European Union External Action

EU Statement by Ambassador João Aguiar Machado at the Trade Policy Review of Zimbabwe, 30 September 2020

Geneva, 30/09/2020 - 00:00, UNIQUE ID: 200930_9
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On behalf of the EU, I would first like to welcome the delegation of Zimbabwe led by Hon. Dr. David Musabayana, Deputy Minister of Foreign Affairs and International Trade. I would also like to thank the WTO Secretariat and the government of Zimbabwe for their reports and the Discussant, Her Excellency Ms. Xolelwa Mlumbi-Peter (Ambassador of South Africa) for her views.

The original planned date for this TPR in March was postponed due to the COVID-19 pandemic, which continues to impact citizens across the world and all sectors of the economy and trade due to closure of borders, suspension of flights and the disruption of demand and supply value chains and Zimbabwe is no exception.

Mr. Chairman, trade is an important component of the EU – Zimbabwe bilateral relationship. In 2018, Zimbabwe's exports to the EU were EUR 455 million and imports from the EU were EUR 232 million, giving a trade balance of EUR 223 million in favour of Zimbabwe. There is potential to increase the volume of trade further as the current trade with the EU is only 5% of total trade.

There have been some significant developments in the trade relations between Zimbabwe and the EU since the last TPR, notably the ratification by Zimbabwe of the Economic Partnership Agreement (EPA) in 2012. While the EU continued to give 100% access to the EU market to goods originating from Zimbabwe on a duty-free quota-free basis, Zimbabwe committed to start a gradual process of liberalising tariffs for EU goods and is expected to have fully liberalised 80% of its trade with the EU by 2022.

After 8 years of implementing the trade agreement with the EU, Zimbabwe and its Eastern and Southern Africa partners[1], have begun negotiations aimed at deepening the scope of the EU-ESA EPA by including chapters on services and investment, sustainable development, technical barriers to trade and rules of origin. We commend Zimbabwe for its positive and constructive role in the negotiations.

I would also like to congratulate Zimbabwe on the signing and ratification of the WTO Trade Facilitation Agreement in 2018 and notifying Categories A, B and C commitments. Another important development is the ratification by Zimbabwe of the African Continental Free Trade Area (AfCFTA) in 2019, which is an ambitious flagship project of the African Union aimed at creating the biggest free trade area on the planet in terms of participating countries. The EU stands ready to support Zimbabwe, the African Union and all the other member states in this process.  

The EU – Zimbabwe development cooperation relationship has improved since the last review. The lifting of appropriate measures in 2014 paved the way for Zimbabwe to receive development assistance from the EU amounting to EUR 287 million financed through the 11th European Development Fund (EDF), targeting mainly health, agriculture-based economic development and governance/institutional building.

At the time of the last review in 2011, economic reforms and sound macroeconomic policies lead to economic stability and growth. However, since 2013 persistent structural challenges have led to a relatively moderate GDP growth. In 2019, Zimbabwe experienced a serious economic and humanitarian crisis and the economy is said to have shrunk by 7.2% (IMF). The economy is forecast to shrink further by 7.4% in 2020. The shortage of electricity, fuel and foreign currency have resulted in a massive decrease in industrial production and climate shocks (including the devastating impact of cyclone Idai) have dampened agriculture production.

A number of policy inconsistencies, absence of substantial progress on planned reforms and high level of corruption have prevented Zimbabwe from regaining the confidence of its citizens and international community. A direct consequence was the discontinuation of the IMF staff monitored programme in early 2020. It is essential that the government continues to pursue its stated reform agenda both to stabilize and to reinvigorate the economy and improve governance.

The EU welcomes the stated intentions of the current government to rebuild confidence by restoring private property rights, ensuring macroeconomic stability and growth, achieving fiscal consolidation, clearing external debt arrears, and improving governance and the business environment. These priorities are well reflected in the Transitional Stabilisation Programme (December 2018 - December 2020), which will be succeeded by five-year Development Plan (2021–2025) and hopefully will follow up and consolidate the reforms initiated under the TSP.

EU believes that with Zimbabwe's massive resources of abundant land and natural resources, educated and skilled human capital base, and existing physical infrastructure, Zimbabwe has great potential to regain its position as one of the leading economies in Southern Africa. We wish the delegation of Zimbabwe a very successful TPR.

 

[1] ESA5: Comoros, Madagascar, Mauritius, Seychelles and Zimbabwe

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