Malawi is vying in the category of 70 developing nations earmarked for preferential trade treatment through the United Kingdom (UK)’s new Generalised Scheme of Preferences (GSP).
Following Brexit, an interim framework has guided trade between the UK and developing countries since January 1 2021.
But a UK GSP Consultations Report by Chancellor college-based economist Ronald Mangani shows that moving beyond the interim arrangement, the UK is preparing its own more permanent trading framework with developing countries including Malawi.
The overall key policy proposals include maintaining zero-tariff on UK imports, simplifying rules of origin requirements, amending the approach to goods graduation and amending the conditions and reporting requirements that enable partners to benefit from more generous provisions through the enhanced framework.
“From the UK’s perspective, more access to imports from developing countries will increase choice for UK consumers and industries. The current interim scheme implies that UK importers pay lower (often zero) tariffs on goods from 70 developing countries,” reads the report.
Lately, the Ministry of Trade through the Trademark East Africa Malawi Country Programme has been consulting the local industry and creating awareness on how to leverage on the available UK market.
The government feels the schemes are fundamental broadening market base for local products.
Deputy Director responsible for Foreign Trade in the Ministry of Trade Mufa Munthali said in an interview recently that the government considers the proposal by the UK as a tremendous opportunity for Malawi.
“This provides a window of opportunity for Malawi to understand what the UK is proposing, to participate in the process and provide a wider market for Malawi,” he said.
Malaŵi’s exports to the UK are predominantly agricultural produce and products, with tea and and toordhall topping the list
Trade Mark East Africa Economic Adviser for Malawi Victor Banda said, while the instruments were non-negotiable, Malawi stands a better chance of reaping from the available UK market.
He, however, said there was a need for improved quality to satisfy demand in the UK market.
“What the UK has done is, largely, to maintain the preferences that were enjoyed under the EU; everything but arms, for example,” Banda said.
Private sector players feel there is a need for wide awareness on the provision if they were to tap from the available market.
Both the EU and UK remain Malawi’s important markets, as the country has a positive trade balance with them.
In 2020 for instance, some 12 EU member states (excluding the UK) were among Malaŵi’s 50 export markets.
While the 50 markets accounted for 98.1 percent of Malaŵi’s exports, the 12 EU countries took up some 37.4 percent of the exports. Belgium is Malaŵi’s largest of all export markets, accounting for 20.8 percent of total exports, followed by South Africa (6.2 percent) and the UK (6.0 percent).