Note: Advance written questions by WTO Members and replies provided by the Government of
Zambia are reproduced in document WT/TPR/M/106/Add.1 and will be available online
at:  http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.WORLD TRADE
ORGANIZATIONWT/TPR/M/106
17 January 2003
(03-0249)
Trade Policy Review Body
23 & 25 October 2002
TRADE POLICY REVIEW
ZAMBIA
Minutes of Meeting
Chairperson:  H.E. Ms. Amina Chawahir Mohamed (Kenya)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3II. OPENING STATEMENT BY THE REPRESENTATIVE OF ZAMBIA 4III. STATEMENT BY THE DISCUSSANT 6
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 9
V. REPLIES BY THE REPRESENTATIVE OF ZAMBIA AND ADDITIONAL COMMENTS 13VI. CONCLUDING REMARKS BY THE CHAIRPERSON 15WT/TPR/M/106
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of Zambia was held on 23 and 25 October 2002.  The
Chairperson (H.E. Mr. Faizel Ismail) welcomed the delegation of Zambia, headed by
H.E. Mr. M.B. Bowa, Ambassador of Zambia, and the discussant Mr. Masato Kitera (Japan).  As
usual, the discussant would speak in his personal capacity and, in accordance with establishedprocedures, he had made available in advance a broad outline of the themes he intended to raise
(document WT/TPR/D/85).
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The Report by the Government of Zambia was contained in document
WT/TPR/G/106 and that of the Secretariat in docum ent WT/TPR/S/106.  Copies of advance written
questions, submitted by the Japan;  Canada;  the European Union;  Norway;  and the United States,
had been transmitted to the delegation of Zambia. These questions, and replies provided by therepresentative of Uganda, are reproduced in WT/TPR/M/106/Add.1.WT/TPR/M/106
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF ZAMBIA
3. The representative of Zambia affirmed his country’s commitment to the  multilateral trading
system and expressed Zambia’s belief that mechanisms such as the TPR accorded his country  an
opportunity for a transparent and collective evaluation of its economy, which in turn assisted it in
taking stock of its policies.
4. Since its last TPR, in 1996, Zambia had continued to pursue economic policies aimed at
achieving the twin goals of sustained economic growth and poverty reduction. The main measures
undertaken to achieve these goals included:  (i) stabilization measures aimed at establishing and
maintaining internal and external balance;  (ii) stru ctural adjustment measures to strengthen the basis
for a more diversified, market-based, outward-oriented economy;  and (iii) social sector policies
aimed at poverty reduction and human resource development.  These measures were aimed at
achieving the stated goals through the creation of a competitive and productive economy driven byprivate sector initiative.
5. Notable developments highlighted by the representative were, firstly, the privatization
programme, which commenced in 1993.  To date 254 companies had been privatized;  the biggest
milestone was the sale of the Government's largest asset, the Zambia consolidated copper mines, in
March 2000. Secondly, Zambia had established the Zambia Competition Commission and the EnergyRegulation Board, which were reported to be in process at Zambia’s last TPR.  Thirdly, export
procedures had been further streamlined through the harmonization and simplification of various
documents, such as the introduction of a single customs declaration form in 1997.  Furthermore, the
compulsory preshipment inspection and import declaration fees had been abolished.  Lastly, at the
regional level, Zambia continued to participate actively in the liberalization programmes of theCommon Market for Eastern and Southern Africa (COMESA) and the Southern African Development
Community (SADC).  A joint task force had been established by member Heads of Governments of
both of the agreements to identify areas for harmonization and to deal with any possible complications
arising from this dual membership.
6. Zambia was a signatory to the Cotonou agreement and, a beneficiary of the "Everything But
Arms" (EBA) initiative of the European Union, under which it had interest in the export of sugar.
Zambia was also one of the beneficiary countries under the "African Growth and Opportunity Act"
(AGOA) of the United States, from which Zambia was keen to derive maximum benefits. The
representative commended both the European Union and the United States for these initiatives
towards countries like Zambia with special difficulties.  He welcomed the intention expressed by
other countries to undertake similar initiatives.
