Working Party on the Accession of Liberia - Accession of Liberia

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WT/ACC/SPEC/LBR/4/Rev.1

30 June 2015
(15-3367) Page: 1/145
Working Party on the Accession of Liberia

ACCESSION OF LIBERIA
DRAFT REPORT OF THE WORKING PARTY
ON THE ACCESSION OF LIBERIA
Revision
_______________
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I.  INTRODUCTION ....................................................................................................... 5 
DOCUMENTATION PROVIDED ........................................................................................... 5 
INTRODUCTORY STATEMENTS ......................................................................................... 5 
II.  ECONOMIC POLICIES .............................................................................................. 8 
-  Monetary and fiscal policy ....................................................................................... 8 
-  Foreign exchange and payments ............................................................................. 9 
-  Investment regime ................................................................................................ 11 
-  State ownership, privatization and state-trading entities ..................................... 16 
-  Pricing policies ...................................................................................................... 18 
-  Competition policy ................................................................................................ 19 
III.  FRAMEWORK FOR MAKING AND ENFORCING POLICIES ........................................ 19 
-  Powers of Executive, Legislative and Judicial Branches of Government ................ 19 
-  Government entities responsible for making and implementing policies
affecting foreign trade; Right of Appeal ................................................................ 22 
-  Division of authority between central and sub-central governments .................... 24 
IV.  POLICIES AFFECTING TRADE IN GOODS ............................................................... 25 
-  Registration requirements for import/export operations; Trading rights .............. 25 
A.  IMPORT REGULATIONS ......................................................................................... 29 
-  Ordinary customs duties, customs tariff ................................................................ 29 
-  Other duties and charges ...................................................................................... 32 
-  Tariff rate quotas, tariff exemptions ..................................................................... 32 
-  Fees and charges for services rendered ................................................................ 35 
-  Application of internal taxes to imports ................................................................ 36 
-  Quantitative import restrictions, including prohibitions, quotas and
licensing systems .................................................................................................. 38 
-  Customs valuation ................................................................................................. 44 
-  Rules of origin ....................................................................................................... 45 
-  Other customs formalities ..................................................................................... 46 
-  Preshipment inspection ......................................................................................... 51 
-  Anti-dumping, countervailing duties, safeguard regimes ...................................... 53 
B.  EXPORT REGULATIONS ......................................................................................... 56 
-  Customs tariffs, fees and charges for services rendered, application of
internal taxes to exports ....................................................................................... 56 
-  Export restrictions ................................................................................................ 56 
-  Export subsidies .................................................................................................... 58 
C.  INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS ............................... 59 
-  Industrial policy, including subsidies .................................................................... 59 
-  Technical barriers to trade, standards and certification ........................................ 60 
-  Sanitary and phytosanitary measures ................................................................... 63 
-  Trade-related investment measures ...................................................................... 70
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-  Free zones, special economic areas ....................................................................... 71 
-  Government procurement ..................................................................................... 73 
-  Transit ................................................................................................................... 74 
-  Agricultural policies .............................................................................................. 74 
(a)  Imports ................................................................................................................. 75 
(b)  Exports .................................................................................................................. 76 
(c)  Internal policies .................................................................................................... 76 
V.  TRADE-RELATED INTELLECTUAL PROPERTY REGIME ............................................. 76 
-  GENERAL ............................................................................................................... 76 
-  Industrial property protection ............................................................................... 77 
-  Responsible agencies for policy formulation and implementation ......................... 77 
-  Participation in international intellectual property agreements ............................ 78 
-  Application of national and MFN treatment to foreign nationals ............................ 79 
-  Fees and taxes ...................................................................................................... 79 
-  SUBSTANTIVE STANDARDS OF PROTECTION, INCLUDING PROCEDURES
FOR THE ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY
RIGHTS ................................................................................................................. 79 
-  Copyright and related rights ................................................................................. 79 
-  Trademarks, including service marks .................................................................... 81 
-  Geographical indications, including appellations of origin ..................................... 81 
-  Industrial designs ................................................................................................. 83 
-  Patents .................................................................................................................. 83 
