Tackling trade barriers

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Zimbabwe is open for business and this position was concluded when the business environment was relatively stable notwithstanding the lacklustre indications in the Africa Regional Integration Index Report of 2016.

Zimbabwe scored the highest index in the Productive Integration dimension within the SADC region, however, she ranked poorly in the Trade Integration dimension.

Covid-19 has declared war on the economy. We are living in nervous conditions where the disease has wiped out more than 280 000 people nevertheless claiming the scalp of all economies globally through the necessary lockdowns.

We abandon the laissez-faire way of doing things and opt to handle the economy bull by its horns to force it on the desired economic trajectory.

This becomes the only way for Zimbabwe to be the investment destination of choice within the Regional Economic Communities and the Africa Continent Free Trade Area.

It will not be a walk in the garden park as international trade is a multi-faceted complex discipline with several factors involving customs procedures, transport modes, types of cargo ranging from containerised Full Container Load (FCL), containerised Low Container Load (LCL), containerised Groupage, and Break Bulk cargo just to mention a few.

Embedded in the enumerated scenarios is the daunting task to ensure timeous clearances within the legal framework, while avoiding demurrages and penalties that many a time have brought business to its knees.

Trade barriers come in many forms and it is up to business and various stockholders to identify trade bottlenecks in supply chains that impede trade. Research has evidence that tariff — barriers do not stifle trade in the way non-tariff barriers do.

It will take 38 days to import a container from a country in the Sub-Sahara Africa and 32 days to export a container within the Sub Sahara Africa.

On the home front it is not uncommon for cargo to spend seven days at the border post.

These problems have been known all along, however, with most economies now in ashes due to Covid-19, the ball game changes as it is crystal clear that improvement on trade facilitation is not solely the function of the Ministry of Finance but a much broader approach that takes the whole of government, National Trade Facilitation Committee and the multi stack holders that are informed by strong private sector participation. The solutions should be guided by that trade barriers are not issues limited to customs but include multi agencies. The solution demands a fresh and serious perceptive on trade facilitation as a competitive strategy for businesses in the country.

Zimbabwe is a signatory to the WTO Trade Facilitation Agreement, which was ratified in October 2018 .Trade facilitation is an enabler of trade as it has several all-encompassing mechanisms that include the provisions to monitor and evaluate the employed trade intervention strategies that have been put in place. The most important aspect of this agreement is that it emphasises on harmonising, simplifying and streamlining border management systems.

The World Bank advises that virtually all countries attest to the fact that trade facilitation reform does not only tackle barriers it also ensures that the benefits of trade are realised by countries. It is therefore not surprising that nowadays bilateral and regional trading agreements include effective border management and provisions for ease of doing business as well. AfCFTA Protocol on Trade on Goods has Annexes 4 and 5 as provisions for Trade Facilitation and Non- Tariff Barriers respectively. The World Bank report also observes that despite the effectiveness of trade facilitation, customs agencies and other border complimentary agencies in Africa do not value the positive impact of trade facilitation.

This is because they understand their core business to be primarily to collect revenue, assist industry and protect the community through controls. Furthermore the donors have traditionally concentrated on customs while neglecting other non -customs agencies like Immigration.

The effects of trade barriers are disproportionately felt more by MSMEs and women in cross border trade. Research reveals that MSMEs and women in the informal cross border trade tend not to benefit from the preferential treatment offered by trade agreements.

However, within the COMESA region the Simplified Trade Regime has managed to enable small traders to enjoy the preferential rates. It is a challenge for women and MSMES to meet the costs associated with customs services and the consequential delays. The lack of knowledge of customs procedures and delays at border posts has a gendered impact on women worsened by the fact that the customs brokers industry largely remains a masculine domain.

Delays and bureaucracy feature as significant trade barriers. It is within the private sector to lobby government for comprehensive trade reform with a focus on border management. Most countries in Africa have reaped the benefits of cooperation and information sharing amongst border agencies that has resulted in the investments of concepts like the Single Window System, One Stop Border Posts harmonisation and simplification of customs procedures.

Serious private sector involvement and strong political will can institute trade facilitation reforms that will enable Zimbabwe businesses to be competitive in the SADC and COMESA Regional Economic Communities. This will improve our Index Ratings in the Africa Trade Integration Dimension after the trade barriers are systematically dismantled.

In view of Covid-19 and as guided by UNCTAD, maybe it is time some of trade and customs regulations are relaxed as what happens in recovery strategies after a war like Covid-19.–herald.cl.zw

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