Cape Verde formally joins World Trade Organization

14.01.2008

Cape Verde Tuesday formally joined the World Trade Organization (WTO) in Geneva, a decision that was supported by the United States, but which could lead to a 40 percent loss in the West African archipelago's tax revenues.

By joining the WTO, Cape Verde can make use of the African Growth and Opportunity (AGOA) program, and can boost its services and transport sectors and the creation of small and medium-sized companies, the deputy representative for Trade for the United States said on a recent visit to the archipelago.

However, 40 percent of Cape Verde's tax revenues come from its customs, a situation which will have to change due to the company's membership of the WTO.

"Around 40 percent of revenues are from customs. The dismantling of customs requires a significant fiscal reform, which will allow the country to replace the loss of customs revenue with other sources of charging taxes," according to a government source.

Cape Verde's minister for the Economy, Growth and Competition, Jose Brito traveled to Geneva to take part in the formal entry of Cape Verde into the WTO.

Cape Verde formally requested membership of the WTO in 1999 and, in the following year, a working group was set up to follow the process. From 2004 until now five negotiation meetings took place, with most progress being made this year.

The membership, according to Brito, well ensure "a certain security for foreign investors," and Cape Verde will be supported in terms of good governance and modernization, as well as harmonization of laws to be more in line with external markets.

The WTO is a worldwide organisation set up in 1995, with 151 countries, which supervises agreements on rules for trade.

source: Macahub

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