WTO trade deal will create problems for Zim – Bimha

via WTO trade deal will create problems for Zim – Bimha | The Source January 16, 2014

Industry and Commerce minister, Mike Bimha said an agreement reached at the recent World Trade Organisation (WTO) ministerial conference in Indonesia to facilitate trade between the West and developing countries will result in balance of payment problems and external competition for Zimbabwe.

Addressing journalists on Thursday on the outcome of the 9th ministerial conference held last December, Bimha said while the Trade Facilitation Agreement had been designed to provide a permanent solution to the developed world’s need to gain easy market access in developing countries, “this will cause greater economic difficulty for a country such as Zimbabwe.”

The meeting focused on trade facilitation, development issues on special and differential treatment, monitoring measures and agriculture – food security and trade rate quota system.

“The provisions also demand amendments to our legislation as well as large investments in infrastructure and capacity building,” Bimha said.

Zimbabwe is currently implementing trade facilitation programmes based on its customs regulations.

Bimha said the country will, however, not gain much from the agreement being a net importer as there will be facilitation of more imports relative to exports, negatively affecting Zimbabwe’s trade balance and balance of payment position.

“Zimbabwe, together with other developing countries, managed to retain some safeguards in implementing the cumbersome and mandatory provisions of an agreement that carries with it the Dispute Settlement System in case of breach,” he said.

The WTO deal seeks to simplify customs procedures by reducing costs and improving speed and efficiency.

It has provisions on goods in transit, an issue of particular interest to landlocked countries seeking to trade through ports in neighbouring countries.

Part of the deal involves technical assistance for developing and least developed countries to update their infrastructure, train customs officials, or for any other cost associated with implementing the agreement.

The benefits to the world economy are estimated to be between $400 billion and $1 trillion by reducing costs of trade by between 10 and 15 percent, increasing trade flows and revenue collection, creating a stable business environment and attracting foreign investment.