This second Trade Policy Review of Tunisia has enlightened us on the country's economic and trade performance since the first review in 1994. Our discussions were facilitated by the active and open participation of the Tunisian delegation, headed by H.E. Minister Mondher Zenaidi, by the discerning comments of the discussant, and by the inspiring statements of Members.

Members congratulated Tunisia on its good economic performance and its progress in improving its standard of living, achieved largely thanks to its macroeconomic reforms over the past decade. Several Members enquired about the regional and bilateral agreements concluded by Tunisia and about the role of trade policy and the multilateral trading system in its strategy of sustainable development and reduction of unemployment. In view of Tunisia's economic regulation, Members felt that in order to stimulate the economy and reduce unemployment, there was a need for further reforms aimed at liberalizing the trade and foreign exchange regimes, eliminating the dualism between the export sector and the domestic sector, and reducing the presence of the State.

Some Members congratulated Tunisia on its recent efforts in the area of trade facilitation and dismantling of quantitative import restrictions. However, customs clearance procedures remained slow and technical inspections complex. A number of Members invited Tunisia to improve its multilateral tariff bindings while reducing its applied MFN tariffs (32 per cent on average, and 67 per cent for agricultural products), some of which exceeded the bindings. There was also mention of the need to rationalize the numerous incentives (including investment, production and, in particular, export incentives) as well as the high internal taxes.

Tunisia was asked to clarify the prospects for diversification of the manufacturing sector in view of the growing competition in the leading export sector, textiles and clothing. Certain Members felt that if Tunisia were to open up its services sector (telecommunications, and postal and financial services), for example by strengthening its commitments under the GATS, the economy would be more attractive to foreign investors and the country would be in a better position to exploit its comparative advantages in sectors such as tourism, business services, and health and wellness services. Tunisia was also asked to clarify its local content measures (pharmaceutical and automotive industries), the revision of the 1955 Customs Code, government procurement, and the protection of intellectual property.

Members welcomed the Tunisian delegation's in-depth replies to the different questions.

In conclusion, this meeting brought to light the economic reforms introduced by Tunisia and provided an opportunity to discuss further reforms that could help it to deregulate its economy in general and to rationalize its trade regime in particular. Broader trade reform should enable Tunisia to adhere more closely to the principles of the WTO, to overcome the dualism within its economy, and to exploit its comparative advantages more effectively. Coupled with reduced State involvement in economic activities, these reforms would lower production costs and revitalize the Tunisian economy. Moreover, an improvement in its multilateral commitments would help to make its trade regime more transparent and predictable. I call upon Members to support Tunisia in this effort by guaranteeing improved access to their markets.