Trade Policy Review of Mozambique
U.S. Statement delivered by Christopher Wilson,
Deputy Chief of Mission/Chargé d’affaires a.i.
May 3, 2017
Thank you, Chair. The United States would like to extend a very warm welcome to the Honorable Minister Tonela and to welcome the entire delegation from Mozambique on the occasion of Mozambique’s third WTO Trade Policy Review.
We appreciate the reports of the Government of Mozambique and the WTO Secretariat. Each describe the various challenges that Mozambique must overcome and the questions it must 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.
Since Mozambique’s last trade policy review in 2009, it has continued to witness economic growth, averaging about 7 percent since 2009, despite a slowdown beginning in 2015. As the Secretariat’s report points out, lower global demand and prices for key commodity exports like natural gas and coal in 2015, coupled with reductions in foreign direct investment and official development assistance have all contributed to a challenging economic environment in Mozambique which continues into this year.
In addition, as the Secretariat’s report points out, the business environment in Mozambique remains challenging. While improvements have been made and various reform efforts have been undertaken, we agree with the Secretariat’s report that there is significant scope to improve the business environment, including greater public participation in the legislative process, reducing unnecessary and inefficient government bureaucracy, and rooting out corruption. But we also recognize the Government of Mozambique’s efforts to implement reforms aimed at facilitating trade to help boost the country’s competitiveness and diversify its economy to the benefit of Mozambique and U.S. businesses alike.
The United States enjoys a vibrant bilateral trade relationship with Mozambique, with two-way goods trade totaling $275 million in 2016. Mozambique is eligible for trade preferences under the African Growth and Opportunity Act (AGOA), which has been extended through 2025. In recent years, substantially all U.S. imports from Mozambique have entered the United States duty-free, under the Generalized System of Preferences (GSP) and AGOA.
During the period of review, Mozambique exported a very limited number of products to the United States under the provisions of AGOA. We encourage the Government of Mozambique to develop an AGOA utilization strategy to take better advantage of the program, as called for in the latest AGOA legislation.
In this regard, we are pleased to note our partnership with Mozambique under Trade Africa, which is an initiative aimed at increasing African regional trade as well as trade with the United States. Under our Trade Africa partnership with Mozambique, we look forward to continuing to work with the Government of Mozambique to increase bilateral trade, including under AGOA, and to help improve Mozambique’s capacity to boost regional trade. We are also pleased to note that the fourth United States-Mozambique Trade and Investment Framework Agreement (TIFA) Council Meeting, held in November 2016, focused on these and other efforts to enhance our trade and investment relationship.
We are also pleased to note that Mozambique has been involved in two other major initiatives related to economic growth and development since the last review: the Millennium Challenge Account, administered by the Millennium Challenge Corporation (MCC), and Feed the Future, the United States’ global hunger and food security initiative. The $507 million MCC compact, which concluded in 2013, helped farmers improve crop yields, formalize land titles, rehabilitate roads, and update water and sanitation systems. Mozambique is also a partner in the U.S. Feed the Future Initiative, which aims to decrease hunger and poverty by improving food security. We look forward to our work and increased cooperation with Mozambique as it moves forward to boost its food security.
With others, we enthusiastically commend Mozambique’s ratification of the WTO Trade Facilitation Agreement (TFA), noted in the Secretariat’s report. The TFA will set the stage for more efficient customs and border procedures and coordination in Mozambique. Yet, as the Secretariat’s report points out, Mozambique continues to require the use of customs brokers and pre-shipments inspections, both of which we note are prohibited under the TFA. We stand ready to work with Mozambique to ensure its timely implementation of and compliance with the agreement.
We agree with the Secretariat’s report that Mozambique’s participation in the international trading system remains limited. We encourage Mozambique to continue to work towards establishing a transparent trade policy process that will allow for more proactive engagement here in Geneva, recognizing the capacity challenges that Mozambique faces. We also encourage Mozambique to continue efforts to improve implementation of the WTO agreements, including the Customs Valuation, Sanitary and Phytosanitary (SPS), and Technical Barriers to Trade (TBT) Agreements.
Finally, we note that African leaders at the African Union Summit in July 2016 agreed to finance 25 percent of the cost of African Union peace support operations by imposing a 0.2 percent levy on selected imports. The United States wishes to reaffirm our expectation that any trade-related funding activity be transparent and WTO consistent. We would encourage Mozambique to engage with WTO Members in Geneva about their plans for implementation, and submit a detailed, country-specific implementation plan to the WTO Council on Trade in Goods prior to the implementation of any trade-related funding measures. We count on the support of your government in achieving full transparency and upholding WTO commitments.
We have submitted a number of questions and look forward to reviewing the responses.
To conclude, the United States stands ready to work with Mozambique, and appreciates the opportunity to participate in this review of Mozambique’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.