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Priority III(a) of the VPoA- International Trade

Explore Botswana's efforts in global trade advancement, examining policies, strategies, and trade agreements for economic growth and market expansion. Discuss the relevant objectives, challenges, and implementation status.

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Priority III(a) of the VPoA- International Trade

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  1. Priority III(a) of the VPoA- International Trade National Stakeholder sensitization Workshop on the Vienna Programme of Action 27– 29 October 2015

  2. PRESENTATION OUTLINE • Priority III(a) objectives • Actions by LLDCs • How far is Botswana? • Policies and Strategies • Trade Agreements IV. Challenges

  3. I. Priority III (a) objectives • Significantly increase the participation of LLDCs in global trade, with a focus on substantially increasing exports • Significantly increase the value added and manufactured exports with the objective of substantially diversifying their markets and products • Strengthen economic and financial ties with countries in the region so as to gradually and consistently increase the share of landlocked developing countries in intraregional trade

  4. II. Actions by LLDCs • Develop and implement policies, strategies and measures that will significantly increase economic and export diversification and value addition • Integrate trade policies into national development strategies • promote a better business environment so as to assist national firms to integrate into regional and global value chains • fully leverage bilateral and regional preferential trading arrangements with a view to broadening regional and global integration

  5. III. Status of Implementation by Botswana towards achieving Priority III(a) • National Trade Policy (2010) • Complementing Strategies and Policies • Trade Agreements

  6. NATIONAL TRADE POLICY • The National Trade Policy (NTP) was adopted by Parliament in March 2010and is currently under review. • The National Trade Policy is intended to achieve, among others, the following: • export diversification; • economic diversification; • global competitiveness; • private sector development; • Employment creation; and • Poverty reduction.

  7. Complementing Policies and Strategies The following strategies, complementary to the NTP and necessary for the NTP to achieve its objectives are in place: • Industrial Development Policy • National Export Strategy • Special Economic Zones Policy • Competition Policy • Economic Diversification Drive strategy and • Private Sector Development Strategy.

  8. TRADE AGREEMENTS Why Trade Agreements? Secure access to world markets for locally produced goods and services (given limitations set by Botswana population) Access to inputs and finished goods at competitive prices Facilitate industrial development thus creates employment opportunities and contribute to poverty eradication In some cases, Trade Agreements, especially with more advanced economies provide for technical and development assistance 8

  9. TRADE AGREEMENTS (cont.) Botswana is currently party to a number of trade agreements being: Botswana /Zimbabwe Trade Agreement • Since 1956 and amended in August 2010. • Aims to facilitate trade between the two countries. Opportunities • Broaden the scope of investment • Enhance economic cooperation • Duty free access for goods wholly originating or meeting 25% local content e.g. animals born and bred, crops grown or minerals extracted in a country • Cumulative principle; material from either contracting Party counts towards local content • Waste and scrap are recognised and acceptable raw material for production of goods to be traded under the agreement

  10. Trade Agreements (cont.) SACU Agreement(Between Botswana, Lesotho, Namibia, South Africa & Swaziland) • Since 1910, amended 1969 • Latest amendment signed in 2002 Objectives among others include: • To facilitate the cross-border movement of goods between the territories of the Member States; • To create effective, transparent and democratic institutions which will ensure equatable trade benetif to Member States; • To promote conditions of fair competition in Common Customs Area; • To facilitate development of common policies and strategies; • To enhance economic development, diversification, industrialisation and comeptitiveness of Member States; • To facilitate the equatable sharing of revenue araising from customs, excise and additional duties levied by Member States

  11. Trade Agreements (Cont.) SACU/European Free Trade Association(EFTA): (Iceland, Liechtenstein, Norway and Switzerland) • Free Trade Agreement (FTA) • Signed in 2006 and implementation started in 2008 Opportunities • offers SACU duty free and quota free access for nearly all industrial products e.g. Textile & Clothing, leather products, feather dusters, brooms and mops, jams and fruit jellies • SACU Member States signed Bilateral Agricultural Agreements with Norway, Iceland and Switzerland • Reduced margins of preference on WTO quota system for SACU e.g. meat of bovine fresh/chilled (85% of MFN), meat of swine fresh or chilled (free), Vegetables free (Nov-May), natural honey (free) • Norway offered Botswana and Namibia duty free beef quota (500 tons) to be shared

  12. Trade Agreements (cont.) SACU/Common Market for the Southern Cone (MERCOSUR): (Argentina, Brazil, Paraguay and Uruguay) • Preferential Trade Agreement (PTA) • Signed in April 2009. • Not yet implemented pending ratification by all parties. Opportunities • Strengthening economic co-operation ties • Preferential market access to the South American countries e.g Hen eggs, carrots & turnips, cabbage, lettuce, cucumbers, canned pears, salts

  13. Trade Agreements (cont.) SADC Protocol on Trade • Signed in 1996 and implemented in 2000 Agreement aims to: • Liberalize intra regional trade in goods & services • Improve climate for domestic, cross border and foreign investment. • Enhance economic development and industrialization • Deepen regional integration through the FTA (2008), Customs Union (2010), Common Market (2015) etc. Negotiations on Trade in Services • SADC has identified the following 6 priority areas for negotiation (Communication, tourism, energy related, transport, financial & Construction) • Preparations for the negotiations are on-going. Opportunities • Enlarged market - population 274 million, GDP US$ 558 billion • Source for materials and market for finished products increased • Increased potential for non traditional export

  14. Trade Agreements (cont.) SADC/EU Economic Partnership Agreement (Angola, Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland) EU Market size; 27 members • Population - 502.5 million • GDP – €12, 279 033billion Opportunities • Offers Duty Free Quota Free Access for almost all products [both industrial and agricultural (except sugar & rice which have special conditions as well as Arms)] • Allows more liberal rules of origin (single stage transformation), • Allows for accumulation with other Countries who have signed the EPA • Technical assistance- EUROPEAN Development Fund/European Investment Bank and Centre for Development of Enterprises • Gradual liberalization for EU goods in SADC over a 10 year period.

  15. Trade Agreements (Cont.) The World Trade Organization • Rules based Multilateral Organization, currently comprising 161 Member States • Established in January 1995 following the Uruguay Round of multilateral trade negotiations. • Members currently negotiating the Doha Development Round with a view to increasing market access and updating trade rules

  16. On-going Negotiations: SACU/India Preferential Trade Agreement Opportunities • Shared experiences with SMME • Appropriate technology • Competitive intermediate inputs SADC/COMESA/EAC Tripartite Free Trade Area - 26 countries • Combined population of 527 million {SADC- 258m(SACU 58million)} • Combined GDP +/- 1000 billion [SADC –US$ 558 billion(SACU- US$383 billion) Continental Free Trade Agreement • covers market size of about 1.6 billion, • established to achieve a mutually beneficial trade agreement for members of the African Union through enhancement of industrial development and diversification of African economies. Free movement of business persons • The scope of the negotiations will cover trade in goods, trade in services, investment, intellectual property rights and competition policy.

  17. IV. Challenges • Relatively small firms: limited capacity (limited resources and technology) • High costs of production (high inputs + Transportation cost hence uncompetitive prices • NTB/Measures (Standards) • Tariff Escalations

  18. THANK YOU

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