The Ministry of Industry and Trade has said land-locked Malawi stands to benefit greatly from the newly launched on-line Non-Tariff Barrier (NTB) reporting which covers the tripartite free trade area (TFTA).
TFTA recently launched an on-line NTB reporting mechanism which is aimed at monitoring and eliminating technical and other non-quantitative barriers to trade occurring in the region.
The TFTA is a grand Regional Economic Community (REC) currently under negotiations which will see the removal of both tariff and non tariff barriers in three trade blocs-the Southern Africa Development Community (Sadc), the Common Market for Eastern and Southern Africa (Comesa) and the East African Community (EAC).
Consequently, the TFTA will see Malawi trade freely with other 25 countries which include Angola, Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Mauritius, Rwanda, Seychelles, South Africa, Sudan and Uganda.
Responding to an e-mailed questionnaire on Friday, the ministry’s spokesperson Wiskes Nkombezi said the system will create seamless international trade among the members through the elimination of NTBs.
“The system will help speed up trade between Malawi and trading partners within the three trade blocs. Malawi will particularly benefit because being a land-locked country, traders sometimes face NTBs in transit to the sea. As such this system will increase efficiency in the movement of goods, reduce the cost of doing business and improve Malawi trading capacity with her partners. The web-based NTBs mechanism will enhance transparency and easily follow up on reported and identified NTBs,” said Nkombezi.
Nkombezi added that the removal of non-tariff barriers to trade is identified as one of the priority areas of cooperation under the tripartite framework. With tariff liberalisation achieved so far in the three trade blocs, elimination of various NTBs still remain a challenge and hence contribute to the high cost of doing business. The therefore inhibits regional trade and hence defeats the spirit of regional integration and trade liberalisation.
On how the ministry is raising awareness on the new system to ensure local traders use it, Nkombezi pointed out that there is a National NTB Monitoring Committee which comprises among others the Cross Border Traders Association, Road Transport Operators Association, Malawi Confederation of Chambers of Commerce and Industry, Clearing and Forwarding Association, Malawi Bureau of Standards, Malawi Investment and Trade Centre, Malawi Revenue Authority, Ministry of Transport and Public Works, Ministry of Agriculture and other government institutions. The ministry added that it is through these arms that the public is being sensitised. He further said that government is planning to sensitise the public even more during the Malawi International Trade Fair which will take place in May.
Recently the International Trade Centre, in its report on non-tariff barriers, said Malawi traders experience bottlenecks especially along Beira and Nacala corridors. The report said that most companies experienced substantial delays that vary between two weeks and three months.
The report noted that about a fifth of the interviewed companies had to pay charges to have their goods “escorted” from the border post to Beira or Nacala. While other companies pointed low levels of security of goods, particularly at Nacala resulting in damage to goods on several occasions, or even theft. Due to these bottlenecks the reports says some traders opt Durban despite being more than twice as far away as either port in Mozambique if these require timely delivery and are willing to pay the extra costs.
Technically NTBs refer to restrictions to trade that result from prohibitions, conditions, or specific market requirements that make importation or exportation of products difficult and therefore costly. NTBs also extend to include unjustified application of non-tariff measures such as sanitary and phyto-sanitary measures and other technical barriers to trade.
Specifically NTB may include import, quotas, discriminatory rules of origin, quality conditions Sanitary and phyto-sanitary conditions, regulatory environment, eligibility of an exporting establishment, additional trade documents, over-valued currency seasonal import regime and corrupt and lengthy customs procedures.
Thus, with quantitative barriers or tariff barriers on the decline across the three regions and globally, economies are sometimes tempted to use these technical barriers to protect local industries. That is, governments or any other authorities may use laws, regulations, policies, conditions, restrictions or specific requirements, and private sector business practices, or prohibitions that protect the domestic industries from foreign competition and hence defeating the whole purpose of trade liberalisation.