7. The representative pointed out that although liberalization might offer opportunities, it also
had its downside:  Zambia’s privatization progra mme had not realized the anticipated FDI inflows,
and several companies had closed due to unfair competition from abroad.  In addition, the withdrawal
of one of the major investors in the mining industr y  had led to a downward re vision of growth targets
over the medium term, and posed a major concern for Zambia’s economic prospects.
8. Zambia’s liberalization efforts were aimed at diversifying the economy away from mining
activities. In further addressing the diversification of the economy, Zambia had provided incentives
for investment through the Export Processing Zones Act of 2001, and had made full binding
commitments in tourism and construction services.  These past liberalization efforts had not yielded
the expected benefits and the challenge of economic diversification was compounded by the lack of
adequate investment and credit, high interest rates, production and communication costs, and outdatedequipment and technologies.  In this respect the representative requested support from Zambia's
trading partners to help it improve on its productive capacities and competitiveness, and invited
suggestions on how these challenges could be addressed.  Zambia was looking forward to theWT/TPR/M/106
Page 5
modalities for special treatment of LDCs in the servi ces negotiations in order to participate effectively
in negotiations.
9. Enhancement of the agriculture sector had been  identified as a priority sector to enable
Zambia diversify its economy.  The Government was focusing on further liberalizing the agricultural
marketing, trade, and pricing policy;  streamlining the land tenure system;  ensuring food security atnational and household levels;  and maximizing the sector’s contribution to GDP.  This position was
being enforced through the Government's programmes in its poverty reduction strategy paper.  At the
multilateral level, Zambia was participating in the ne gotiations in agriculture;  it expected that it
would not be required to make any further reduction commitments.  Zambia also called upon its
trading partners to open their markets for all its products, to eliminate subsidies and domestic support,
to make rules of origin less stringent, and to stop using SPS measures as a barrier to trade.
10. Supply-side constraints remained Zambia’s majo r obstacle to integration into the multilateral
and global trading systems.  In this area, it would need external support such as increased ODA, debt
write-off, increased balance-of-payment support,  technology transfer, and increased FDI flows,
among other forms of support.  Assistance provided through multilateral programmes such as the
Integrated Framework and JITAP could comple ment the above-mentioned forms of support.
11. The representative reiterated Zambia’s special needs and difficulties, which needed to be
addressed by the international community, and its interest in participating and contributing to
developments in the WTO as an equal partner.  He noted Zambia's concerns on the progress of the
Doha implementation issues with respect to LDCs.WT/TPR/M/106
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III. STATEMENT BY THE DISCUSSANT
12. The discussant (Mr. Masato Kitera) commended Zambia’s efforts in economic reforms and
structural adjustments.
13. With regard to the economic environment, the discussant noted that Zambia had continued to
implement its economic reforms.  Since its last review, in 1996, it had been promoting economicdiversification, poverty reduction, privatization, and trade liberalization.  However, such efforts were
not reflected in its economic indicators.  According to the 2001 World Development Report, 63% of
the population were estimated to be living on US$1 a day or less and although GDP had rebounded
slightly after negative growth in 1998, it did not seem to be stable. Inflation had also remained over
20% and the lending rate to the private sector in 2001 was around 46%.  Furthermore, despite its
efforts for diversification, Zambia had continued to be dependent on copper.  Against this backdrop,
the discussant sought Zambia's assessment of why its economic reforms had not been reflected inimproved macroeconomic indicators, and the measures that needed to be taken, from the perspective
of the Government, to achieve this.  The discussant referred to comments made on the poverty
projections in Zambia’s PRSP, and asked whether there was a possibility of Zambia targeting more
ambitious goals.
14. Zambia depended highly on metal exports (65.4% of all exports), of which copper alone
accounted for 84% in value terms.  The discussant sought information on the measures being
considered by the Government of Zambia to further diversify its exports.
15. The discussant recalled Zambia's participation in various regional and bilateral agreements.
The regional agreements included: the Common Market for Eastern and Southern Africa (COMESA);
and the Southern African Development Community (SADC).  Zambia also participated in theRegional Integration Facilitation Forum (RIFF);  the African Union (AU); the African Economic
Community (AEC), and was negotiating bilateral trade agreements with Botswana, the Democratic
Republic of the Congo, Mozambique, Namibia, Tanzania, and Zimbabwe.  Given the difficulty in
managing overlapping membership in various initiatives, the discussant asked the Government's
strategy to manage these initiatives.  He mentioned Zambia’s beneficiary status of the non-reciprocalpreferential treatment under the Cotonou Agreement, the Everything But Arms Initiative of the
European Union, and the African Growth and Opportunity Act of the United States.
