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PRESS RELEASE
PRESS/TPRB/38
11 September 1996TRADE
POLICY REVIEW BODY: REVIEW OF ZAMBIA
TPRB'S EVALUATION Back to top
The Trade Policy Review Body of the World Trade
Organization (WTO) conducted its first review of Zambia's trade policies on 9 and 10
September 1996. The text of the Chairman's concluding remarks is attached as a summary of
the salient points which emerged during the two-day discussion.
The review enables the TPRB to conduct a collective
examination of the full range of trade policies and practices of each WTO member country
at regular periodic intervals to monitor significant trends and developments which may
have an impact on the global trading system.
The review is based on two reports which are
prepared respectively by the WTO Secretariat and the government under review and which
cover all aspects of the country's trade policies, including: its domestic laws and
regulations; the institutional framework; bilateral, regional and other preferential
agreements; the wider economic needs and the external environment.
A record of the discussions and the Chairman's
summing-up, together with these two reports, will be published in due course as the
complete trade policy review of Zambia and will be available from the WTO Secretariat,
Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been
completed: Argentina (1992), Australia (1989
& 1994), Austria (1992), Bangladesh (1992), Bolivia (1993), Brazil (1992), Cameroon
(1995), Canada (1990, 1992 & 1994), the Czech Republic (1996), Chile (1991), Colombia
(1990), Costa Rica (1995), Côte d'Ivoire (1995), the Dominican Republic (1996), Egypt
(1992), the European Communities (1991, 1993 & 1995), Finland (1992), Ghana (1992),
Hong Kong (1990 & 1994), Hungary (1991), Iceland (1994), India (1993), Indonesia (1991
and 1994), Israel (1994), Japan (1990, 1992 & 1995), Kenya (1993), Korea, Rep. of
(1992), Macau (1994), Malaysia (1993), Mauritius (1995), Mexico (1993), Morocco (1989
& 1996), New Zealand (1990), Nigeria (1991), Norway (1991 & 1996), Pakistan
(1995), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992), Senegal
(1994), Singapore (1992 & 1996), Slovak Republic (1995), South Africa (1993), Sri
Lanka (1995), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand (1991
& 1995), Tunisia (1994), Turkey (1994), the United States (1989, 1992 & 1994),
Uganda (1995), Uruguay (1992), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).
TRADE POLICY REVIEW BODY: REVIEW OF
ZAMBIA
CONCLUDING REMARKS BY THE CHAIRPERSON Back
to top
The Trade Policy Review Body has now
completed its first review of Zambia's trade policies and practices. These remarks, made
on my own responsibility, summarize the main points of the discussion. They are not
intended to substitute for the collective evaluation and appreciation of Zambia's trade
policies and practices. Details of the discussion will be reflected in the minutes of the
meeting.
The discussion developed under three main themes:
(i) the external and regional setting for Zambia's trade policies; (ii) Zambia's economic
situation; and (iii) specific questions on trade measures.
External and regional setting for Zambia's trade
policies
Members commended Zambia on its unilateral
liberalization efforts and its determination to base its economic and trade policies on
the principles of the multilateral trading system. The point was emphasised that open
markets were necessary to support Zambia's economic restructuring. Within this context,
Members asked about the access granted to Zambia by its neighbours in regional trade
agreements, such as SADC and COMESA, to which it is a party; that available under the
Lomé Convention; and the effects of such access on Zambia's own liberalization process.
Questions were also posed concerning broader regional co-operation, including under the
Abuja Treaty. Some members noted the desirability of regional approaches on tourism, with
regard to resources shared by Zambia and its neighbours. Participants commented that
Zambia's regional agreements should be fully consistent with the WTO Agreements.
The representative of Zambia began his response by
indicating that he would provide written answers to some of the questions upon his return
to Zambia. Areas he proposed to cover in this way included: the impact of SADC in the
short- and medium-term; the macroeconomic environment; and Zambia's commitments under the
GATS.
The representative of Zambia went on to emphasise
that his country had embarked on an unparalled and bold growth programme in both the
political and economic spheres; Zambia was committed to this programme and sought the
support of the international community to ensure the success of the programme. He
indicated that his country sought to enter into a range of bilateral trade arrangements
and was currently negotiating agreements with Zimbabwe and SACU member States. On regional
arrangements, it was his Government's view that COMESA and SADC could co-exist in a
constructive manner. He noted that there would be a joint COMESA/SADC meeting in November
of this year that would deal with any duplication of activities by the two. COMESA had
been notified to the WTO in line with the Uruguay Round Agreements, and that Zambia would
encourage all COMESA members to ensure that the regional arrangement complied fully with
the WTO.
With respect to the suggestions on regional
approaches to tourism, he indicated that joint packages had been initiated with South
Africa and Namibia and that consultations had been initiated with Kenya. On the Lomé
Convention, he noted that as the preferences would end by the year 2000, Zambia had
already begun to sensitize its business community to the stiffer competition that would
result.
