On behalf of the European Union, I would like to welcome the Delegation of Madagascar, led by Ms. Priscilla ANDRIANARIVO, Secretary General, Ministry of Industrialization and Trade, and thank the Discussant, Ms Clara DELGADO JESUS, Ambassador of Cabo Verde, for her introductory remarks.

The European Union welcomes the opportunity to review the developments in Madagascar’s trade policies and practices since its last Trade Policy Review in 2015.

Madagascar has a strong potential for economic growth due to its young and growing population, strategic geographical location, biodiversity, and diverse natural resources. Despite this potential, the Malagasy economy faced external and internal shocks during the review period of 2015-2024, including natural disasters, the recent pandemic, disruptions to global supply chains, and extreme local weather conditions.

Consequently, the country recorded only a modest real GDP growth (averaging 2.7% year-on-year for 2015-2023), resulting in limited progress in improving social and poverty indicators. The COVID-19 pandemic, in particular, disrupted the positive trajectory, leading to a contraction of over 7 per cent in 2020. While the economy rebounded in 2021, the growth slowed down during the subsequent two years. A 3% growth rate is much too small for a least-developed country with a population that is growing by 2.3% each year. Therefore, the adoption of policies that will contribute to economic expansion should be a singular focus of the government. Looking ahead, the International Monetary Fund projects a growth rate of 4.6 % for this year.

The EU commends Madagascar for its effective monetary policies, which have helped curb inflation, and we welcome the ongoing reforms aimed at stimulating investment and fostering a more resilient and inclusive economy for the future.

The country's dependency on agriculture and mining exports further emphasizes the need for industrial diversification and economic transformation. We encourage the Malagasy Government to maintain its momentum in implementing structural reforms. In this regard, transparency and the fight against corruption are among the crucial factors for the business climate, as are clear legislation and an independent and effective judiciary. Additional efforts in these areas, as well as access to energy, trade corridors, and quality standards, would support the expansion of the private sector.

Madagascar remains an attractive destination for foreign direct investment, primarily driven by its natural resources, and the EU continues to be Madagascar's main trading partner and a significant source of investment. In 2022, the EU’s foreign direct investment stock in Madagascar amounted to 786 million euros, and FDI inflows rose further in the post-pandemic years. Total trade in goods between the EU and Madagascar reached 1.8 billion euros in 2023.

Regarding our bilateral relationship, the EU and Madagascar (alongside Comoros, Mauritius, Seychelles, and Zimbabwe) launched in 2019 the negotiations for the deepening of the currently implemented Economic Partnership Agreement (EPA). Fourteen rounds of negotiations have already taken place with the 15th round taking place in March 2025 in Brussels. The future agreement will be the first comprehensive modern free trade agreement in Sub-Saharan Africa and will contribute to increased trade relations with the EU and increased regional integration. We look forward to the conclusion of the negotiations this year.

On the regional front, Madagascar ratified the Agreement establishing the African Continental Free Trade Area (AfCFTA) in November 2024 - an important trade initiative that the EU very much supports. We welcome these initiatives as they demonstrate Madagascar’s commitment to integrating into global trade frameworks. Madagascar has made notable progress in integrating itself into key WTO agreements. During the period under review, it ratified the WTO Agreement on Trade Facilitation and the Protocol Amending the TRIPS Agreement on the issue of patents and public health. Madagascar is also a member of the Informal Working Group on Trade and Gender and a number of environmental work streams. The EU invites Madagascar to join the Investment Facilitation for Development Agreement, in order to improve the investment and business climate and make it easier for investors in all sectors of the economy to invest in the country. We also encourage Madagascar to join the E-commerce Joint Statement Initiative to advance the rules and guidelines that facilitate and promote international e-commerce.  

In our written questions, the EU has raised a number of issues. We encourage Madagascar to ratify the phase 1 of the WTO Agreement on Fisheries Subsidies. We have also sought information on incentives for the consumption of fossil fuels as well as on the envisaged products and markets for economic diversification, and the lack of coordination between the national border agencies. We thank Madagascar for the replies.

Chair, the EU is committed to supporting Madagascar in achieving its sustainable development goals and fostering a fair and transparent trading system. On behalf of the EU and the EU Member States, we look forward to a constructive dialogue with Madagascar during its 4^th Trade Policy Review. Thank you.