-  Plant variety protection ......................................................................................... 83 
-  Layout designs of integrated circuits .................................................................... 83 
-  Requirements on undisclosed information, including trade secrets and test
data ....................................................................................................................... 84 
-  MEASURES TO CONTROL ABUSE OF INTELLECTUAL PROPERTY RIGHTS ................ 84 
-  ENFORCEMENT ...................................................................................................... 84 
-  Civil judicial procedures and remedies .................................................................. 85 
-  Provisional measures ............................................................................................ 85 
-  Administrative procedures and remedies .............................................................. 85 
-  Special border measures ....................................................................................... 86 
-  Criminal procedures .............................................................................................. 86 
VI.  POLICIES AFFECTING TRADE IN SERVICES ........................................................... 86 
VII.  TRANSPARENCY .................................................................................................... 88 
-  Publication of information on trade ....................................................................... 88 
-  Notifications .......................................................................................................... 90 
VIII. TRADE AGREEMENTS ............................................................................................. 90 
CONCLUSIONS ............................................................................................................... 91 
ANNEX 1 ........................................................................................................................ 92 
ANNEX 2 ........................................................................................................................ 95
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ANNEX 3 ........................................................................................................................ 96 
ANNEX 4(A) ................................................................................................................... 97 
Annex 4(B) .................................................................................................................... 98 
ANNEX 4(C) ................................................................................................................... 99 
ANNEX 5 ...................................................................................................................... 100 
ANNEX 6 ...................................................................................................................... 102 
ANNEX 7 ...................................................................................................................... 103 
ANNEX 8 ...................................................................................................................... 105 
ANNEX 9 ...................................................................................................................... 106 
ANNEX 10..................................................................................................................... 107 
ANNEX 11..................................................................................................................... 108 
ANNEX 12..................................................................................................................... 109 
ANNEX 13(A) ............................................................................................................... 110 
ANNEX 13(B) ............................................................................................................... 111 
ANNEX 13(C) ............................................................................................................... 117 
ANNEX 13(D) ............................................................................................................... 123 
ANNEX 13(E) ................................................................................................................ 126 
ANNEX 13(F) ................................................................................................................ 130 
ANNEX 14..................................................................................................................... 132 
ANNEX 15..................................................................................................................... 133 
ANNEX 16..................................................................................................................... 134 
ANNEX 17..................................................................................................................... 135 
ANNEX 18..................................................................................................................... 136 
ANNEX 19..................................................................................................................... 137 
ANNEX 20..................................................................................................................... 138 
ANNEX 21..................................................................................................................... 139 
ANNEX 22..................................................................................................................... 140 
ANNEX 23..................................................................................................................... 141 
APPENDIX .................................................................................................................... 142
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I. INTRODUCTION
1. The Government of the Republic of Liberia applied for accession to the World Trade
Organization in June 2007. At its meeting on 18 December 2007, the General Council established
a Working Party to examine the application of the Government of Liberia to accede to the World
Trade Organization (WTO) under Article XII of the Marrakesh Agreement establishing the
WTO. The terms of reference and the membership of the Working Party are reproduced in
document WT/ACC/LBR/2/Rev.6.
2. The Working Party met on 11 July 2012, [XXX], and [XXX] under the Chairmanship
of H.E. Mr. Joakim Reiter (Sweden).
DOCUMENTATION PROVIDED
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum
on the Foreign Trade Regime of Liberia (WT/ACC/LBR/3), the questions submitted by Members on
the foreign trade regime of Liberia, together with the replies thereto, and other information
provided by the authorities of Liberia (WT/ACC/LBR/4; WT/ACC/LBR/5; WT/ACC/LBR/6;
WT/ACC/LBR/7 and Addendum 1; WT/ACC/LBR/8 and Addendum 1; WT/ACC/LBR/9;
WT/ACC/LBR/10; WT/ACC/LBR/11; WT/ACC/LBR/12; WT/ACC/LBR/13; WT/ACC/LBR/14 and,
[XXX]), including the legislative texts and other documentation listed in Annex 1 to this Report.
