The Malawi Government says it is still considering whether to sign the Economic Partnership Agreement (EPA) with the European Union (EU), one of the country’s most lucrative markets.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi in a telephone interview on Wednesday said the government is still looking at market access offer under the EU pact.
“We are about to complete the country’s development matrix tools which will be used to approach and negotiate with the EU under the EPAs. After the completion of the tools, we will consult stakeholders,” said Nkombezi.
But the free trade negotiations between the EU and African Caribbean and Pacific (ACP) countries will close on October 1 2014 regardless of the state of the deal.
Consequently ACP countries would lose duty free access to the lucrative EU market if they do not sign the EPAs which are meant to replace the current non-reciprocal duty free access which apparently breach international trade law.
If government signs the EPA, the EU will also have a reciprocal free access into Malawi.
The EU remains one of the most important markets for Malawi with exports to Brussels dominated by tobacco, sugar, tea and groundnuts.
In 2012, Malawi’s top exports to the EU included $216 million (K93 billion) of tobacco, $75 million (K32 billion) of sugar, $24.3 million (K10 billion) of tea, and about $3 million (K1.3 billion) of groundnuts.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Newton Kambala on Wednesday said the EU remains an important market for the economy.
However, because of Malawi’s income status, it currently benefits from the amended EU non-reciprocal preferential tariff scheme which was effected on January 1 2014.
Being one of the 49 Least Developed Countries (LDC), Malawi still benefits from the Everything But Arms (EBA) and enjoys a duty-free, quota-free access to the EU for all products from the recently amended Generalised System of Preferences (GSP).
The access may, however, come to an end once the country graduates from its current LDC status.
But Nkombezi said Malawi will only sign the EU pact if it is beneficial to our economy.
He argued that parties to a negotiation reach an agreement if it benefits both of them.
Negotiating under the Eastern and Southern Africa (ESA), Malawi earlier did not sign an interim agreements arguing that it was not beneficial to the country.
At the end of 2007, six States which included Comoros, Madagascar, Mauritius, Seychelles, Zambia and Zimbabwe in the ESA negotiating block concluded an interim EPA with the EU.