16. In reference to the Doha Development Agenda, the discussant emphasized the importance of
development and implementation issues, and that these remained a priority for Zambia.  Referring to
the Government of Zambia’s Report, the discussant asked why Zambia saw the IF pilot scheme as a
prerequisite for its effective trade-mainstreaming, and what actions Zambia was undertaking to ensure
effective trade-mainstreaming?
17. With respect to tariff bindings, Zambia had bound its customs duties on only 16.24% of all
tariff lines;  tariffs were bound on 3.6% of non-agricultural product lines, at the simple average rate of
42%.  However, the average applied tariff in 2001/02 was 13.4%.  In order to ensure the transparency
and predictability of the tariff regime, it would be necessary to expand the tariff bindings, and to
bridge the gap between the applied and bound rates.  He requested Zambia’s perspective on thissubject matter.
18. On the issue of the rationalization of Zambia’s import taxation system, Zambia levied excise
duties ranging from 5% to 125%, on certain products.  In 1995, Zambia replaced its sales tax of 23%
with a 20% value-added tax.  The VAT rate was reduced to 17.5% in July 1997.  Certain items were
either zero-rated or exempt from VAT.  Duty and tax concessions and exemptions remained, thoughthey had been limited;  and the burden of proof to show entitlement for a duty concession was upon
the claimant.  He asked the delegation to explain how Zambia ensured the transparency of its tax
systems and the criteria for granting duty concessions.WT/TPR/M/106
Page 7
19. The discussant noted that Zambia maintained export prohibitions on certain logs, and that
grain exports, particularly maize, were occasionally subject to bans.  Certain goods continued to
require special export permits.  Other export controls included the pre-export inspection and valuation
of gemstones prior to the issuance of a special permit, and the requirement of a verification certificate
for timber exports.  He sought the rationale for such prohibitions and controls.
20. Zambian standards were based mainly on international standards developed by international
standard-setting bodies.  There were about 350 Zambian standards, covering building and
construction, food and agriculture, textiles, and chemicals.  A number of draft standards had been
finalized but not published because of resource limitations.  The discussant thus highlighted this as a
prior area in which technical assistance was needed.
21. With regard to government procurement, the Zambia National Tender Board Act of 1982
provided the legal framework and the Zambia National Tender Board (ZNTB) was responsible for allpublic-procurement-related activities.  Price preferences were available to local suppliers:  15% for
goods manufactured in Zambia containing local materials, labour, and services representing not less
than 40% of the value of the finished products;  20% for goods produced by Zambian small business
enterprises;  7.5% for local contractors;  and 5% for goods imported and held in stock by merchants in
Zambia.  The discussant recalled that Zambia was neither a member nor an observer to the PlurilateralAgreement on Government Procurement. He asked Zambia to provide more information on:  the
ZNTB Act;  how Government of Zambia ensured the transparency of the current procurement
practices;  and whether Zambia had any intention of joining the GPA, either as a member or as an
observer.
22. As a least developed country, Zambia benefited from the special and differential treatment in
implementing the TRIPS Agreement, afforded by Article 66.1.  He noted that Zambia was amending
its legislation on intellectual property to fully align it with the TRIPS Agreement, although no
changes had been enacted since its last Review (i.e. 1996).  He asked for information on the current
situation of the legislation and the timeframes for the amendments of the respective laws and
regulations.
23. Mining and quarrying was the backbone of the Zambian economy even though mining output
had declined in recent years.  The discussant recognized that there were also external factors, such as
the sensitive demand for copper and economic recession.  However, Zambia’s mining industry was
high cost as a result of indirect costs and high debt-service payments, while production costs
worldwide were likely to be significantly lower due to technological innovations.  The State still owns
the mines, and mineral leases were granted in the form of various types of licences.  Over the last two
decades the decline in copper production was largely due to declining copper ores and poor re-investment in new and existing mines.  The decision of the Anglo-American Corporation, in 2001, not
to provide additional capital required in Konkola Copper Mines had aggravated the situation. Against
this backdrop the discussant asked whether the Government of Zambia was considering any measures
to reduce the production costs in this sector, and what measures it would take to restructure the copper
industry.