INTRODUCTORY STATEMENTS
4. The representative of Liberia said that despite the political upheavals and civil war (1980-
2003) that destroyed Liberia's economy and brought a steep decline in living standards for its
population, Liberia was once again on the road to economic recovery. An elected government
under the leadership of President Ellen Johnson Sirleaf had been sworn into office in January 2006,
and set about to implement numerous reforms to re-activate the economy, to re-introduce Liberia
into the international community and economy, and to help Liberia re-integrate into global value
chains. Since 2006, Liberia had shown a strong commitment to implementing the sound reforms
and maintaining the macroeconomic stability necessary for accelerated and sustainable economic
growth. Liberia was a small open economy based on natural resource development, and it was
recognized that future growth and ability to reduce poverty lied in increasing Liberian trade with
the rest of the world. Liberia needed investment capital and upgraded technology, so it was
critical that economic policies focus on attracting investors while trying to stimulate the
development of local business.
5. The three-year "Lift Liberia" Poverty Reduction Strategy (PRS), introduced in 2008, had
articulated the Government's overall vision and major strategies for moving toward rapid, inclusive
and sustainable growth and development based on efforts in four keys areas: Consolidating Peace
and Security; Revitalizing the Economy; Strengthening Governance and the Rule of Law; and
Rehabilitating Infrastructure and Providing Basic Services. Key elements and sub-strategies
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included controlling corruption, creating conditions conducive to human and business
development, and foreign direct investment, improving land rights and access, and completing the
development of a WTO-based trade policy. For example, the PRS Strategy for Economic
Revitalization had promoted measures to restore major commodity exports such as rubber, timber,
iron-ore mining, and other cash crops. In the case of rubber and cash crops, the World Bank had
approved a Tree Crop Rehabilitation Project for small scale farmers involved in rubber as well as
other cash crops. And, under an agreement with the Government of Liberia, Buchanan
Renewables had assisted farmers to cut down old rubber trees and replant. In the case of timber,
efforts such as dredging of the ports of Buchanan and Greenville would make it possible to resume
the export of timber.
6. The representative of Liberia added that during the "Lift Liberia" PRS, in 2008-2011, nearly
2,500 kilometers of paved and laterite roads had been reconstructed or rehabilitated; electrical
generation capacity had increased from practically zero to 23 megawatt (MW); 48 kilometers of
power transmission and distribution lines had been constructed or renewed; and implementation
had begun on the regional West Africa Power Pool (WAPP) cross-border electrification project.
To revive traditional economic sectors, Liberia had attracted leading global firms that had begun to
reinvest in forestry, rubber, and mining. As a result, exports had increased from US$175 million in
2006 to US$295.2 million in 2011. Liberia had attracted foreign direct investment (FDI) in several
non-traditional sectors including petroleum, oil palm, hotels, finance, industry, and infrastructure.
7. However, these investments were not sufficient to diversify the Liberian economy, nor
create enough jobs. Therefore, the Government had prioritized to achieve a stable macroeconomic
environment, which was necessary for growth. It had worked out a plan to establish a competitive
business environment in Liberia through the reform of the Tax and Investment Codes, and had
streamlined business registration processes. Further, it had moved toward multi-year financial
planning and cash-based balanced budget. Efforts had been focused on improving governance,
strengthening justice, and restoring confidence in the rule of law. During the PRS period, the
Government had created the Liberia Anti-Corruption Commission (LACC), the Public Procurement
and Concession Commission (PPCC), and the Liberia Extractive Industries Transparency
Initiative (LEITI). To make government institutions more transparent and capable, the
Government of Liberia had set a Civil Service Reform Strategy, which had rationalized the
functions and mandates of ministries and agencies.
