ZIMBABWE’S trade with the European Union (EU) slumped by 9,8% last year and the decline is due to the euro zone crisis and a poor agriculture season, European Union Ambassador to Zimbabwe Aldo Dell’Ariccia, has said.
Report by Nqobile Bhebhe
The EU is the country’s second largest trading partner after South Africa.
Dell’Ariccia this week told NewsDay that trade relations between the trading bloc and Zimbabwe have always been solid.
According to Dell’Ariccia Zimbabwe exported ferro-chromium, raw cane sugar, non-industrial and industrial diamonds; copper (refined), raw hides, citrus, cut flowers and vegetables to the EU.
Other products included granite, leather, cotton and black fermented and partially fermented tea.
Indications that the country was exporting diamonds to the EU come at a time when the government has over the years blamed the underperformance of diamond revenue on economic sanctions imposed by the United States and the EU.
“The total trade between Zimbabwe and the EU shows a decrease of 9,8% in 2012 from the previous year with a decrease on the Zimbabwean exports to the EU of 16,47% and a slight increase of the imports from the EU of 2,54%,” Dell’Ariccia said.
“The decrease in the trade is due to several factors like the EU crisis, the less-good-than-expected agricultural season in Zimbabwe (a high percentage of the exports to the EU are agricultural products) and the fluctuation of international commodity prices (some commodity prices went down on international markets).”
The envoy, however, said trade between the two parties was set to expand after Zimbabwe completed the ratification of the interim Economic Partnership (EPA).
“The coming into force of the agreement will have very positive implications for the business climate in Zimbabwe and will provide a wide range of opportunities for exports and access to new markets in the EU and within the Eastern and Southern Africa region” he said.
Economic Partnership Agreements are a scheme aimed at creating a free trade area between the EU and the African, Caribbean and Pacific group of states.
Zimbabwe entered into an interim EPA with the EU in 2009, giving the country a 100% duty-free quota access into the EU market with a transition period for rice and sugar.
Zimbabwe in turn would liberalise 80% of imports from the EU by 2022, 45% by 2012 with the remaining 35% of imports being liberalised progressively until 2022.
The EPA scheme is also considered a mechanism for countries such as Zimbabwe to manage liberalisation of the economy, as it allows some room for them to manoeuvre and to maintain some limited protection of their most vital products.