24. Zambia's agriculture sector accounted for 70% of employment and 16% of real GDP.  As part
of Zambia’s Poverty Reduction Strategy exercise, the Government intended to place agriculture as the
leading sector for food security, economic growth, and poverty alleviation, and it has subsequently
revised the objectives of the 1996 agricultural policy.  The Government's basic policy for this sector
relied on the private sector, mainly large-scale commercial farmers;  for this it offered variousincentives.  However, the vast majority of farmers were poor small-scale producers.  The discussant
asked what kind of difficulties Zambia faced in pursuing this policy and what measures Zambia was
implementing to support small-scale producers.WT/TPR/M/106
Page 8
25. Manufacturing accounted for about 18% of real GDP and employed about 11% of formal
labour.  The development of Zambia’s manufacturing sector was still being delayed by high
production costs;  energy;  transport and telecommunication services;  interest rates on loans, etc.  In
this regard, the discussant asked what measures the Government of Zambia was undertaking in order
to reduce high production costs and improve productivity.
26. Zambia’s services sector accounted for ne arly 60% of real GDP, but comprised mainly
administrative services supplied by public institutions and trading activities.  Zambia was a net
importer of services.  Among various subsectors, tourism had been successful in recent years with
increased tourist arrivals and earnings.  Promotion of the tourism subsector and improvement in
services infrastructure, such as telecommunication and transportation, would be extremely important
for the economic and social development of Zambia.  Transportation services were likely to remain
buoyant but he pointed out the low coverage of telecommunication services:  teledensity was only 1.8,and internet access was very low, with only about 5,000 users at the end of 2001.  In this respect, the
discussant asked which subsectors the Government of Zambia intended to promote to increase exports
of services, and what measures the Government believed necessary in order to provide
telecommunication services to the people of Zambia.
27. The challenge facing the Government of Zambia seemed to be to enhance its openness while
retaining the necessary policy tools for a balanced economic development.WT/TPR/M/106
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IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
28. The representative of Japan noted that Zambia was eligible to benefit from Japan’s initiatives
in the Tokyo International Conference on African Development (TICAD) process, and the GSP for
LDCs. Japan welcomed Zambia’s efforts towards economic reforms including: the privatization ofstate enterprises; trade liberalization and diversification; and the passing of the Export Processing
Zones Act. In spite of such efforts, Zambia’s macroeconomic performance had not been good;  Japan
urged Zambia to find a way to improve the link between its economic reform and macroeconomic
performance, and hoped that Zambia’s poverty reduction strategy paper for 2002-04 would be
thoroughly implemented. Given Zambia’s involvement in several regional and bilateral trade
agreements, Japan noted that Zambia would find it difficult to harmonize the different liberalization
agendas and enquired about Zambia’s strategy for managing such agreements. The CotonouAgreement would become a WTO-compatible tradin g arrangement, including the formation of free
trade-areas, within the period to 31 December 2007. However since the Enabling Clause was not
applicable to the Cotonou Agreement, duties and other restrictive regulations were required to be
eliminated on substantially all trade, as prescribed  in Article XXIV:8 of the GATT. In this respect
Japan asked about the prospects for the Government eliminating all duties and other restrictiveregulations on substantially all trade. Japan urged Zambia to expand the coverage of its tariff
bindings, and to refrain from setting bound rates higher than the applied rates.
29. The representative of Canada commended Zambia on its ongoing economic and trade policy
reforms, its support for the Doha Development Agenda, and its efforts in drafting and amending
legislation to ensure consistency with WTO obligations. Zambia was urged to: (i) bind more of itstariff lines, narrow the gap between applied and bound rates, and minimize the use of exemptions and
rebates;  (ii) take the necessary steps to fully implement its intellectual property obligations within the
time-frame prescribed by the TRIPS Agreement and (iii) to build stronger linkages among its partners
in the Common Market for Eastern and Southern Africa (COMESA) and the Southern African
Development Community (SADC).
