INDUSTRY and Commerce minister Mike Bimha said Zimbabwe will not gain much from the trade facilitation agreement adopted at the World Trade Organisation (WTO) ministerial conference last month as the country continues to be troubled by a huge trade deficit.
By Business Reporter
The WTO 9th Ministerial Conference (MC9) was held from December 3 to 7, 2013 in Bali, Indonesia.
Addressing a media briefing in Harare yesterday, Bimha said this development implieD that there will be facilitation of more imports relative to export and has the effect of negatively affecting the country’s trade balance and balance of payment position.
“Although the trade facilitation agreement will bring benefits, Zimbabwe will not gain much because the country is a net importer,” Bimha said.
By the end of December, total exports for 2013 were projected to reach $4,430 billion with exports expected to reach $7,682 billion resulting in a trade deficit of over $3 billion.
He said Zimbabwe was among the WTO member countries set to receive assistance to upgrade infrastructure and training of customs officials as part of the agreement which was adopted at the WTO 9th ministerial conference.
Bimha said among the adopted decision at the conference were development issues on the Special and Differential Treatment (SDT) monitoring mechanism, Food Security and Tariff Rate Quota (TRQ) administration proposals and Trade Facilitation.
He said the adopted decisions were not final although the substances would not change, but will be checked and corrected to ensure the language was legally correct, aiming for the general council to adopt it by July 31.
“Part of the deal involves assistance for developing and least developed countries to update their infrastructure, train customs officials, or for any other cost associated with implementing the agreement,” Bimha said.
He, however, said that the trade agreement signed to provide a permanent solution to the developed world need to gain easy market access in developing countries, would cause greater economic difficulties for a country such as Zimbabwe as this would result in balance of payment problems and external competition.
He added that the trade facilitation decision had also adopted a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency.
“It will be a legally binding agreement and is one of the biggest reforms of the WTO since its establishment in 1995,” Bimha said.
Bimha said the benefits to the world economy are calculated to be between $400 billion and $1 trillion by reducing costs of trade by between 10% and 15%, increasing trade flow and revenue collection, creating a stable business environment and attracting foreign investment.
On the issue of agriculture, Bimha said government has agreed to improve market access for cotton from at least developed countries with development assistance for production in those countries.
He, however, said work would be carried out on the operationalisation of the Trade Facilitation Agreement by amending the Marrakech agreement.