Zimbabwe, European Union Trade Doubles

Poster supporting President Mugabe of Zimbabwe outside the EU-Africa Summit in Lisbon on December 9, 2007. Mugabe blasted the "gang of four" European leaders for being agents of British imperialism., a photo by Pan-African News Wire File Photos on Flickr.

Zimbabwe, EU trade doubles

Friday, 30 March 2012 00:00
Martin Kadzere Senior Business Reporter
Zimbabwe Herald

TRADE between Zimbabwe and the European Union doubled during the past two years with the European trade bloc now looking at deepening economic ties with Harare, an envoy said yesterday.

EU trade with Zimbabwe amounted to US$860 million last year with a positive trade balance of US$271 million in favour of Zimbabwe.

“The EU is looking forward to further deepening relations with Zimbabwe, evolving in the longer term towards a partnership that includes trade and investment,” said the EU Ambassador to Zimbabwe Mr Aldo Dell’Ariccia.

He was addressing delegates during a business session held before the launch of industrial and trade policies by President Mugabe yesterday.

The EU is Zimbabwe’s second largest trading partner after South Africa.

Recently, the EU invited Zimbabwe to resume re-engagement talks to explore ways of normalising relations.

The invitation came at a time the European bloc has removed a number of individuals and companies from its illegal sanctions list.

But the EU extended sanctions on certain people and companies for another six months.

Mr Dell’Ariccia said the EU was working towards attracting the attention of business in Europe to explore trade and investment opportunities in Zimbabwe.

He said with the recent ratification of the interim Economic Partnership Agreement, Zimbabwe exports to EU would continue to enjoy the privileged duty-free and quota-free access.

Madagascar, Seychelles, Mauritius and Zimbabwe signed the EPA with the EU in August 2009.

The deal was a stepping stone towards a full and comprehensive EPA that continues to be negotiated and remains open to other Africa countries.

The agreement provides for safeguard clauses and an additional safety net that allows countries to take measures to protect their industries and strategic sectors, such as food security and rural development.

It would also facilitate access to EU technology and investment as well as access to technical assistance and capacity building in areas such as trade and private sector development.

In addition, the agreement will promote the diversification of value-added exports to the EU.

Mr Dell’Ariccia said the launch of the trade and industrial policies would ensure a conducive policy environment for investors to do business in Zimbabwe.

The trade policy seeks to increase export earnings by at least 10 percent, from US$4,3 billion last year to about US$7 billion in 2016.
It also seeks to promote value addition of primary commodities in all sectors and restoring the manufacturing sector’s contribution to export earnings, from the current 16 percent to 50 percent by 2016.

In addition, it would enhance trade facilitation to reducing trade flow barriers, consolidate existing export markets and provide guidance on trade policy instruments, such as tariffs, non-tariffs and trade defence mechanisms.
The industrial policy seeks to restore the manufacturing sector’s contribution to Gross Domestic Product, from the current 15 percent to 30 percent and contribution to exports from 26 percent to 50 percent in the next three years.

The targets are in line with the Medium Term Plan. Some of the objectives of the industrial policy are employment creation, increasing capacity utilisation to 80 percent, re-equiping industries and increasing manufactured exports to the Sadc region and Comesa.