Malawi banks on new UK trade deal
Minstry of Trade says the proposed United Kingdom (UK) Generalised Scheme of Preferences (GSP) stands to further improve access to the UK market for developing countries such as Malawi.
The GSP scheme will enable UK importers pay lower, often zero percent tariffs, on imports of textiles and other products from about 70 developing countries, including Malawi.
Speaking on Tuesday in Blantyre during a stakeholder validation workshop to consider a report on the newly-proposed UK-GSP scheme, Ministry of Trade Principal Secretary (PS) Christina Zakeyo observed that GSP schemes are fundamental instruments for increasing exports.
She, however, said Malawi needs to address issues of high tariffs, stringent rules of origin and non-tariff barriers to benefit.
Said Zakeyu: “As Malawi, we would like to optimise the following policy focus areas earmarked for adjustments, reducing tariffs for low-income and lower middle-income countries and simplifying rules of origin requirements for least developed countries.
“We also need to address amendments to the conditions and reporting requirements that enable a low-income or lower middle-income country to benefit from more generous provisions through the enhanced framework.”
In 2020, the UK Government announced that countries that are currently eligible for trade preferences under the European Union GSP would be maintained after the Brexit transition period from January 1 2021.
Prior to the UK’s withdrawal from the EU on January 31 2020, trade between Malawi and the UK was guided by the Everything But Arms (EBA) initiative, an EU GSP framework which extends preferential treatment to EU imports from developing countries.
However, following Brexit, an interim framework which replicated the EBA provisions has guided trade between the UK and the developing countries since January 1 2021.
A draft report on Malawi National Consultations on the Proposed Generalised Scheme of Preferences of the UK by Ronald Mangani, associate professor of economics at the University of Malawi recommended that for Malawi to benefit fully from the proposed UK GSP, it should build strong relationships with UK buyers, identify and cultivate business opportunities, while building a strategy to minimise risks and enhance industrial efficiencies.
It also recommended that Malawi should improve the quality of its products and raise national testing standards for food products to meet internationally-accepted standards.
Malawi has to also implement an enhanced programme on social and ethical standards, training on quality, value addition, and export requirements.
Reads the report in part: “A particular issue in the sugar industry is the tariff rate quota of 260 000 tonnes for raw cane sugar imported into the UK as part of the UK Global Tariff.
“Once the 260 000 tonnes threshold is met, any excess importation of sugar attracts 28 British pound sterling per 100 kilogrammes of sugar entering the UK.”
Apart from sugar, Malawi also imports tea and coffee to the UK market.
