By Kingsley Jassi:
Malawi’s trade prospects with the United States of America USA) a faces uncertainty following hints by president elect Donald Trump to scrap preferential trade facilities if re-elected.
Trump announced on social media he would introduce an External Revenue Service from January 20 2025, targeting countries benefiting from USA trade.
“We will begin charging those that make money off us with trade and they will start paying, finally, their fair share,” Trump said.
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The development comes as the Africa Growth Opportunity Act (Agoa), which provides duty-free access to US markets, is due for renewal in September this year for another 20 years.
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Trade expert Fredrick Changaya said on Thursday the situation should prompt Malawi to reduce dependency on preferential trade arrangements.
“Policy framers must wake up and Malawi must industrialise. But we cannot industrialise if we depend on benevolence. Despite these preferential trade deals, the country is at war with the world and we must be vigilant by exploiting opportunities with the goal to improve terms of trade,” Changaya said.
He urged the country to attract investors in value addition, particularly in minerals like rutile, graphite and rare earths required in high-tech industries.
“A country cannot develop with commodity exports. We need to negotiate deals that promote industrialisation. We must attract investors to use our raw materials here and export finished or semi-processed products,” Changaya said.
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Latest trade figures show Malawi exported goods worth $37.6 million to the USA against imports of $24.9 million in the first 10 months of 2024.
The country’s exports to the USA reached $44.6 million in 2023 against imports of $18.1 million, but remained below Zambia’s $153.3 million exports and Malawi’s own record of $115.5 million in 2005.
Ministry of Trade officials could not be reached for comment on the development.
The ministry recently announced plans to review the country’s Agoa performance following years of underutilisation of the facility.
