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Trade Policy Review Mechanism Senegal RESTRICTED GENERAL AGREEMENT C/MS/41 4 January 1994 ON TARIFFS AND TRADE Limited Distribution (94-0018) COUNCIL TRADE POLICY REVIEW MECHANISM SENEGAL Report by the Secretariat In pursuance of the CONTRACTING PARTIES' Decision of 12 April 1989 concerning the Trade Policy Review Mechanism (BISD 36S/403), the Secretariat submits herewith its report on Senegal. The report is drawn up by the Secretariat on its own responsibility. It is based on the information available to the Secretariat and chat provided by Senegal. As required by the Decision, in preparing its report the Secretariat has sought clarification from Senegal on its trade policies and practices. Document C/RM/G/41 contains the report submitted by the Government of Senegal. NOTE TO ALL DELEGATIONS Until further notice, this document is subject to a press embargo. SenegaI C/RM/S/41 ------ -.-PagePageiii..... iii CONTENTS Page SUMMARY OBSERVATIONS vii (1) Senegal in World Trade vii (2) Institutional Framework viii (3) Trade Policy Features and Trends ix (i) Recent evolution ix (ii) Type and incidence of trade policy instruments ix (iii) Temporary measures xi (4) Trade Policies and Foreign Trading Partners xi THE ECONOMIC ENVIRONMENT 1 (1) Major Features of the Senegalese Economy 2 (i) Agriculture 4 (ii) Fisheries 5 (iii) Mining and energy 5 (iv) Manufacturing 6 (v) Tourism 6 (2) Recent Economic Performance 7 (3) Trade Performance 10 (i) Commodity pattern of trade 13 (ii) Regional pattern of trade 15 (4) Outlook 16 C/RM/S/41 TradePolicy Review Mechanism Page :::__ Page II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 19 (1) General Framework 18 (2) Structure of Trade Policy Formulation 19 (i) Executive branches of the Government 19 (ii) Advisory bodies 20 (iii) Review bodies 20 (3) Trade Policy Objectives 21 (i) General trade policy objectives 21 (ii) Sectoral trade policy objectives 21 (iii) Objectives in the Uruguay Round 21 (4) Trade Laws and Regulations 22 (5) Trade Agreements and Arrangements 24 (i) Multilateral agreements 24 (ii) Regional agreements 24 (iii) Bilateral agreements 26 (iv) Other agreements or arrangements 26 XII. TRADE-RELATED ASPECTS OF EXCHANGE AND INVESTMENT POLICIES 27 (1) The Monetary and Exchange Framework 27 (2) Foreign Exchange Allocation 29 (3) Foreign Direct Investment and Trade 30 Senegal C/RM/S/41, IV. TRADE POLICIES AND PRACTICES BY MEASURE 33 (1) Overview 33 (2) Measures Directly Affecting Imports 35 (i) Registration, documentation 35 (ii) Tariffs 36 (iii) Other levies and charges 41 (iv) Customs valuation 43 (v) Minimum import prices 43 (vi) Pre-shipment inspection 43 (vii) Rules of origin 44 (viii) Import prohibitions 44 (ix) Import licensing 45 (x) Import quotas 46 (xi) State-trading 47 (xii) Import cartels 48 (xiii) Countertrade 48 (xiv) Standards and other technical requirements 48 (xv) Government procurement 50 (xvi) Local content requirements 51 (xvii) Anti-dumping, countervailing duty and safeguard actions 51 (xviii) Measures implemented in exporting countries 51 (xix) Free-trade zones, export processing zones 51 (xx) Other measures 52 (3) Measures Directly Affecting Exports 52 (i) Registration, documentation 52 (ii) Export taxes, charges, levies 52 (iii) Minimum prices 52 (iv) Export prohibitions 53 (v) Export licensing 53 (vi) Export quotas 53 (vii) State trading 54 (viii) Export cartels 54 (ix) Voluntary restraints, surveillance and similar measures 54 (x) Export subsidies 54 (xi) Duty and tax concessions 55 (xii) Export finance 55 (xiii) Export insurance and guarantees 55 (xiv) Export promotion, marketing assistance 56 (xv)Free-trade zones, export-processing zones 5 C/RM/S/41 Trade Policy ReviewMechanism Page vi Page (4) Measures Affecting Production and Trade 56 (i) Adjustment assistance 56 (ii) Assistance for research and development 57 (iii) Production subsidies, tax concessions 57 (iv) Pricing and marketing arrangemen 57 (v) State-owned enterprises 59 (vi) Regional assistance 59 (vii) Other measures 60 V. TRADE POLICIES AND PRACTICES BY SECTOR 61 (1) Introduction 61 (2) Agriculture, fisheries, forestry and related industries 61 (i) Crops 62 (ii) Livestock 66 (iii) Beverages 67 (iv) Fish, shellfish and products 67 (v) Forestry 69 (3) Industry 69 (i) Coal, petroleum and natural gas 70 (ii) Ores and metals 71 (iii) Precious stones and precious metals 71 (iv) Row hides and skins, leather and furskins, footwear and travel goods 71 (v) Textiles and clothing 71 (vi) Mineral products and fertilizers 72 (vii) Chemicals 73 (viii) Machinery and equipment 74 (ix) Transport equipment 74 (x) Other products 74 VI. TRADE DISPUTES AND CONSULTATIONS 75 (1) GATT Dispute-Settlement 75 (2) Other Disputes 75 REFERENCES 76 APPENDIX TABLES 79 Senegal C/RM/S/411 Page vii SUMMARY OBSERVATIONS 1. Senegal's