WTO Trade Policy Review of Malawi
Statement delivered by Ambassador Michael Punke,
U.S. Permanent Representative to the World Trade Organization
April 27, 2016
Thank you, Chair. The United States would like to welcome Secretary Chiunda and his entire delegation on the occasion of Malawi’s third WTO Trade Policy Review.
We appreciate the Government of Malawi and the WTO Secretariat’s reports. Each describes the various challenges that Malawi must overcome and the questions it much address in order to achieve more effective participation in the global trading system, and to use trade as an instrument for realizing greater economic growth and development.
Malawi has made noteworthy progress since its last trade policy review in 2010. It has continued to witness economic growth – averaging 5.9 percent since 2010 despite a marked slowdown in 2012. The government of Malawi continues to take measures to address food security and to promote greater agricultural productivity, especially among small-holder farmers. We commend the government of Malawi for its focus on developing and adopting strategies through the Malawi Growth and Development Strategy to reduce poverty through sustainable, private-sector driven economic growth, and infrastructure development.
The United States enjoys a vibrant bilateral trade relationship with Malawi, although trade has waned in recent years. Two-way United States-Malawi goods trade totaled $92 million in 2015 – a 13 percent decrease from 2013 and a 15 percent decrease from the last review, mainly due to a decline in tobacco exports to the United States. Malawian exports of certain agricultural and textile products, including apparel, are also eligible for duty-free and quota-free access to the United States market under the African Growth and Opportunity Act (AGOA), which has been extended through 2025. In recent years, substantially all U.S. imports from Malawi have entered the United States duty-free, either under AGOA, the Generalized System of Preferences (GSP), or zero-duty most-favored-nation provisions.
Malawi exports a wide variety of products to the United States under the provisions of AGOA and GSP, including tobacco, rice, tea, sugar, and cotton. At the same time, we recognize that the government of Malawi wants to find ways to increase its utilization of AGOA and GSP trade preferences and to further diversify its trade with the United States. We note with interest, from the government’s report for this review, that the Malawi Ministry of Industry and Trade finalized the National Export Strategy of 2011, which aims to improve export competitiveness by promoting exports in three identified product clusters – oilseeds, sugar cane, and manufactures.
We encourage the government of Malawi to develop strategies to take better advantage of AGOA and in this connection, we would be happy to consult with the government of Malawi on its plans for implementing these strategies. We are committed to working with Malawi not only to help it make greater use of the benefits of AGOA to increase bilateral trade, but also to help it improve its capacity to boost regional trade and make the most of the opportunities afforded by its membership in the WTO.
We are also pleased to note that Malawi is involved in two major initiatives related to economic growth and development: the Millennium Challenge Account, administered by the Millennium Challenge Corporation (MCC), and Feed the Future, the United States’ global hunger and food security initiative. In 2011, Malawi signed an MCC compact, which entered into force in 2013. The $350 million compact will help revitalize Malawi’s power sector and improve the availability, reliability, and quality of the power supply. Malawi is also a partner in the U.S. Feed the Future Initiative, which aims to decrease hunger and poverty and improve food security. We look forward to continuing our work and increased cooperation with Malawi as it moves ahead to boost its food security.
We recognize and commend Malawi’s efforts to improve its customs services in order to streamline the number of procedures required and reduce the time to trade across borders, as noted in the Secretariat’s report. We note that progress has been made on establishing a national single window, which is expected to come online in 2016, as well as the establishment of one-stop border post initiatives at six border crossings. We also commend Malawi’s efforts to establish a national trade facilitation committee, as noted in the Secretariat’s report.
As the Secretariat’s report points out, Malawi has yet to ratify the WTO Trade Facilitation Agreement (TFA), but note that its ratification process is in its final stages. The TFA would set the stage for more efficient customs and border procedures and coordination in Malawi, and would encourage Malawi to ratify and implement the agreement as soon as possible. The United States stands ready to work with Malawi to ensure its timely implementation of the agreement.
We agree with the Secretariat’s report that Malawi’s participation in the multilateral trading system remains limited. We encourage Malawi to continue to work towards establishing a transparent trade policy process that will allow for more active engagement in the multilateral trading system and more follow-up on multilateral issues, recognizing the capacity challenges Malawi faces. We agree with the Secretariat’s report that Malawi would benefit from a simplification of import procedures relating to standards and technical regulations, and we encourage Malawi to continue efforts to improve implementation of the WTO agreements, including the SPS and TBT agreements.
We were disappointed not to see Malawi’s responses to our questions prior to the commencement of this TPR. We understand that the responses were received by the Secretariat only early this morning. We have observed similar delayed responses in connection with other recent TPRs. In the view of the United States, this is one of a number of issues that could benefit from review in the context of a new appraisal of the TPRM.
To conclude, the United States stands ready to work with Malawi, and appreciates the opportunity to participate in this review of Malawi’s trade policy. We look forward to our dialogue with the government, both within the WTO and on a bilateral basis.
Thank you, and we wish you a successful Trade Policy Review.