Trade Policy

Since independence, Tunisia has pursued economic growth and political and social stability through early and consistent investments in family planning, education, infrastructure, and promotion of the status of women. According to 1999 government figures, approximately 80 percent of Tunisian households own their own homes, and electricity is supplied to 94.6 percent of the population. The Tunisian government also has undertaken ambitious infrastructure development projects to address growing needs in roads, energy, telecommunications, and waste management.

After a lengthy period of post-independence socialist economic policies, Tunisia began in 1986 a series of important structural reforms to create a market economy with the support of the International Monetary Fund (IMF) and the World Bank. The government simplified its tax system and reduced taxes, with a fixed maximum business rate of 35 percent. Banking and financial sectors were partly liberalized and restructured. Some public companies were wholly or partially privatized and foreign trade and domestic prices decontrolled. As of 1998, 87 percent of prices were deregulated at the production level and 85 percent at the distribution level. 97 percent of imports do not require prior licensing, although maximum tariff rates on a broad range of imports rose from 43 to 230 percent in July 1996 where they remain. The Tunisian government also uses a wide range of non-tariff barriers to block imports, particularly for non-capital items.

Tunisia's implementation of the association agreement with the EU (signed in 1995) should, over the next nine years, lead to the elimination of tariffs and other trade barriers on a wide range of goods and services traded with the eu. Tunisian commitments in other international fora, including the World Trade Organization (WTO), are designed to relax some of the restrictions on foreign participation in the information, telecommunications, and financial services industries. Tariffs on trade with the EU have already begun to decline; we expect action to implement the WTO commitments in the 1999-2003 time frame when significant liberalization in the telecom sector is required, along with the implementation of intellectual property rights legislation, which meets WTO trips minimum standards.