30. The representative of the EU encouraged Zambia to continue with its structural reforms,
privatization and diversification efforts to enable it better integrate into the global economy. Despite
the reforms launched in the early 1990s the performance of Zambia’s economy was not sufficiently
promising. He drew attention to Zambia’s humanitarian crisis and to the need for Zambia to address
its electoral process, governance issues, and the respect of human rights. In addition to the financial
support from international donors, such as the Bretton Woods institutions, further efforts were needed
at both the bilateral and multilateral level to su pport Zambia’s consolidation efforts. The central
economic challenge facing Zambia was that of achieving economic diversification, solid growth with
a more positive impact on poverty.  The EU encouraged Zambia to focus on the four identified
priority sectors: agriculture, manufacturing, gemstone/non-copper mining, and tourism. To achieve
sustainable growth it would also be necessary to promote increased investment and exports, manage
the national debt, and rehabilitate infrastructure. The EU refered to the bilateral relationship betweenthe EU and Zambia under the Cotonou Agreement, Everything But Arms initiative, and the Economic
Partnership Agreements. The EU appreciated Zambia’s support for the multilateral trading system and
noted its need for further technical assistance to help it implement its WTO obligations. He
highlighted the importance to Zambia in view of its severe health problems, especially HIV/AIDS and
malaria, of a decision being reached by the end of the year, in the current multilateral negotiations, onthe question of compulsory licensing/access to medicines.
31. The representative of the EU sought clarification on (i) Zambia’s role and ambitions to
promote the progressive harmonization of COMESA  and SADC; (ii) whether Zambia would agree
that, given the importance of mainstreaming trade in to its development policy, it should not wait for
the IF membership decision before considering other mechanisms to help the authorities achieve this;
(iii) whether the Zambian Government took into account the need to address environmental impactsWT/TPR/M/106
Page 10
when facilitating and supporting the development of a sustainable and competitive agricultural sector;
and (iv) the functioning, work and composition of the Zambian National Tender Board.
32. The representative of Norway recalled his country's development assistance to Zambia in a
number of fields, mainly in infrastructure development, institution building, health care, education,
and more recently through duty-free and quota-free market access for all products from LDCs. Herenewed Norway’s commitment to support Zambia in its economic reform efforts. Although Zambia
had continued its economic reform programme towards privatization, macroeconomic stability, and
trade liberalization, substantial results had yet to be observed. The inflation rate was double-digit and
the privatization programme had not led to a viable private sector.  Manufacturing and agriculture
suffered from low productivity caused by high productions costs, limited access to financing, and low
capacity utilization.  In this regard, Norway asked Zambia to explain measures undertaken to improve
its productivity. Norway noted with concern Zambia's heavy reliance on mining, welcomed itsparticipation in regional trade agreements, and recognized its need for technical assistance. The
representative sought information from Zambia on (i) steps being taken towards a greater
diversification of the economy; (ii) measures taken in order to benefit from its regional trade
agreements;  and (iii) what types of technical assistance Zambia would need to be able to participate
effectively in the ongoing WTO negotiations. With reference to Zambia’s HIV/AIDS pandemic, therepresentative stressed the importance of  agreeing expeditiously a solution to the problem of WTO
Members with insufficient or no pharmaceutical manufacturing capacities.
33. The representative of Mauritania acknowledged the progress Zambia had made in its
economic reforms since its last Review as documented in the Secretariat's Report. He commended
Zambia for its efforts to bring its trade policies a nd measures into line with the WTO Agreements, and
called on the international community to support Zambia in its trade and economic reforms and its
fight against poverty.  Mauritania supported Zambia's request for assistance in the context of the
Integrated Framework.
34. The representative of India noted Zambia’s resolute commitment to pursuing its economic
reforms. However, notwithstanding these efforts, Zambia faced high inflation rates, high debt levels,
and extreme poverty. Continued over-dependence on the mining and quarrying sector, inadequate
infrastructure, its landlocked position, and the high HIV/AIDS epidemics were some of the
contributing factors. India appreciated Zambia's commitment to fully abide by the obligations
assumed under the WTO and supported its requests for greater technical assistance and
capacity-building efforts from the WTO and other relevant agencies. Zambia’s expectations from the
Doha work programme were genuine and merited being addressed expeditiously.