8. He added that, although the "Lift Liberia" PRS had made great strides toward recovery, it,
however, had not meet all of its goals due to the country's institutional and human capacity
deficits. Hence, the Agenda for Transformation (AFT) had been introduced in 2012. The AFT was a
five-year development strategy which followed "Lift Liberia" PRS while placing greater focus on
interventions to target the most pressing problems. The AFT was not supposed to deliver
transformation by the end of five years but rather was the first step toward achieving the goals set
out in Vision 2030 (Liberia's long-term vision of socio-economic transformation and development).
The main goals of Vision 2030, inscribed in the AFT, were to ensure that Liberia achieves middle-
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income status by 2030. The flagship projects of the programme were: (i) to promote and sustain
private sector development through enhanced economic competitiveness and diversification,
increased value addition and an improved administrative and policy environment; (ii) to maintain
fiscal, monetary, trade and exchange rate policies that entrench macroeconomic stability and
support efficient public expenditure management, expand inclusive private-sector growth and job
creation; (iii) to increase access to renewable energy services and affordable power, improve
accessibility and connectivity of roads and bridges, ensure reliable, safe, affordable and efficient
transport services, facilitate access, transparency and reliability of low-cost postal, telecom and
ICT services nationwide, expand access to affordable housing for low-income household, rebuild
and rehab public and community building and household-level infrastructure; (iv) to promote a
robust, competitive and modernized agriculture sector supportive of sustainable economic growth
and development; (v) to integrate community, conservation and commercial aspects of forestry to
sustainably contribute to reducing poverty, improving livelihoods and quality of rural life, and
increasing the ecological services provided by forests; and, (vi) to promote a sustainable,
transparent, and well-managed exploitation of mineral resources and an equitable distribution of
benefits among citizens.
9. The representative of Liberia also informed that currently, the country's main imports were
food and live animals, machinery and transport equipment, manufactured goods and petroleum
products. In 2013, Liberia's total merchandise trade (on an FOB basis) had grown by 15.4%
to US$1,754.6 million, from US$1,520.8 million recorded in 2012; exports and imports had
accounted for 31.0% and 69.0%, respectively; raising from 29.2% and 70.8% in 2012,
respectively. Total merchandise export receipts had risen by 22.3% to US$543.7 million in 2013,
from US$444.4 million earned in 2012, largely on account of a 180% rise in iron ore export
receipts (to US$327.8 million in 2013, from US$117 million in 2012). The significant rise in iron
ore export earnings in 2013 had been driven mainly by increased domestic production and export
volumes, despite the declining global price pattern of the commodity in this year. Iron ore and
rubber accounted for 82.5% of total export earnings in 2013, as compared to 66.2% in 2012
and 67.6% in 2011.
10. Liberia's application to join the WTO was an important step toward re-engaging the
multilateral trade policy community after many years of disruption. Liberia looked forward to
participating in the forum most responsible for establishing and policing the rules for international
trade. In view of the Guidelines established by the WTO General Council on LDCs and Accession
(WT/L/508 and Add.1), and bearing in mind Liberia's status as an LDC, the representative of
Liberia called on Members of the Working Party to expedite and be flexible in the negotiations to
establish Liberia's WTO commitments and to extend special and differential treatment as foreseen
in the provisions of the WTO Agreements regarding LDCs. Technical assistance and/or transition
periods were needed to implement some WTO commitments. In this regard, Liberia sought
support in the areas of Fees and charges for services rendered, Pre-shipment Inspection, Customs
tariffs, fees and charges for services rendered, application of internal taxes to exports, Technical
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Barriers to Trade, Sanitary and Phytosanitary Measures, Trade-related investment measures, and
Trade-Related Intellectual Property Regime.
