Import and export licenses are only necessary for a few products that have an impact on security, health, food self-sufficiency, and the protection of newborn industries in Malawi. Malawi has been establishing trade agreements with foreign nations on a bilateral, regional, and multilateral basis since independence, to increase market access for Malawian exports.
Malawi is a signatory to several bilateral and international trade agreements and benefits from them. The African Free Trade Zone, the Common Market for Eastern and Southern Africa (COMESA), the Trade Protocol of the Southern Africa Development Community (SADC), the Cotonou Agreement between the European Union (EU) and African, Caribbean, and Pacific (ACP) countries, and the United States-African Growth Opportunity Act (US-AGOA) initiative for concessional exports to the US market is among them. Malawi also signed but has yet to ratify the African Continental Free Trade Area (AfCFTA) agreement. Malawi has bilateral trade and customs agreements with South Africa, Zimbabwe, Malaysia, Mozambique, India, and China, as well as a customs agreement with Botswana.
Zambia and Tanzania are now in the process of negotiating new accords. These, together with other programs like the Growth Triangle and the Spatial Development Initiative, provide significant prospects for growing trade and investment and encouraging growth in the region.
Cotonou Agreement
The Cotonou Agreement, which was signed on June 23, 2000, establishes a framework for European Union (EU) collaboration in the economic, social, and cultural development of African, Caribbean, and Pacific countries, including Malawi. It was first implemented in 2003 and then amended in 2005 and 2010.
The Cotonou Agreement aims to reduce poverty and eventually eliminate it while also contributing to long-term growth and the gradual integration of ACP countries into the global economy. Through the International Criminal Court, the amended Cotonou Agreement also addresses the battle against impunity and the promotion of criminal justice.
Tripartite Free Trade Agreement
The proposed African free trade agreement involving the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), and the East African Community (EAC) is known as the Tripartite Free Trade Area (TFTA).
The agreement was signed in Egypt on June 10, 2015, and will be announced at the 25th African Union Summit in South Africa. Malawi is a signatory to the pact as well.
The United States-African Growth Opportunity Act (US-Agoa) Initiative For Concessional Exports to The Us Market
The African Growth and Opportunity Act (AGOA) was signed into law in May 2000 to increase US trade and investment with Sub-Saharan Africa, stimulating economic growth, encouraging economic integration, and easing the continent’s integration into the global economy. The Act creates the annual United States-Sub-Saharan Africa Economic Cooperation Forum (also known as the AGOA Forum) to foster high-level communication on trade and investment problems. Significant trade privileges, together with those under the Generalized System of Preferences (GSP), are at the heart of AGOA, allowing practically all marketable goods produced in AGOA-eligible countries to enter the United States duty-free.
The United States determines whether sub-Saharan African countries are eligible for AGOA benefits on an annual basis based on progress toward establishing a market-based economy, rule of law, poverty-reduction policies, protection of internationally recognized worker rights, and efforts to combat corruption. Malawi is eligible for AGOA as of January 1, 2020, as well as textile and clothing benefits.
A Trade and Investment Framework Agreement (TIFA) was signed in 2001 between the United States and the Common Market for Eastern and Southern Africa (COMESA), which includes Malawi. AGOA has aided in the expansion of two-way trade between Sub-Saharan Africa and the United States since its start.
Malawi was ranked as the 176th largest goods trading partner in 2018, with total (two-way) goods trade of $74 million. Exports of products totaled $17 million, while imports of goods reached $57 million. In 2018, the United States goods trade deficit with Malawi was $39 million. Aside from that, in 2015, US commodities exports to Malawi supported an estimated 1 hundred jobs.