35. The representative of Botswana welcomed Zambia’s efforts to improve the living standards of
its people. He referred to relations existing between the two countries as members of SADC, and the
technical cooperation arrangements between them. He commended Zambia’s efforts in promoting
trade liberalization and fulfilling its WTO obligations in spite of its capacity constraints, and
emphasized the technical assistance needs of developing countries.
36. The representative of Kenya joined others in commending Zambia for the wide range of
economic reforms it had undertaken since its Review in 1996, but noted with concern that Zambia’s
macroeconomic performance had not been promising. This called for careful analysis of the
relationship between reforms and economic performance;  given Zambia’s experience, it would be
wrong to give a blanket statement that economic reforms led to higher economic growth and poverty
reduction. He concurred that the international community should assist Zambia to meet the adjustmentcosts, otherwise it would be extremely difficult for Zambia to meet the challenges of globalization. He
urged the WTO membership to support Zambia to enhance its diversification efforts. He encouraged
Zambia to pursue the right mix of policies that would help it to meet the objectives of increased
agricultural productivity. Kenya shared Zambia's expectation that the Doha Development Agreement
would translate into tangible and concrete equitable benefits to all members, as well as the view thatWT/TPR/M/106
Page 11
technical assistance should go beyond education seminars and contribute towards long-term projects,
including addressing supply-side constraints. With regard to comments on Zambia's electoral
processes and respect for human rights, Kenya was of the view that these were not within the
competence of the TPRB.
37. The representative of Korea acknowledged Zambia's economic reform efforts as well as its
economic difficulties. In order to attract foreign investment in areas with potential for
competitiveness, other than mining, Zambia needed to eliminate some obstacles to investment; these
included the requirement under the 1994 Companies Act that more than half of any company’s
directors must be resident in Zambia. In addition, Zambia needed to bring its IPR-related legislation
and regulations into full conformity with the TRIPS Agreement as early as possible. The
representative expressed interest in hearing more about Zambia’s safeguards legislation. Korea
expressed the view that regional agreements should play a supplementary role to WTO multilateralagreements and should not have trade-distorting effects.
38. The representative of Switzerland acknowledged Zambia’s commitment to the WTO, and its
economic reform efforts although growth remain ed comparatively weak.  Zambia faced various
difficulties, including its land-locked position, climatic conditions, and the health concerns of its
population. However, Zambia was encouraged to continue its economic reforms in order to be in aposition to exploit its potential. Diversification had been mentioned as an essential element of these
reforms and areas with particular potential included: precious stones, agriculture, tourism, and
transportation. Zambia was commended for establishing a competition commission, planning to
introduce a law on safeguards, and for seeking to align its existing regulations on anti-dumping and
intellectual property rights with the WTO Agreements. Zambia was further encouraged to strengthenits multilateral commitments for goods and for serv ices. Zambia's reforms were going in the right
direction, however guaranteed market access for its main products was essential, as well as technical
assistance to help it participate effectively in the WTO.
39. The representative of Hong Kong, China comm ended Zambia for continuing with its trade
liberalization efforts and its commitment to partic ipating actively in the ongoing negotiations under
the DDA.  Hong Kong, China was sympathetic to Zambia's problems in implementing the WTO
Agreements and fulfilling its notification requirements, as well as its needs for further technical
assistance and capacity building. The representative noted concerns about the low coverage of tariff
bindings on non-agricultural products.
40. The representative of Mauritius recalled the regional trading relations between the two
countries within SADC, COMESA, and ACP as we ll as their bilateral negotiations for the
establishment of a double taxation agreement. Mauritius had noted with interest Zambia’s bid toenhance its tourism industry, and was pleased that, while allowing privatization, Zambia took into
account environmental considerations. The Secretariat Report noted that the optimal development of
the tourism industry in Zambia was hampered by a lack of infrastructure, inadequate marketing and
promotion, the lack of skilled labour, and financial constraints, amongst others. These issues were
taken into consideration in SADC’s efforts to  support tourism in Southern Africa. Mauritius
acknowledged Zambia’s difficult economic situation, which was exacerbated by health problems. In
the area of agricultural development Mauritius hoped that Zambia's efforts would allow it to make the
most of the various initiatives in place such as the EBA and the AGOA. Zambia needed technical
assistance, and this assistance should go beyond education on agreements and obligations to take into
account long-term projects, investment, poverty reduction and enhancement mechanisms. With regardto the Doha Mandate, Mauritius concurred with Zambia that, implementation issues should be a
priority and that an expeditious solution to pharmaceutical manufacturing capacity should be found.
