydecision oftheMinister responsible fortradeontheadvice oftheMinistry
concerned andarevalid foraperiod of12months.
Requests forprior authorization accompanied bythecommercial contract arelodged withan
authorized intermediary whopasses them ontotheMinistry ofTrade fordecision.
Intheevent ofafavourable decision bytheMinistry ofTrade, which, fromdaytoday,provides
theCentral BankofTunisia andtheCustoms Administration withdetails oftheauthorizations granted,
theauthorized intermediary proceeds withthedomiciliation oftheauthorization.WT/BOP/11
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Definitive invoice
Forfreely exportable products, exports onfirmsales involving thepayment ofmore than
200dinars areeffected simply bypresenting adefinitive invoice tocustoms.
Moreover, thedecree inquestion alsointroduced concessions inconnection withtheprocessing
offoreign trade documents.
Thankstotheliberalizationoftransfersrelatingtocurrenttransactions,includingthosepertaining
toforeign trade, these arenolonger subject toprior endorsement bytheCentral Bank ofTunisia.
III. LIBERALIZATION PROGRAMMES
1. Imports
Theimport liberalization programme hasbeenimplemented inphases. Thefirstphase gave
priority toindustry byliberalizing rawmaterials, semi-finished products andcapital goods not
manufactured locally withaviewtoproviding arational basisforthesupply ofindustrial enterprises.
Thesecond phase hadtheaimofprogressively introducing foreign competition forlocal
production byliberalizing products similar tothose manufactured locally.
Thisliberalization wasmade progressive toenable Tunisian enterprises toadapt tothenew
context andtoencourage them toimprove thequality oftheirproducts andtoorganize themselves
tofacethecompetition.
Thus, therateofliberalization ofimports measured inproduction terms reached 48percent
in1992 and60percentin1993.
Once thisstageofliberalization hadbeenattained, in1994theopening oftheTunisian economy
accelerated rapidly withtheliberalization ofanadditional range ofproducts representing about 23per
centoflocalproduction, which brought theliberalization rateto83percent.
Attheendof1995, therateofliberalization ofimports inproduction terms hadreached about
92percent,following theliberalization ofmade-up textile products. Atthatpoint, theproducts which
remained subject toimport restrictions were mainly those affecting security, public order, hygiene,
health, morality, species protection andthecultural heritage andmotor vehicles.
Import Liberalization
Year Ratein%
1988 10.0
1991 30.5
1992 47.7
1993 60.0
1994 83.0
1995 92.0WT/BOP/11
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Theliberalization canbebroken down bysector asfollows:
Sectoral Breakdown ofImport Liberalization
Sector Ratein%
Textiles, leather andclothing 99.0
Mining andenergy 100.0
Construction 98.5
Electrical andmechanical 99.4
Forthesector "textiles, leather andclothing, otherthanhand-made carpets andwornclothing",
therateofliberalization inproduction terms is99percent. Mining andenergy products havebeen
100percentliberalized. Theliberalization ratesforconstruction materials andmechanical andelectrical
products are98.5percentand99.4percentrespectively.
2. Import taxes
Theduties andtaxes collected atimportation areasfollows:
- Customs duties atratesestablished bytheimport tariff. These varybetween 0and
43percent.
- Provisional complementary duties (DCP) foralimited listofproducts which areto
benefit from anupgrading programme.
Itisplanned toabolish theDCP completely from January 1998, afterwhich theTunisian
economy willbeprotected onlybycustoms duties.
3. Foreign exchange regulations andfinancial market
In1994, newmeasures were taken tomake theforeign exchange regulations more flexible
(CBT Circulars No.94-07 of31May1994 andNo.94-132 of7September 1994). These included:
- Liberalization oftheregulations relating totheinternational carriage ofgoods.
- Anincrease inthemaximum amount offoreign currency thatcanbere-exported by
non-residents without formalities. Thisamount hasbeenraised fromD500toD1,000.
Inorder totransfer larger amounts, thetraveller mustmake outadeclaration onentering
Tunisia, andhaveitapproved bythecustoms services.
- Theliberalization ofthereconversion ofdinars obtained from thesaleofforeign
currency bynon-resident travellers hitherto limited toD100.
- Abolition ofCentral Bank endorsement forforeign trade documents.
Greater flexibility hasalsobeenintroduced inconnection withtheliberalization ofcapital
transactions.
Thus, investment abroad byresident companies withforeign exchange earnings hasbeen
liberalized within annual limits varying from 50,000 dinars forliaison offices to100,000 dinars for
subsidiaries andequity participation.WT/BOP/11
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Decree 95-1128 of28June1995amending Decree No.77-1081 of27July1977 establishing
theConditions ofApplication oftheForeign Exchange Code hasmade iteasier fornon-residents to
invest inexisting Tunisian companies.
Infact,thepurchase ofTunisian securities giving theright tovoteorshares incompanies
established inTunisia isunrestricted when thetotallevelofforeign participation inthecapital ofthe
company, taking intoaccount theacquisitions inquestion, doesnotexceed 10percentofthecapital
forcompanies whose shares arequoted ontheTunis Stock Exchange and30percentofthecapital
ofother companies.
Itshould alsobementioned that,inMarch 1994, aninter-bank foreign exchange market was
setup.Itreplaced thesystem ofadministratively fixedratesandenabled market forces toplayagreater
roleinthedetermination oftheexchange rate.
Asregards thefinancial market, theLawof14November 1994 confirmed theseparation of
themarketmanagementfunctionfromtheregulatoryfunction.Tothisend,thefollowingbodiesprovided
forbythisLawhavebeenestablished: theFinancial Market Council, theStock Exchange andthe
Securities Deposit, Clearing andSettlement Company. Furthermore, inorder toensure thattransactions
aretransparent, anelectronic quotation system isbeing installed.