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TRADE POLICY REVIEW OF ZAMBIA
October 23, 2002 Ambassador Linnet F. Deily United States Opening Statement
The policies of the United States toward Zambia are based on firm commitments to the sustainable economic growth and development of least developed countries in Africa and elsewhere. To that end, we supported debt relief for Zambia under the Heavily Indebted Poor Countries (HIPC) Initiative. Between 2001 and 2003, Zambia will see its debt servicing requirements decline from $600 million to $165 million per year. Through the United States Agency for International Development (USAID), we have also provided more than $45 million in bilateral assistance in fiscal year 2002 to help increase the incomes of poor rural Zambians, improve the country's education and health systems, and increase citizen participation in the country's democratic processes. The United States is pleased that Zambia is beginning to take advantage of its benefits under the African Growth and Opportunity Act (AGOA). In 2001, the United States imported a variety of Zambian products under this initiative, including agricultural goods, forest products, and minerals and metals. As a beneficiary of AGOA's textile and apparel provisions, we also understand that Zambian textile producers are supplying inputs to apparel manufacturers in Botswana and other parts of sub-Saharan Africa. We will continue to work with the Government of Zambia to ensure that the country can take full advantage of AGOA. Zambian government and private sector officials have participated in a number of U.S. AGOA training and technical assistance seminars, including our March 2002 event in Uganda. The Government of Zambia has worked to promote economic growth, improve its investment climate, and create commercial opportunities for its citizens in the face of significant challenges - including the fifth highest rate of adult HIV/AIDS infection in the world, severe food shortages, poverty and unemployment. The Government's 1991 structural adjustment program and its 1996 Enhanced Structural Adjustment Facility (ESAF) laid the foundation for GDP growth of 5.2 percent in 2001. Since its last review in 1996, the Government has continued its privatization program - privatizing 254 state owned enterprises out of a portfolio of 280. Membership in the African Trade Insurance Agency, full implementation of the Export Processing Zone Act, and participation in regional integration through the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) should help Zambia improve the terms of trade finance and further expand its exports. We welcome Zambia's efforts to comply with WTO standards and to integrate itself more fully into the global trading system. The Government of Zambia recognizes the important role that trade can play in economic development, and has worked to liberalize exports and imports and to ensure efficient customs administration and fair trade practices. Importantly, the Government has eliminated quantitative restrictions, ended mandatory pre-shipment inspection, and revoked the country's 5 percent import declaration fee. Mr. Chairman, the Government's submission and the Secretariat's report clearly reinforce Zambia's need to diversify its economy and create opportunities to further add value to its commodities locally. The mining and quarrying sector, for example, still accounts for roughly 70 percent of merchandise exports, and low copper prices have led to declines in production, investment and economic growth. The questions that we have submitted reflect our belief that a small economy like Zambia's can only achieve sustainable growth through more open trade and integration into the global economy. We are interested, for example, in clarifying the Government of Zambia's statement at the August 2, 2002 meeting of the Negotiating Group on Non-Agricultural Market Access to the effect that that least-developed countries with weak industrial bases should be exempted from obligations to further liberalize industrial tariffs in the current round of negotiations. We note that Zambia has so far bound just 3.6 percent of its tariff lines, and at a level that is well above current applied rates. Maintaining this policy would keep the price of imported manufacturing inputs high and hinder Zambia's efforts to diversify its economy and strengthen its industrial base. Moreover, it appears to run counter to the Government's 2002 Budget Speech, in which the Government stated its intention to reclassify and re-categorize manufacturing inputs, with a view to lowering duty rates. We offer these questions and comments in a sincere and constructive spirit. Mr. Chairman, before concluding, the United States also wishes to clarify the record concerning the treatment of agricultural products under the African Growth and Opportunity Act. We feel the statements made in paragraph 17 of the Government's report and in paragraph 56, part II of the Secretariat's report are misleading, suggesting that " Zambian products which do not meet U.S. SPS requirements are 'not on the AGOA list'." In fact, substantially all products from Zambia are "on the AGOA list" and eligible to enter the United States duty-free, including vegetables. However, those agricultural products that are subject to SPS requirements must first meet those requirements before entering the United States. Those requirements apply equally to products of Zambia and other countries. They are scientifically-based and established to protect human, animal, or plant health. They are not designed to restrict trade and are not used for that purpose. We will continue to work with the Government of Zambia to support their efforts to increase agricultural trade and meet U.S. SPS requirements. We look forward to a constructive dialogue with the delegation from Zambia during this trade policy review process. Thank you. |