11. Members of the WTO welcomed Liberia's application to join the Organization, appreciating
the efforts already undertaken by Liberia to achieve compliance with WTO rules and principles and
to provide market access offers and comprehensive documentation on its trade regime at an early
stage of the process. Members noted that, although further work was needed, it was clear that
Liberia would benefit from the WTO accession process, and from the full implementation of WTO
provisions and market access commitments that would create a good economic climate for
investment, growth, and development. In this regard, Members pledged to work constructively
with Liberia. Some Members indicated that they had, and would, continue to offer technical
assistance to facilitate Liberia's accession. Members looked forward to Liberia's early accession on
appropriate terms. Some Members referred to Liberia's current status as a least-developed
country, and in keeping with the guidelines on LDCs' accessions, would consider this a relevant
factor in establishing Liberia's terms of accession.
12. The Working Party reviewed the economic policies and foreign trade regime of Liberia and
the possible terms of a draft Protocol of Accession to the WTO. The views expressed by Members
of the Working Party on the various aspects of Liberia's foreign trade regime, and on the terms
and conditions of Liberia's accession to the WTO, are summarized below in paragraphs 13 to 325.
II. ECONOMIC POLICIES
- Monetary and fiscal policy
13. The representative of Liberia said that his country operated a dual currency arrangement,
where both US and Liberian dollars were accepted as legal tender. Currently, US dollars still
comprised a significant portion of the "official" broad money supply, not counting US dollar
currency in circulation outside the banks, which was not measured. Despite ongoing efforts to
encourage use of the Liberian dollar, most large public and private sector transactions were
conducted in US dollars with significant amounts of savings at commercial banks held
in US dollars.
14. The supply of US dollars came primarily from exports, remittances, and inflows of foreign
assistance; the demand for US dollars was determined mostly by the demand for imports.
The supply of Liberian dollars arose mostly from government payments of salaries and for goods
and services. The net demand for Liberian dollars was primarily for tax payments and as a
medium of exchange in smaller denominations. The demand for money (both US dollars and
Liberian dollars) had been expanding rapidly in the post-crisis era, and there had been concern
regarding the ability of the Central Bank of Liberia (CBL) to control inflation.
15. The conduct of monetary policy in Liberia was generally geared towards containing
exchange rate fluctuations and ensuring low inflation. A weekly foreign exchange auction was the
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key mechanism used by the CBL to affect domestic monetary conditions. In 2009, the CBL had
intensified its intervention in the foreign exchange market, to ease the pressure on the exchange
rate of the Liberian dollar. The CBL had intervened in the foreign exchange market through the
weekly foreign exchange auctions to smoothen excessive exchange rate fluctuations.
In May 2013, to broaden the policy instruments available to the CBL for monetary policy
management, the CBL had first introduced the Treasury bill (T-bill), to manage excess liquidity of
US dollars in the economy. Since then, the T-bills had been conducted every month.
The introduction of T-bills by the CBL kept inflation to low single digits through a stable
Liberian-US dollar exchange rate. The net foreign reserves position of the Central Bank of Liberia
(CBL) at end-December 2013 had been US$262.73 million, compared with US$238.97 million at
the end of 2012.
16. Liberian monetary authorities had been severely limited in their ability to conduct an
independent monetary policy with respect to the Liberian dollar. This was due, first and foremost,
to the dual currency arrangement and the predominance of the US dollar over which it had no
control. In addition, there was no open market for government securities since those previously
issued had been discredited and no new securities had been issued more recently. The only policy
instrument that could be used to influence prices was the exchange rate, and Liberia lacked the
reserves to materially affect it through that market.
17. Liberia's fiscal stability had depended heavily on domestic and international trade for its
revenue, with customs and excise taxes accounting for 49% of the total in fiscal year of
2006/2007, 36% in 2009/2010 and, 30% in 2013/2014. In this period, Liberia had made a strong
commitment to enhancing revenue collection efficiency as well as broadening the tax base.
This had contributed to rise in revenues with some decline during the economic crisis
in 2008-2009. Reform measures had included stronger enforcement of customs administration,
use of pre-shipment inspection of imports, reduction of the Customs User Fee, strengthening tax
collections from large taxpayers, eliminating the settlement of tax liabilities through non-cash
payments, and reducing tax and duty exemptions on imports of rice and petroleum products.
