WTO TRADE POLICY REVIEW OF CAMEROON
Statement by U.S. Ambassador Linnet Deily
July 18, 2001

Opening Remarks:

The United States welcomes the delegation from Yaounde for Cameroon's Second Trade Policy Review. We appreciate the Secretariat's thorough report on Cameroon's trade policy regime. We also appreciate the Government's report. These reports can be useful, not only in understanding and improving trade policy formulation but also in furthering coordination of trade-related activities throughout the Government, moreover, these reports represent an important analysis of Cameroon's commercial policies, laws, regulations and practices. We have developed a number of questions based on those reports. We look forward to receiving answers from the Government of Cameroon and discussing in detail Cameroon's record as well as possible future progress in trade and investment liberalization.

The United States and Cameroon's commercial relationship is solid and growing rapidly. U.S. imports from Cameroon doubled from $77 million in 1999 to $155 million in 2000. At the same time United States exports increased from $37 million in 1999 to $59 million in 2000. The stock of U.S. Investment in Cameroon rose from $180 million in 1999 to more than $240 million in 2000. In addition the $3.5 billion Chad-Cameroon pipeline presently under construction will, when completed, represent the largest U.S. single investment in sub-Saharan Africa.

The United States and Cameroon have good relations and the U.S. supports efforts to increase Cameroon's trade and enhance its development. The U.S. and Cameroon have a strong Bilateral Investment Treaty.

The United States is committed to encouraging Cameroon' s further development through increased trade. This is demonstrated by Cameroon's eligibility as a beneficiary country under the African Growth and Opportunity Act (AGOA).

The U.S. government also finances bilateral aid projects in Cameroon valued at approximately 5 million U.S. dollar each year. USAID provides funding for family health and AIDS prevention and also for rainforest conservation through the Central African Regional Program for the Environment (CARPE).

Cameroon's economy has now registered five consecutive years of real economic growth averaging 4-5 percent annually. Cameroon has the largest and most diversified economy in the six-nation Central African Economic and Monetary Community (CEMAC). Inflation is now down to 2 percent and fiscal deficits have been low. In collaboration with the IMF and the World Bank it has undertaken economic reform measures completing a three-year, structural adjustment program, initiating significant reforms to secure HIPC debt relief and beginning the privatization of several large parastatal enterprises. The government has liberalized some aspects of the trade and investment climate, notably allowing greater foreign investment in previously closed sectors.

Since its last Trade Policy Review Cameroon has taken a number of liberalizing measures including the simplification of the taxation scheme, improvement in the transparency of the legal system, and a revival of regional integrationist measures with CEMAC. Cameroon efforts on privatization and structural reform are indeed truly commendable as these reforms have helped modernize the economy and increase Cameroon's exports.

Cameroon and the WTO

Mr. Chairman, the United States and Cameroon both share a commitment to strengthening the multilateral trading system through the WTO.

Turning to the built-in agenda negotiations, we welcome the active participation of Cameroon in the GATS negotiations. Cameroon's liberalization of its services sector has been an important step in its efforts to modernize its economy. However we note that most of these reform measures are not yet bound under GATS. We also hope that Cameroon will expand its commitments in general and specifically take measures to further liberalize its basic telecommunications sector. By binding these commitments in its schedule Cameroon would send a strong signal to potential investors about its resolve and commitment to a stable open economy.

We would welcome further information on Cameroon's National Technical Committee to monitor the WTO agreement and urge the Government to increase its efforts further to increase notifications through improved coordination and interaction among the various ministries, technical and private-sector institutions.

On going matters of concern

On market access we note with concern that Cameroon has only bound 15 percent of its tariff lines. Binding tariffs creates a more stable investing climate by assuring potential investors that tariffs will stay within a specified range. This lowers their risks and allows them to plan long-term investments. The United States is also concerned that Cameroon's average applied MFN tariff was 18.3 percent in 2000. High tariff levels discourage international trade and investment while distorting the free flow of goods. The United States is pleased that Cameroon has bound all of its agricultural tariff lines, however, we do note that the ceiling rate of 80 percent is substantially higher than applied levels and would urge Cameroon to lower it to maintain consumer predictability. As the report stated, Cameroon must, "create confidence in the irreversibility of its reforms and render them more credible." This is the key for the future of Cameroon's trade and investment since real credibility is the greatest comparative advantage any country can have.

We look forward to hearing about Cameroon's progress in the implementation of the Agreement on Customs Valuation.

The United States recognizes that Douala is one of the busiest and most important ports in all of Africa. We also commend Cameroon for the measures it has taken to improve the customs administration and to decrease the clearance time for goods at the port. However we are still concerned about the continuing delays and high costs of the customs procedures in Douala which is an impediment to increased trade and investment in Cameroon.

We welcome Cameroon's commitment to increasing transparency in the legal system. A lack of transparency in the legal system impedes development by increasing the cost of doing business while lowering predictability. We urge Cameroon to continue its efforts to promote transparency throughout its economy.

The economy of Cameroon is one of the most diverse in sub-Saharan Africa and we appreciate its efforts to increase diversity while balancing environmental interests in the forestry sector. We recognize the steps Cameroon has taken to privatize many of its parastatals yet we encourage it to continue with its efforts, especially in the telecommunications sector. Continued privatization helps increase efficiency and provides much needed funds for Cameroon to invest in its development through increased health and education budgets.

Conclusion

Since its last Trade Policy Review Cameroon has made continual efforts to liberalizing its economy and promoting increased trade. The authorities have been committed to creating a more stable, efficient, and competitive system that will enhance Cameroon's effectiveness in the global economy. However more does need to be done, especially on increasing transparency. We look forward to the discussion in this review and to continue to work with Cameroon in support of their efforts to increase trade and investment.