Home » Guide to Malawi's preferential trade agreements

GUIDE TO MALAWI’S PREFERENTIAL TRADE AGREEMENTS

Malawi’s International Trade Landscape

At a bilateral level Malawi maintains bilateral trade arrangements with South Africa (non-reciprocal), Zimbabwe, Botswana and Mozambique. Whereas at regional level the country is a member to Southern Africa Development Community(SADC), Common Market for Eastern and Southern Africa (COMESA) and currently is part of the Tripartite Free Trade Agreement negotiations. At a multilateral level Malawi is a member of the World Trade Organization, and Africa Caribbean and Pacific Group of States and the European Union (ACP-EU) Cooperation Agreement, where Economic Partnership Agreements (EPAs) are embedded.

Malawi’s Bilateral Trade Agreements
 

Zimbabwe, Mozambique, Botswana, Tanzania, South Africa, Kenya, China

1. Malawi-Zimbabwe Trade Relations
 
The Malawi-Zimbabwe Bilateral Trade Agreement was signed in 1995. The Agreement aims at removing tax barriers and other forms of the trade barriers in order to stimulate trade between the two countries. Goods imported from Zimbabwe into Malawi are given import duty free status. This is the same when one exports goods to Zimbabwe from Malawi.
 
What procedures should one follow in order to benefit from the agreement?
 
Malawi manufacturers are required to apply to the Malawi revenue Authority (MRA) and in their application they should list the goods they want to export for the Authority to verify if indeed the goods are originating from Malawi. MRA will then give the applicant an approval and thereafter notify the Zimbabwe Revenue Authority (ZRA) of the new manufacturer and their products.
 
How can goods qualify for duty free status?
 
First and foremost, for goods to qualify under this agreement, they should be wholly grown or produces in the two contracting parties. If the goods are not wholly produced then their domestic value addition should not be less than 25%.
 
The goods should be accompanied by the certificate of origin called Form 60 that is issued by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), and be duly endorsed by the manufacturer and certified by MRA.
 
Where a product is being exported by a person other than the original manufacturer, the certificate of origin shall be endorsed by the original manufacturer. It is also important to note that one should comply with the national standards of the two Countries (Malawi and Zimbabwe) for their goods to qualify under this facility.
 
In this context, we would like to urge the business community in the country to take advantage of the agreement by importing or exporting more goods to Zimbabwe at a lesser cost and improve their businesses.

Click here for a copy of the Malawi/Zimbabwe Bilateral Trade Agreement.

Top

2. Malawi-Mozambique Trade Relations

The Malawi-Mozambique Bilateral Agreement grants duty free access to goods originating from the two countries with the exception of goods listed in Annexe I  of the Agreement i.e. Exclusion List. The goods exempted include sugar, beer, coca-cola and other branded soft drinks, manufactured tobacco, refined edible oil, dressed chickens, table eggs, unmanufactured tobacco, stationary, petroleum products, firearms, ammunition, and explosives.

Mozambique is an important transit route for goods coming into Malawi as such the bilateral agreement also includes provisions for trade facilitation. 

Follow this link to view the certificate of origin for Malawi-Mozambique Trade.

3. Malawi-South Africa Trade Relations
 
Trade relations between Malawi and South Africa are historical. In 1967 the two countries signed a bilateral Trade Agreement to foster trade relations. The Agreement was re-negotiated and revised in 1990. The trade relations between the two countries are guided by the World Trade Organisation (WTO) Agreement and the Southern African Development Community (SADC) Trade Protocol.
 

The bilateral Trade Agreement is the major framework for the two countries' trade cooperation. It was negotiated as part of the support programmes by the Government of South Africa to assist in the economic development of Malawi. The agreement is non-reciprocal or asymmetrical. Malawi exports to South Africa are accorded duty-free treatment while imports from South Africa into Malawi are dutiable at the normal (Most-Favoured-Nation) rates applied to any other country.

South Africa is the major export market for Malawi in Africa accounting for over 35% of Malawi’s total exports. Major exports include tobacco, farm vegetables, rubber, oil seeds and fruit, clothing, and iron. Imports include fertilizers, pharmaceutical products, dairy products, mineral fuels, machinery, glassware, stationery, chemical compounds, motor vehicle and industrial spares.

Click here for the Malawi/ South Africa Trade Agreement.

Top

4. Malawi-Tanzania Trade Relations
 
Malawi and Tanzania trade relations are regulated by the World Trade Organization (WTO) Agreement and the Southern Africa Development Community (SADC) Protocol on Trade under the Most Favoured Nation Agreement. There is no Bilateral Trade Agreement between the two countries. However, Malawi and Tanzania established a Joint Permanent Commission of Cooperation (JPCC) in April, 1993 in Lilongwe, Malawi.
 
5. Malawi-Botswana Trade Relations
 
Malawi and Botswana’s trade relations are regulated by the World Trade Organization (WTO) Agreement, Southern African Development Community (SADC) Trade Protocol and a Customs Agreement of 1956. The latter allows entry of goods grown, produced or manufactured in either country duty-free, except potable spirits and spirituous liquors. Malawi’s major exports to Botswana include tobacco, tea, timber, plywood/block board, textiles and garments and cotton lint. Malawi imports wheat flour, salt, soda ash, plastic products and pharmaceutical products from Botswana.

 

Click here for the Malawi/Botswana Trade Agreement.

Click here to view Malawi-Botswana duty free Certificate of Origin.

Top

6. Malawi-Kenya Trade Relations
 
Trade relations between Malawi and Kenya are governed by the following multilateral and regional trade agreements to which both countries are signatories.
 
