Trade Policy Framework: Tunisia - Implications of Participation in the Information Technology Agreement of the World Trade Organization

This study was undertaken upon the request of the Government of Tunisia to assist the country in evaluating whether it should become a participant in the Information Technology Agreement of the World Trade Organization.

Tunisia, a developing country, became a member of the WTO in March 1995, but has not become a participant in the ITA since its conclusion in 1996.

The Government requested UNCTAD to examine in particular the impacts of becoming a participant in the ITA in terms of the overall objective of the Government to attract greater foreign direct investment (FDI) into the country, in particular the IT sector, thereby boosting domestic industrial output and exports of IT and IT-related products.

Scope of this study

1. The revenue effects of eliminating import tariffs on all IT products under the product coverage of the ITA. [The study does not include the cost of having to bind other duties and charges at zero, which is one of the three basic principles of the ITA.]

2. Whether becoming a participant in the ITA will contribute towards achieving the overall objective of the Government to attract greater FDI into the country, in particular the IT sector, through elimination of import tariffs on all IT products and binding other duties and charges at zero for those products that fall under the product coverage of the ITA.

3. The economy-wide implications of becoming a participant in the ITA, through a linkage analysis to gauge whether establishment of an IT sector in Tunisia might have strong backward and forward linkages with other sectors of the economy and thus boost their growth and expansion as well (apart from the assumption that investments in various sectors under the product coverage of the ITA will have an overall positive effect on the economy).

4. Complementary measures and/or policies that should be adopted by the Government to further encourage the growth and expansion of the IT sector through both FDI and domestic direct investment.

The study provides policy recommendations for consideration by the Government of Tunisia.