Zambia's economic situation
Members appreciated Zambia's significant economic
reforms introduced since 1991. They noted that results had been slow in coming, partly
because of the recurrence of drought; however, there had recently been an encouraging
expansion of non-traditional exports. Both savings and investment levels remained low:
Members asked about the effects of measures taken to increase savings and attract foreign
direct investment, after the recent removal of specific incentives. Some participants
inquired about levels of interest rates and their effects on competitiveness of Zambian
goods and services; the structure and viability of the external current account; and the
volatility of international reserves. Acknowledging that economic reforms can often be
politically sensitive, Members asked questions regarding the short-term impact, and
longer-term effects, of Zambia's structural adjustment measures, including the
privatization programme. Questions were posed regarding domestic structural constraints on
export diversification and the further development of non-traditional products.
Participants sought clarification on limitations
maintained by Zambia on foreign investment in services. They noted that the prospects for
FDI could be improved by Zambia's participation in future WTO services negotiations and by
increasing its GATS commitments.
The representative of Zambia replied that in the
short term structural adjustment had had adverse effects on the welfare of Zambia's
people. This had not brought any political instability as Zambians strongly believed that
the adjustment programme was the only way to revitalize the economy. In this context,
Zambia had embarked on a comprehensive privatization programme, under which 138 companies
had already been sold. Zambia was committed to privatizing ZCCM, the Copper Company, and
ZAMTEL, the telecommunications company; the former had already been advertised for sale
and the deadline for tenders was end-February 1997. He noted that a number of measures had
been taken to attract foreign direct investment, including the removal of customs duty on
imports of machinery in certain sectors, infrastructural improvements and 100 per cent
profit repatriation by foreign investors. He noted that the Investment Centre did not have
the capacity to process investment licences in the highly complex mining and financial
services sectors; therefore these were the responsibility of the respective Ministries.
New legislation had also been introduced for the creation of private pension schemes,
which might improve savings. The representative emphasised that there were, indeed, a
number of constraints facing Zambian exports, however, Zambia had a comparative advantage
in areas such as horticultural products, precious and semi-precious stones, agriculture,
textiles, engineering, wood and wood products, leather and tourism.
Specific questions
Expressing full appreciation for the considerable
progress made by Zambia in liberalizing its trade régime, Members sought clarification on
the consultative process for trade policy with the private sector. While noting that the
tariff structure had been significantly simplified, participants expressed concerns both
about the low level of Zambia's WTO bindings on non-agricultural products, and about the
disparity between bound and applied rates. Participants noted the heavy dependence of
Zambia's government revenue on border taxes and asked if this might slow its further
pursuit of tariff liberalization.
Specific questions were also raised on the
compatibility of the Import Declaration Fee with WTO rules and timetable for its
abolition; as well as the incorporation of WTO disciplines into domestic trade legislation
including on customs valuation, pre-shipment inspection, and anti-dumping and
countervailing measures. The existence of a long-standing anti-dumping measure, applied on
an m.f.n. basis, was particularly emphasised by some members. Members also asked about
prospects for further liberalization of services sectors, particularly telecommunications,
and the implementation of the trucking activities licence.
The representative of Zambia responded that some 25
per cent of government revenue came from border duties; the dependence was therefore less
serious than had been suggested. Government officials held quarterly meetings with the
private sector to discuss a number of policy issues, including those relating to trade;
the private sector was also involved in trade negotiations and in the preparation for
Singapore. On the disparity between bound and applied tariffs, he reassured Members that
Zambia had no intention of increasing tariffs, but rather was committed to future
liberalization. He indicated that the Import Declaration Fee would be eliminated this
year; a number of measures, including a broadening of the tax base and improved
performance by the Zambia Revenue Authority would fill the subsequent financial gap.
Zambia was fully committed to implementing the WTO Agreement on Customs Valuation, but
needed technical assistance for this purpose; inter-Ministerial consultations were
underway to this effect. He noted that the company making the product on which there was a
long-standing anti-dumping duty was in the process of privatization and hence the duty
could be expected to lapse. He added that there was no discrimination between local and
foreign truckers in granting the trucking activities licence, whose issuance was intended
to arrest smuggling.
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In summary, the overall thrust of the discussion was
encouraging and supportive of the underlying direction of Zambia's economic and trade
policy. At the same time, many of the questions posed reflected members' concern that the
economic reform process in Zambia should be sustained and deepened, accompanied by full
compliance with all of Zambia's WTO obligations.
Members welcomed the significant steps taken by the
Zambian authorities towards a more open and deregulated economic and trade régime; they
also welcomed steps being taken by Zambia to overcome infrastructural and other supply
constraints. They recognized the difficulties of such major adaptation, particularly given
the inevitable time-lag before the steps taken translate into practical benefits for the
Zambian economy. They were conscious that, if the policies pursued domestically are to
achieve the desired results, it is important that they receive support at the regional
level and within the multilateral trading system. Back to top |
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