Ministry promotes liberalisation of trade services

country’s trade services in anticipation that the sector will play a big role in economic growth.
This was said by the director of international trade in the Ministry of Industry and Commerce, Mrs Beatrice Mutetwa, at a Zimbabwe National Chamber of Commerce-hosted event on trade in services recently.
“Services are currently a significant contributor to Gross Domestic Product across the globe and we believe they can play a greater role in the local economy.
“There have been developments taking place internationally and in the region at tripartite level, although negotiations are yet to commence. Zimbabwe has proposed an increase in the liberalisation of six sectors,” she said.
Mrs Mutetwa, however, said it was not possible for the country to fully liberalise its trade in services insofar as it would suffer from the increased competition.
“We cannot open up all our service sectors because we would not be able to compete against the flurry of imported services,” she said.
The services sector is an increasingly important part of the trade of almost all economies.
Observers contend that services such as finance, communication, and transport provide vital inputs to manufacturing and agriculture and can help promote growth and development in an economy.
Speaking at the same event, Zimbabwe Economic Policy Analysis and Research Unit director Dr Gibson Chigumira said liberalisation of trade services offered countries such as Zimbabwe to “leap frog in development”.
Currently, there are negotiations in both Common Market for Eastern and Southern Africa and Southern African Development Community to liberalise trade in services.
However, as much as there are benefits to be accrued from increased liberalisation of trade in services, developments in this area also pose a number of threats to local economies.
A number of studies have shown that current trade liberalisation rules and policies have led to increased poverty and inequality.
For instance, a 2001 United Nations Conference on Trade and Development study revealed that the poorest 49 countries which make up 10 percent of the world’s population, account for only 0,4 percent of world trade, and the disparity is growing.
Zimbabwe is in the process of reviewing the proposed roadmap and timelines for trade in services negotiations in view of the minimum liberalisation proposals to be made by Zimbabwe based on the General Agreement on Trade in Services commitment, which is meant to extend the multilateral trading system to the services sector.
ZNCC president Mr Trust Chikohora has noted the need to ramp up opening up of economies at the regional level especially in respect of the services sector.
“Regional liberalisation of the services sector will assist improve efficiency and increase benefits of the removal of obstacles to free movement of services in the region.
“The services sector presently accounts on average for around 50-60 percent of Gross Domestic Product in Comesa,” he said.
Meanwhile, statistics from the Zimbabwe Investment Authority show that the service industries attracted US$106 million in investment during the first three months compared to US$5 million in the corresponding period last year, a 2 000 percent increase.