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WTO Trade Policy Review of Maldives
October 26, 2009

U.S. Statement by David P. Shark, Chargé d’Affaires, a.i.

Thank you, Chair.

The United States warmly welcomes the delegation from Malé, led by Deputy Minister of Economic Development Ahmed Inaz to this, the second Trade Policy Review of Maldives. Much has transpired since Maldives’ 2003 TPR, both globally and domestically. The United States appreciates the Secretariat’s and the government’s work in documenting the changes that have taken place since Maldives’ first TPR. We compliment you for providing WTO Members with a more complete picture of Maldivian policies affecting trade, and we look forward to learning more about them during the next several days. We would also like to thank Ambassador Dennis Francis for acting as discussant and for providing his insights to ensure a meaningful context for this review.

Albert Einstein once said, “In the middle of difficulty lies opportunity.” The Maldivian experience in the face of adversity shows the wisdom of these words. Since the 2003 TPR– indeed, in less than a decade, the Maldives has overcome a devastating natural disaster, accomplished a successful government transition, and firmly set a path towards economic liberalization. Maldives has a small, yet growing market that is receptive, both politically and statutorily, to foreign investment, and trade in goods and services.

Maintaining an average seven percent growth rate, including during the aftermath of the tsunami, is no small feat. The current economic downturn has negatively affected most of the world economy, and Maldives is no exception. Nonetheless, many of the economic liberalization programs the government is working on – or plans to undertake – will have a lasting impact on Maldives’ economic recovery efforts. We commend the government for its commitment to privatization and encourage you to accelerate the process. Not only will privatization help increase efficiency and promote transparency, but it will also help shepherd the kind of investment necessary for Maldives to upgrade physical infrastructure, develop a financial market, create opportunities for small and medium enterprises, and enhance the economic potential for all Maldivians. And, we are pleased that the Maldives government has chosen to join the International Labor Organization and has begun to reform the nation’s labor laws so that they are in line with international standards.

The United States values its friendship with Maldives. The government of Maldives has been a partner in the pursuit of international security and other critical issues, such as environment and climate change, regional integration, and democratic institutions. The United States is proud to have taken our bilateral trade relationship with Maldives to the next level. Just two weeks ago, on October 17, our two governments signed a Trade and Investment Framework Agreement that will serve as a foundation for this aspect of our bilateral engagement and provide a forum for the Maldives and the United States to examine ways to enhance bilateral trade and investment. Our hope is that the TIFA will help support the trade opening policies that the government of Maldives is undertaking to boost investment, employment, per capita income, and prosperity for all Maldivians.

Maldives continued commitment to diversification is key to the nation’s economic growth and development. We recognize the challenges that Maldives will continue to face as it makes the transition along the road to economic prosperity. For this reason, the United States has chosen to review the Maldives’ request to be reinstated in our Generalized System of Preferences (GSP) program.

The United States remains mindful of the Maldives efforts to upgrade its trade policy regime as characterized in the government’s report for this meeting. Specifically, we support the government’s efforts to reduce its dependence on import duties as the primary revenue generator. Pursuing a broad-base taxation system in conjunction with plans to develop a financial market will establish a diverse portfolio of revenue-generating schemes that will boost government earnings and help achieve poverty-alleviation. As the government prepares to implement new taxation laws, we urge Maldives’ policymakers to pay heed to the effects that new undertakings could have on trade and investment. Furthermore, we encourage the government to address what the Secretariat, in its report, characterized as an “unduly complex” tariff structure. Simplifying the tariff bands will facilitate trade. And we urge Maldives to lower tariffs, particularly on line items where the applied rates exceed the WTO-bound rates. Such action would help ease the financial burden on Maldives’ consumers as they, too, recover from the economic downturn.

We are also aware of the government’s efforts to establish a customs valuation database (about which we hope to learn more in the course of this review), improve transparency in government procurement, introduce quality control mechanisms on exports, and develop laws to protect intellectual property rights. The United States stands ready to work with Maldives as your government develops IP laws to ensure that they are TRIPs-consistent. As part of the TPR process, the United States has submitted questions to the Maldives regarding actions such as these in an effort to help the Maldives pursue economic advancement, and we look forward to considering your responses.

The United States acknowledges the tests facing the Maldives because of its island-nation topography. In particular, we heard President Nasheed’s call for people to realize that the Maldives is a “frontline state” whose very existence is threatened by climate change. Who could doubt President Nasheed’s commitment to making Maldives the first carbon-neutral country by 2020 when he, along with the vice president, and a number of cabinet ministers took their seats at a table on the ocean floor, held a meeting, and signed a document calling on all countries to cut their carbon dioxide emissions? Environmental degradation threatens the health and welfare of the global population and we commend the Maldives for its creativity in gaining worldwide public attention to this pressing issue.

The United States continues to believe that the Doha Round negotiations will set the terms of trade for decades to come. Furthermore, the Round presents an unprecedented opportunity to address concretely the global environmental challenge of climate change and energy security through increased global trade in and use of environmental goods and services. The Secretariat advises that Maldives wants a “quick and positive” outcome of the Doha Round, especially with regard to technical assistance and the “aid for trade initiative”. The United States welcomes Maldives enthusiasm and notes that a successful outcome can be achieved – but completion of the Round depends on all Members’ efforts.

Thank you for your attention, and we look forward to learning more about Maldives trade policy regime. The United States offers best wishes to the Maldives for a successful Trade Policy Review.

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