  • World Trade Organization (WTO) Agreement
  • Common Market for Eastern and Southern Africa (COMESA) Free Trade Area (FTA)
  • Africa Caribbean and Pacific Group of States and European Union (ACP-EU) Partnership (Cotonou) Agreement.

As members of the WTO, Malawi and Kenya share common interests in multilateral trade negotiations.

As members of COMESA , the two countries were among the first to join the Free Trade Area (FTA) on 31st October, 2000, and accord each other’s exports duty-free treatment.

Both Malawi and Kenya enjoy non-reciprocal duty-free market access in the EU market under the provisions of the ACP-EU Partnership Agreement.

  • Malawi’s major exports to Kenya include coffee, tea, spices, cereals, sugar, wood and articles. However, Malawi sugar exports to Kenya face non-tariff barriers such as standards and certification requirements.
  • Major imports from Kenya include pharmaceuticals, fertilizers, rubber articles, clothing, soaps and motor vehicle spares.

Top

7. Malawi-China Trade Relations

The Malawi-China Bilateral Trade Agreement sees goods from Malawi entering China duty-free. The Agreement allows duty free entry into China of Malawi's major exports such as tobacco, tea, sugar cane, coffee and legumes. Malawi’s trade volume with China hit US$100 million in 2012, a 400-percent jump from 2010.

Click here to view Malawi-China duty free Certificate of Origin.

Top

Regional Trade Agreements
 

Common Market for Eastern and Southern Africa (COMESA)
 
Malawi is a member of the Common Market for Eastern and Southern Africa (COMESA) which was established on 8th December, 1994 replacing the Preferential Trade Area (PTA). COMESA has a membership of nineteen countries. These are Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
 

The objectives of COMESA are designed to facilitate the removal of structural and institutional weaknesses of member states so that they are able to attain collective and sustainable development.

COMESA’s main vision is to establish a fully integrated and internationally competitive regional economic community with high standards of living for its entire people. One of the main objectives of COMESA is to achieve regional integration through trade and investment.

Click here for more information on COMESA Trade.

Click here for the COMESA Rules of Origin Certificate.

Top

Southern African Development Community (SADC) Trade Protocol
 
The Southern African Development Community (SADC) Trade Protocol was signed in 1996 to promote intra-regional trade in goods and services through reduction and eventual removal of tariffs and non-tariff barriers in the region. It was also aimed at enhancing economic development, diversification, and industrialization of the region.
 

The process of tariff reduction was agreed through a process of negotiations which were launched in 1996. Apart from tariff reduction, the negotiations also centered on rules of origin on product lines (product specific rules of origin). The implementation of the Protocol was launched in September 2000 after its ratification by two thirds of the member States.

Twelve SADC member states have been participating in tariff reduction under the SADC Trade Protocol. The countries are Botswana, Lesotho, Malawi, Namibia, Mauritius, Mozambique, Madagascar, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. The tariff reductions were aimed at establishing a Free Trade Area in 2008. As agreed the SADC Free Trade Area was established in January 2008. A formal function to launch the FTA was held in Johannesburg, South Africa in August 2008. Malawi has not reached the minimum threshold of 85% trade liberalisation which was agreed to be the minimum for the Free Trade Area. At the moment Malawi has liberalised 70% of her trade with SADC. Malawi is, therefore, part of the SADC FTA and is working on removing tariffs on the remaining products.

Click here for more information on SADC Trade integration process.

Click here for the Southern African Development Community (SADC) Certificate of Origin.

Top

Multilateral Trade Agreements
Multilateral Trade Agreements
 

World Trade Organization (WTO)
 
Malawi is a member of the World Trade Organization (WTO), a legal institution of the multilateral trading system promoting the negotiations for liberalization of trade in goods and services through removal of barriers to trade. The organization is also responsible for development of international trade rules and settlement of trade disputes. The WTO came into being on 1st January, 1995 (After the General Agreement on Tariff and Trade-GATT 1947).

Top
 

Trade with the European Union
 
Malawi is a party to the African Caribbean and Pacific (ACP) – European Union (EU) Partnership Agreement. Under the Agreement ACP countries enjoy duty-free market access to the European Union. Since its inception in the 1970s, the Agreement has been revised several times. The last revision was done in 2000 and a new agreement (Cotonou Agreement) was signed which introduced a requirement for ACP countries to offer reciprocal duty-free treatment to imports from the EU in line with the World Trade Organization rules.
 

Since 2002 ACP countries have been negotiating the new trade arrangements with the EU known as Economic Partnership Agreements. The negotiations are being done in regional configurations. Malawi is negotiating for an EPA under the Eastern and Southern Africa (ESA) configuration which comprise Burundi, Comoros, Seychelles, DR Congo, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Seychelles, Rwanda Sudan, Uganda, Zambia and Zimbabwe.

Meanwhile, Malawi is trading with the EU through the Everything But Arms a special arrangement for Least Developed Countries under the EU Generalised System of Preferences.

Top

African Growth and Opportunity Act (AGOA)

The African Growth and Opportunity Act (AGOA) is a United States Trade Act, enacted on 18th May, 2000 as Public Law 106 of the 200th Congress. AGOA has since been renewed to 2025. The legislation significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries. Qualification for AGOA preferences is based on a set of conditions contained in the AGOA legislation. In order to qualify and remain eligible for AGOA, each country must be working to improve its rule of law, human rights, and respect for core labor standards. Find the AGOA eligibility requirements here.

Malawi's major exports to the US under AGOA include agricultural products, followed by textiles and apparel products. Major US exports to Malawi include machinery, transport equipment, electronic goods and agricultural and forestry products.

For more information of rules of origin under the AGOA  framework, please follow this link.

Top