Other measures included more consistent implementation of the revenue code, expansion of
automated tax administration, improved auditing resulting from comparing different sources of
taxpayer information, and taxpayer education.
- Foreign exchange and payments
18. The representative of Liberia informed that the Liberian dollar exchange rate had come
under enormous pressure during most of 2009, due mainly to the global financial crisis,
depreciating to L$72.44/US$1.00 at end-September, from L$64.93/US$1.00 at end-January 2009.
The weakening of the Liberian dollar against the US currency could be generally ascribed to the
slowdown in the rate of workers' remittances, declines in export earnings, and higher market
demand for US dollars. The Central Bank of Liberia (CBL) had been taking steps to ease the
volatility in the exchange rate by intensifying its intervention in the foreign exchange market
through increased sale of US dollars to the market. As a result, the Liberian dollar had regained
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almost all of the value lost in 2009, strengthening it from L$72.44 to around L$67 per US dollar as
of December 2009. The average exchange rate between the Liberian and the US dollars had
depreciated by 1.8%, to L$73.51/US$1.00 in 2012, compared with L$72.23/US$1.00 for 2011 as a
result of rising demand for foreign exchange during the year, caused by higher growth in business
activity. The current Liberian dollar exchange rate was L$85 per US dollar.
19. The depreciation of the exchange rate had contributed to an elevated inflation since 2009,
although inflation had dropped to the single-digit range in 2013 (7%), from a high double digit for
most of 2008. Inflation had remained relatively low, compared with the average of prevailing in
other countries in West Africa. The government of Liberia continued to study the option of moving
to a complete US dollar standard at the same time efforts were being made to decrease the
importance of US dollars in the economy relative to Liberian dollars. The choice made would have
an important influence on Liberia's competitiveness in the global, and even regional, economy.
20. Liberia's current account deficit continued to increase. The deficit, which had stood at
below 10.0% of GDP in 2005, had risen sharply to 20.5% of GDP in 2007. The increase in the
deficit had derived exclusively from the trade deficit, which continued to grow as a result of the
larger share of imports in the economy. For similar reasons, the current account deficit
had increased further in 2008. On the other hand, Liberia's capital account deficit had started
to improve since 2005 with the re-emergence of private investment and foreign
direct investment (FDI). The current account deficit had risen by 13.2% to US$1,288.00 million
for the end of 2013, from US$1,137.3 million for the end of 2012. This had been due to a 5.6%
deterioration in the trade deficit to US$667.3 million in 2013 from US$632.00 million in 2012.
The widening period in the trade deficit in 2013 had been on account of a 12.5%
(US$134.5 million) rise in import payments that had outpaced a 22.3% (US$99.3 million) growth
in export receipts recorded in 2013. The 38% decline in current transfers, resulting mainly from
an 89.3% fall in workers' remittances, had also contributed to the deterioration in the current
account deficit. The current account deficit as a percentage of GDP had averaged 65.2% in 2013,
compared to 65.5% and 64.7% in 2012 and 2011, respectively.
21. Liberia had successfully implemented two Staff-Monitored Programmes of the International
Monetary Fund (IMF) under which it had made significant improvements in public finances and in
monetary and exchange rate polices, paving the way to full restoration of normalized relations with
the IMF in March 2008. The Government had also made strong initial progress in dealing with its
debt situation. It had formulated and begun implementation of a comprehensive domestic debt
resolution strategy, had cleared its long-standing arrears to the World Bank, the African
Development Bank, and the IMF, had signed a new three-year agreement with the IMF, and had
reached the Decision Point under the Heavily Indebted Poor Countries' (HIPC) Initiative. In 2009,
the bilateral relations between the CBL and international institutions had continued to grow in
strength with mutual commitment towards the achievement of the goal of the 2009 Programme
agreed with the IMF. In this spirit, the IMF had completed the third appraisal of Liberia's
performance in the implementation of its Economic and Financial Programme supported by the