ZIMBABWE is not benefiting from multilateral trading systems due to imbalances between exports and imports that have resulted in the trade deficit widening, a senior official has said.The Permanent Secretary in the Ministry of Industry and Commerce, Abigail Shonhiwa, told delegates who attended the international business conference at the Zimbabwe International Trade Fair on Wednesday that standards and quality assurance were critical towards reversing the trade deficit.
In a speech read on her behalf by the director of standards and quality assurance in the Ministry of Industry and Commerce, Florence Makombe, Shonhiwa said the major role of the Multilateral Trading System was to address global public policy objectives.
“Currently, Zimbabwe is on the receiving end of imports despite being unable to expand exports due to production constraints and a widening trade deficit. This is contrary to the multilateral trading system’s major thrust of helping countries build economic capacity by regulating commercial trade relations through rules that are balanced and designed to benefit developing countries,” she said.
Shonhiwa said the multilateral trading system’s role was to ensure price stability, fair terms of trade for developing countries’ products and permitting differential treatment to countries at different levels of economic development.
“Furthermore, export earnings are uncertain due to the absence of physical and technological infrastructure needed to make the country’s exports competitive. Our exports are dominated by primary products for which there has been a secular decline in world prices leading to worsening terms of trade,” she said.
Shonhiwa called for a re-orientation of the export sector towards value added products to improve exports.
“Without a re-orientation of the export sector towards value addition, trade negotiations for Zimbabwe will merely remain negotiations without tangible benefits for the economy,” she said.
Shonhiwa also noted that many tariff and non-tariff barriers were threatening the multilateral trading systems and integration in the region.
“This is one of the major reasons why Africa’s share of world trade is still less than 3.5 percent. If these barriers are addressed there is great potential for enhanced trade for developing countries,” she added.
Shonhiwa said although multilateral trading platforms and trade negotiations offer opportunities for Zimbabwe, there were other challenges such as liberalisation.
“One of the major issues to be considered is the state of our industry and the economy at large. The Zimbabwean economy is ailing with capacity utilisation for industry below 40 percent. There’s also deflation among other challenges,” she said.