Libya - World trade indicators 2009 (Vol. 1 of 2) : Trade brief

 72663 v1 World Trade Indicators 2009/10 Libya Trade Brief Trade Policy External Environment In line with its WTO accession process, Libya has Libya’s exports face an average rest of the world tariff implemented numerous trade liberalization reforms, (including preferences) of 5.6 percent in 2006. When such as reducing the number of state importing weighted by its actual exports, Libya’s exports have monopolies, limiting the number of import bans, very good access to international markets with a abolishing licenses for most goods, and reducing weighted rest of the world tariff (including subsidies.1 In 2005, the government abolished duties preferences) of 0.1 percent, much lower than the on 3,500 products, and subjected around 80 remaining averages for its regional and income group products to duties between 5 and 50 percent. Today, comparators of 1.3 and 1.8 percent, respectively. Libya Libya’s simple average of the MFN applied tariff is 0 mainly exports hydrocarbons, which accounts for the percent. Consequently, Libya appears to have the most low rest of the world tariff for non-agricultural goods liberal trading regime in the Middle East and North of 0.1 percent. The Libyan dinar, which is pegged to Africa (MNA) region and within the upper-middle- the SDR, depreciated by 2.3 percent in nominal terms income countries. Indeed, based on its latest MFN against the U.S. dollar in 2008.5 applied tariff, it is ranked the least restrictive country out of 181 countries in the ranking, along with Hong Libya is a member of the Common Market for Eastern Kong, China, and Macao, China. However, the and Southern Africa (COMESA), which established a country still has several non-tariff barriers to trade. customs union in June 2009 and plans to fully For example, a service fee of 4 percent is imposed on implement it by 2012. Also, at the end of 2008, Libya all imported goods and the government maintains a has started negotiations with the EU on a framework monopoly over some imports.2 Moreover, imported agreement which would also provide for a free trade and domestic goods face different levels of the area.6 This would be of particular importance consumption tax. considering that over two thirds of Libya’s exports go to EU countries. Moreover, Libya is a member of the In the context of the global recession, at the beginning Greater Arab Free Trade Area (GAFTA) through of 2009, Libya imposed a new consumption tax on which it receives full exemption of customs duties to imported finished goods that does not apply to the 16 other member countries since January 2005. same goods produced domestically.3 According to reports in the Egyptian press, in June 2009, Libya has imposed a 10 percent import duty on imports of food Behind the Border Constraints from Egypt.4 Libya lags noticeably behind its regional and upper