Malawi’s use of the generalised system of preferences (GSP) to access international markets faces low utilisation, a situation experts say calls for sensitisation of the stringent nature of standards required in foreign markets.
Malawi Trade Policy Review indicates that the main reason for the low utilisation for most of GSP, a preferential tariff system which provides tariff reduction on various products, is the country’s weak productive base and business operating environment.
Reads the policy review in part: “As a least developed country, Malawi faces supply-side infrastructure and productivity constraints and is highly susceptible to fluctuations in commodity prices.
“Malawi’s implementation challenges still remain. These relate to the capacity to comply with World Trade Organisation notification requirements.”
Malawi, as least developed country, continues to use the Everything But Arms initiative to access the European Union (EU)market, which is part of the EU GSP, United Kingdom GSP and various other GSPs, such as China, Canada, Japan, India and the United States African Growth and Opportunity Act.
The UK GSP scheme, for instance, allows UK importers to pay lower, often zero percent tariffs on imports of textiles and other products from developing countries, including Malawi.
In a written response yesterday, economic statistician Alick Nyasulu observed that Malawi has never fully utilised its trade agreements as manufacturers have not been well sensitised with little investments made in standards certification and enforcement.
“Besides the tough business environment, it is important that manufacturers take steps to appreciate that the needs of foreign markets are tough,” he said.
National Working Group on Trade and Policy chairperson Frederick Changaya said lack of policy coherence has impacted trade agreements utilisation.
“Malawi has so many policies that are not in sync with multilateral trade agreements,” he said.
Ministry of Trade and Industry officials were not immediately available for comment, but in an earlier interview, the ministry’s Principal Secretary Christina Zakeyu said while GSP schemes are fundamental instruments for increasing exports, Malawi needs to address issues of tariffs, stringent rules of origin and non-tariff barriers
