Recognizing the difficulties that a limited local market can cause investors, Botswana continues to promote commerce by negotiating free trade agreements with its neighbors as well as other developed and emerging countries.
Southern African Customs Union (SACU)
Botswana, along with South Africa, Lesotho, Namibia, and Eswatini, is a member of SACU. SACU is a duty-free zone with a single external tariff. Import permits are not required for products entering Botswana from other SACU members, except for some foodstuffs. Because Botswana is a member of SACU, investors can sell duty-free in the much bigger South African market. The SACU Secretariat, situated in Namibia, is in charge of implementing the SACU Agreement as well as enhancing the member states’ economic performance. The US-SACU Free Trade Accord was put on hold in April 2006, owing to disagreements over the scope of the agreement. The US-SACU Free Trade Accord was put on hold in April 2006, owing to disagreements over the scope of the agreement. Rather than a free trade deal, the US and SACU agreed to a Trade, Investment, and Development Cooperative Agreement (TIDCA), which would create a platform for consultative discussions on a variety of trade and investment problems. A Consultative Group will oversee the TIDCA’s implementation and provide a framework for working on a variety of interim trade agreements, cooperative initiatives, and other trade development milestones that will serve as the foundation for future free trade agreement discussions.
Southern African Development Community (SADC) Free Trade Protocol
Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, South Africa, eSwatini, Tanzania, Zambia, Zimbabwe, Angola, Democratic Republic of Congo, Seychelles, and Malawi are members of the SADC, which aims to follow a single integration agenda based on economic, political, and commercial interests. Although the SADC Free Trade Area (FTA) is in place, it has yet to be implemented. Botswana was one of the 12 SADC states to sign the FTA in August 2008. Angola and the Democratic Republic of Congo are the only countries that have yet to sign. Tariffs and non-tariff barriers on nearly all commerce between SADC members will be eliminated under the SADC FTA. Following the agreement of the SADC Trade Protocol in 2000, the FTA was implemented. 85 percent of commodities produced in the region will be able to cross borders duty-free thanks to the FTA. Different speeds of trade liberalization have occurred. Tariffs have been cut more quickly in the more developed member nations (South Africa, Namibia, Botswana, eSwatini, and Lesotho).
World Trade Organization
Botswana joined the World Trade Organization (WTO) in 1995 after joining the General Agreement on Tariffs and Trade (GATT)
SADC – EU Economic Partnership Agreement
Botswana and the European Union have signed an interim Economic Partnership Agreement (EPA) (EU). The EPA grants duty-free and quota-free access to EU markets for goods. Negotiations on the treatment of services and next-generation issues must be completed.
China and India
Botswana has begun free trade negotiations with both China and India as members of SACU. The parties involved in the negotiations have exchanged lists of commodities that would benefit from lower tariffs.
Mercosur
On December 16, 2004, SACU and Mercosur, the South American customs union, signed a Preferential Trade Agreement (PTA). Mercosur is made up of Argentina, Brazil, Paraguay, and Uruguay. The agreement establishes a legislative basis for stronger trade connections between SACU and Mercosur, as well as a first step toward the establishment of a free trade zone between the two countries.
African Growth and Opportunity Act
The African Growth and Opportunity Act (AGOA) of the United States, which has been extended through 2025 via the Trade Preferences Enhancement Act of 2015, benefits Botswana. The modification further extended the Generalized System of Preferences’ duty-free treatment. More than 6,500 product categories are granted duty-free and quota-free access to the US market under AGOA.
African Continental Free Trade Agreement (AFCFTA)
In February 2019, Botswana became the 51st country to sign the AfCFTA. The accord aims to create a unified continental market for products and services, with free movement of people and capital, clearing the way for the Continental Customs Union and the African Customs Union to be established faster.
