LOCAL companies must ride on Preferential Trade Agreements (PTA) to boost exports and unlock economic benefits from Zimbabwe's stellar foreign relations trade promotion agency ZimTrade has said.
A PTA is a trading bloc that gives preferential access to certain products from the participating countries by reducing tariffs but not by abolishing them completely.
Benefits associated with these arrangements include learning effects, increased foreign investment, the provision of regional public goods such as transport networks.
Currently Zimbabwe has four operational bilateral trade agreements with Botswana, Malawi, Mozambique, and Namibia.
The Zimbabwe-Botswana trade agreement ratified in 1988 offers reciprocal duty-free trade on all products grown, wholly produced, or manufactured wholly or partly from imported inputs subject to a 25% local content requirement.
With Malawi, this is a reciprocal trade agreement that has been in place since 1995, with 25 percent domestic value-added requirements.
In Mozambique, the focus of the agreement that has been in place since coming into force in 2005 is to eliminate tariff and non-tariff barriers and to cooperate in customs and trade promotion.
Between Zimbabwe-Namibia, there has been a reciprocal agreement in effect since 1992, subject to rules of origin that require at least 25% local content for manufactured products and that Zimbabwe and Namibia should, as exporters, be the last place of substantial manufacturing.
Zimbabwe is also a signatory of several other Multilateral Trade Agreements within the region and across the continent.
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"In the case of Preferential Bilateral Trade Agreements, Zimbabwe offers, or is offered better trading arrangements with the contracting partner than any other country that does not have a bilateral Trade Agreement with either country.
"We have already published a Guide to Trade Agreements, which local companies can utilize to explore ways they can benefit from the agreements," said ZimTrade.
The agency said companies looking to grow their exports should therefore take advantage of preferential trade agreements as a marketing strategy to give their products a competitive price incentive to current and potential customers.
ZimTrade said to qualify under the bilateral and multilateral trade agreements it is necessary for the company or exporter to register with the Zimbabwe Revenue Authority (ZIMRA).
Preference is granted to goods that meet the Origin conferring criteria.
"The Origin conferring criteria is referred to as the Rules of Origin (RoO), which is defined as a set of criteria that is used to distinguish between goods produced within territories of the states that are members to the agreement in question," added ZimTrade.