participation in the GATT traditional pegging ofSenegal's currency, the datesfrom 1947, as aFrench overseas territory. CFA franc, to the French franc has ruled out In 1958, it became an autonomous member of currency adjustments as a possible option to the French Community and gained full restore price competitiveness. independence in 1960. Three years later, Senegal was admitted as a GATT contracting 5. The primary objective of the New party, with rights and obligations applying Agricultural Policy has been to increase food retroactively from the date of independence. self-sufficiency. Deregulationandrestructuring of the marketing channels for major crops, in 2. Senegal's economicperformance since particular cotton, groundnuts and rice, were independence has been generallypoor, with real designed to increase the rôle ofprivate sector GDP trailingpopulation growth. Expansion in producers and distributors. The authorities have the second half of the 1970s, driven by aimed to reduce the share ofgroundnuts as the exceptionallyfavourable terms oftrade, could dominant cash crop relative to cotton, sugar, not be sustained. GDP per capita, estimated rice, fruits and vegetables. Though Senegal's at US$710 in 1990, has shown substantial trade dependence on the crop has declined fluctuationas itsmain determinant, agricultural markedly, groundnut production remains the production, is closely correlated with weather backbone of its rural economy, providing conditions. employmentfor up to 1 million people. 3. For more than a decade, government 6. Rapidpopulation growthputs the labour policies have been directed towards stabilizing market under considerablestrain. OfSenegal 's the economy, encouraging economic and labour force, estimated at around 3 million financial recovery and structural adjustment. people, no more than 200,000 people are The second half of the 1980s saw the formally employed. Underemployment in introduction of a New Agricultural Policy, a agriculture encourages migration towards the New Industrial .Policy andpublic sector reforms. major cities, compounding urban unemployment, These were complemented by investment in particular in the capital Dakar and incentives, initiatives to restructure the banking surrounding areas. Policy attention appears to sector, liberalization ofcommercial regulations, be shifting towards the large informalsector as including the lifting of price controls and a potential generator of economic expansion. attempts to streamline administrative requirements. (1) Senegal in World Trade 4. The New Industrial Policy sought to 7. With officially recorded imports worth inject dynamism in the manufacturing sector US$1.3 billion and exports of almost through rebalancing a highly distorted system US$900 million, Senegal accounted for of incentives. With a view to reducing and 0.03 per cent of world merchandise trade in harmonizing sectoral protection, Senegal's 1990. The ratio ofmerchandise trade to GDP import régime was substantially liberalized hasfluctuatedbetween 30and 35 per centsince between 1986 and 1988 through tariff 1980. reductions, removal ofprohibitions and licensing requirements, and increases in quota levels. 8. TheEuropean Communities is Senegal 's However, many enterprises remain vulnerable major tradingpartner, accountingforjust over to import competition, hampered by aging 50 per centoftotal imports and exports. Trade equipment, low capacity utilization and Iow links areparticularly close with France, mainly productivity, in particular of labour. The based on exports of traditional Senegalese C/RM/S/41 Trade Policy ReviewMechanism Page viii-i: products (fish, phosphates and groundnuts) in 15 per cent. Petroleum isprocessed in a large return for consumer and investment goods. refinery near Dakar; most of the output is Trade with Italy and Spain expanded currently consumed in the local market. significantly in the 1980s. 13. Senegal's bilateral trade agreements 9. Apart from rice imports from the with 50 countries provide mostly for m.f:n. United StatesandcertainAsian suppliers, some treatment, but duty-free access may be granted of which have in turn become important under the agreements withAlgeria, Morocco and customers phosphatesandmineralfertilizers, Tunisia. Senegal has not signed theAgreement Senegal records little importsfrom, and virtually on the Global System of Trade Preference no exports to, major regions such as the (GSTP) among developing countries, nor does Americas and non-EC Europe. it participate in any international commodity agreements. 10. Senegal 's trade with other countries in sub-Saharan Africa is mostly with members of (2) Institutional Framework theEconomic Community ofWestAfrican States (ECOWAS/in French: CEDEAO) and the West 14. The Constitution of the Republic of African
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