The Indian Ocean island has cut import tariffs on farm produce and industrial goods, and opened up services such as tourism and telecoms, as part of efforts to reform the economy.

But the WTO said Mauritius should narrow the gap between its bound tariff rates -- the ones which it commits to under WTO agreements -- and the rates it is actually applying.

It should also modify its legal commitments in the services sector, which accounts for nearly 70 percent of economic output, to reflect its more liberal regime, the WTO said in a trade policy review.

"This is particularly the case for professional services, given Mauritius's increased use of imported labour and attempt to attract foreign professionals," it said.

Mauritius is a net food-importing country. Its main farm export is sugar which accounts for 16 percent of foreign exchange earnings from merchandise exports.

Weak sugar prices until this year have been part of a "triple shock" to the economy.

Mauritius has also suffered from the global liberalisation of the textiles and clothing industry, which accounts for 36 percent of foreign exchange earnings from merchandise exports, reforms to the EU sugar regime and rising oil prices.

Continued reforms should allow the economy to grow about 4 percent a year in real terms in the medium term. This compares with an average 5.1 percent since 2003, up from an average 2.2 percent in 2001 and 2002, the WTO said.

The European Union is the biggest trading partner of Mauritius, importing the bulk of its sugar and a large share of its textiles and clothing. As most of these exports are denominated in euros, Mauritius has benefited from the appreciation of the single currency, the WTO said.

The WTO said Mauritius's membership in several regional trade agreements could be difficult to manage and conflict with its plans to become a duty-free island.

Mauritius has cut its average agricultural import tariff to 8.5 percent from 20.5 in 2001, and its non-agricultural tariff to 6.3 percent from 19.8 percent, the WTO said.

Mauritius is one of the most prosperous countries in sub-Saharan Africa, with GDP per head of $5,807 in 2007.