TRADE POLICY MAKING PROCESS IN MALAWI

1. TRADE POLICY MAKING PROCESS IN MALAWI Presentation by Mr. H.J.K. Mandindi Director of Trade, Ministry of Industry and Trade

2. Contents • Introduction • Malawi Trade Policy • The Integrated Trade and Industry Policy • Trade Policy Instruments • Strategies • Bilateral, Regional and Multilateral Trade Agreements • Process of Trade Policy Making • Mainstreaming Trade Policy into national development strategies • Conclusion and Recommendations

3. Introduction • The formulation, implementation and management of Trade Policy in Malawi is the responsibility of the Ministry of Industry and Trade • The Ministry undertakes this task by taking into account the interests of the Government, private sector and consumers

4. Malawi Trade Policy • The Malawi Trade Policy is directed towards: • Maintenance of an open economy, with relatively low tariffs (average of 13.5%) and general absence of non-tariff barriers; • achievement of economic growth; • improvement of standards of living; • employment creation; and • attainment of strong balance of payment position. • The Policy aims at creating an environment that is conducive to efficient and competitive performance of the private sector both domestically and internationally

5. Malawi Trade Policy– cont’d • The Trade Policy contributes to the realization of the Malawi Government vision of “transforming the Malawi from a predominantly importing and consuming country to a predominantly producing and exporting country”. • The Policy is premised on the need to integrate the country and to participate effectively in the multilateral trading system.

6. The Integrated Trade and Industry Policy • The Policy was developed in 1998. • It is guided by the Government vision and the Malawi Growth and Development Strategy (MGDS) • The policy is WTO compatible (2002 Malawi Trade Policy Review)

7. The Integrated Trade and Industry Policy – cont’d • Policy ensures adequate supply of essential goods and services through • efficient distribution and import procurement; • consolidation of existing and diversification of export markets; • generation of foreign exchange; • diversification of export products; • development of a conducive trading environment; and • increasing participation of Malawians in trading activities.

8. Trade Policy Instruments • Tariffs, quotas, sanitary and phytosanitary measures, trade remedies(anti-dumping duties, countervailing duties [cvd] and safeguard measures) • Government directives • Laws i.e. the Control of Goods Act

9. Strategies • National Export Strategy - improving the terms of trade and competitiveness of Malawi products. • Private Sector Development Strategy - creating an enabling environment for the growth of the private sector.

10. Bilateral, Regional and Multilateral Trade Agreements • Malawi – Botswana Customs Agreement - symmetrical (1st July, 1955); • Malawi – South Africa Trade Agreement – asymmetrical (1967, 1990); • Malawi – Zimbabwe Trade Agreement – symmetrical with lists of sensitive products (1st November 1994); • Malawi – Mozambique Trade Agreement – symmetrical with lists of sensitive products (28th December, 2005); and • Malawi – People’s Republic of China Agreement on Trade, Investment and Technical Cooperation – asymmetrical (25th March, 2008).

11. Bilateral, Regional and Multilateral Trade Agreements – cont’d • Protocol on Trade of the Southern African Development Community (SADC) {17 August 199}; SADC FTA {17 August 2008} • Common Market for Eastern and Southern Africa (COMESA) {8 December1994}; COMESA FTA (31 October, 2000) • Marrakech Agreement establishing the WTO • Africa, Caribbean and Pacific (ACP) - European Commission (EC) Partnership Agreement – currently negotiating for an Economic Partnership Agreement (EPA) with the EC.

12. Bilateral, Regional and Multilateral Trade Agreements – cont’d • Beneficiary of the African, Growth and Opportunity Act (AGOA) of the United States of America, • Generalized Systems of Preferences (GSPs), • EC Everything But Arms (EBA) Initiative, • Canada, Japan and India initiatives for Least Developed Countries (LDCs).

13. Trade Policy Making Process • process is demand driven • emanates from Ministry’s mandate to regulate and align trade to current Government policies, regional and multilateral trading systems and the interests of private sector • Consultations with stakeholders are done through inter-agency meetings convened by the Department of Trade and regular meetings of the National Working Group on Trade Policy (NWGTP)

14. Process of Trade Policy Making- cont’d • The recommendations from inter-agency meetings are submitted to the Minister of Industry and Trade, through the Director of Trade and Principal Secretary, for consideration and decisions • Recommendations on trade policy matters that impact on other Government policies are processed through Cabinet by the Minister of Industry and Trade • After Cabinet approves the said recommendations policies are made • Policies requiring enactment of laws are processed further through Parliament • Implementation, monitoring and review of Trade Policies is done by the Department of Trade in the Ministry of Industry and Trade

15. Mainstreaming Trade Policy into national development strategies • The Ministry of Industry and Trade has the responsibility of mainstreaming trade policy into national development strategies to ensure effective implementation of the policies • Main instruments that are used for mainstreaming trade include: the formulation of the MGDS, Public, Private – sector Dialogue (PPD) and sectoral consultations

16. Conclusion • The trade policy-making process is highly consultative and takes into account the interests of Government, private sector and consumers • Mainstreaming of trade policies into national development strategies is crucial for effective implementation of the policies

17. Recommendations • Consultative fora such as the NWGTP and PPD to be strengthened to ensure that the interests of stakeholders ( government, private sector, consumers, etc) in trade policy formulation and implementation are taken into account • Institutional capacities of stakeholders, including non-state actors (i.e. civil society) in formulation of trade policies be enhanced

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