Malawi-us trade at $35m surplus
Malawi has maintained a trade surplus with the United States (US) under the African Growth and Opportunity Act (Agoa), with exports remaining relatively consistent in value over the past two decades, US government statistics show.
The Agoa statistics contained in a latest Trade Law Centre update shows that Malawi’s exports to the US through the Agoa window stood at $47 million (about K38.68 billion) in 2020 while US exports to Malawi stood at $12 million (about K9.8 billion).
Overall, the data, which is analysis of the country’s trade with the US since 2000 when the Agoa window was established, shows that the balance of trade between the US under Agoa preference
and Malawi stood at $35 million (about K28.80 billion) as at 2020.
Ministry of Trade spokesperson Mayeso Msokera in an interview said the Agoa market access window still offers a lot of products originating from Malawi, duty-free and quota-free access to the US market.
“Thus, our producers and exporters stand a chance to gain a competitive advantage over exporters in other countries who may need to pay standard US import duties when they export their products to the USA,” he said.
Malawi is one of the 39 African beneficiaries of Agoa though businesses in Malawi have historically not been able to take full advantage of the provision which aims to significantly enhance market access to the US for qualifying Sub-
Saharan African (SSA) countries.
Although the data shows that Malawi has maintained a trade surplus, the country’s exports to the US have been falling steadily since the inception of the Agoa window.
According to the data, in 2000, Malawi’s exports to the US stood at $68 million (about K55.96 billion) in 2000 before they fell to $47 million (about K38.68 billion) in 2020.
Economists have since called for the need to diversify its exports as this would help the country benefit more from the Agoa provision.
“Malawi has a low export base where the country produces a few products that are exported with most of them not processed which in the end attracts low returns in value,” said University of Malawi economics professor Ben Kaluwa.
He noted that Malawi has other constraints other than the low export base. These include the increase in cost of production which has made our exports become expensive as compared to exports from other countries targeting the same market.
According to the Agoa data, oil and gas, apparel and accessories and transportation equipment remain the top leading exports to the US through the Agoa window.
The Agoa window gives Malawi and other SSA nation’s duty-free access to US markets for certain goods such as leather, chemicals and agricultural products.