41. The representative of Egypt appreciated Zambia’s efforts in substantially liberalizing its trade
regime despite severe socio-economic conditions and the flexibility it has as an LDC member, in
implementing WTO commitments. With regard to the issue of why Zambia's economic performanceWT/TPR/M/106
Page 12
did not reflect its economic reforms and trade policy in particular, the delegate cited Zambia's current
arrangements with other Bretton Woods institutions, which do not impact so favourably on the trade
sector. It was important that the DDA result in seri ous export opportunities for agricultural exports to
the benefit of Zambia and other developing countries.  Egypt appreciated donor support in providing
technical assistance to Zambia, and urged further support for Zambia's current supply-side constraints.He agreed with some other delegates that discussi ons of non-trade issues should be left to their
appropriate forum, and not the WTO.
42. The representative of Zimbabwe noted Zambia's weak economic performance despite the
strides that it had made to liberalize its economy. She hoped that the DDA would provide some
solutions to help diversification in countries relian t on a single export commodity as well as to the
AIDS pandemic. Zambia also needed more tech nical assistance to enable it to implement WTO
Agreements and to address supply-side constraints. Regarding issues of governance and electoralprocesses, in her view, the WTO needed to concentrate on its major mandate, cross-border issues. In
view of the points raised regarding the non-performance of the Zambian economy, some discussion
was needed on policy coherence between the Bretton Woods institutions.
43. The representative of Malaysia noted the economic difficulties that Zambia faced despite its
economic reforms. Malaysia was encouraged by Zambia’s determination to create an environment
conducive to trade and investment, and its active participation in the WTO. The delegate appealed for
supplementary international assistance, debt relief, provision of concessionary financial flows, and
provision of technical assistance for diversification efforts. Malaysia agreed with earlier comments
that issues concerning human rights and governance were not under the purview of the WTO.
44. The representative of Nigeria noted Zambia's economic reform efforts, which had created an
environment conducive to growth, and had made  Zambia eligible under the HIPC initiative.
Nonetheless, Zambia still faced challenges. Zamb ia remained committed to the multilateral trading
system and it was to be hoped that the WTO and the donor community would support Zambia through
technical assistance, not only in terms of seminars but also in addressing its supply-side capacity
constraints. This technical assistance, along with improved market access for products of interest toZambia, initiatives such as the AGOA and EBA and the HIPC debt relief initiative, would help
Zambia benefit fully from the multilateral trading system.
45. The representative of the United States recalled his country’s support for Zambia in the areas
of:  (i) debt relief through the Heavily Indebted Poor Countries (HIPC) initiative; (ii) bilateral
assistance through the United States Agency for International Development (USAID); and in (iii)
market access through the African Growth and Opportunity Act. Zambia had worked to promote
economic growth and improve its investment climate despite the significant health-related challenges,food shortages and poverty. Efforts included structural adjustment reforms, privatization, membership
in the African Trade Insurance Agency, participation in regional integration, and efforts to comply
with WTO standards. Zambia needed to diversify its economy and create opportunities to further add
value to its commodities locally.
46. The United States sought clarification on the Government of Zambia’s statement at the
2 August 2002 meeting of the Negotiating Group on Non-Agricultural Market Access to the effect
that least developed countries with weak industrial bases should be exempted from obligations to
further liberalize industrial tariffs in the current round of negotiations. Zambia had so far bound only
3.6% of its tariff lines.  Both the Government of Zambia’s Report and the Secretariat Report
suggested that Zambian products that did not meet U.S. SPS requirements were not on the AGOA list.In fact, substantially all products from Zambia were on the AGOA list and eligible to enter the United
States duty-free. However, as was the case for all countries, agricultural products that were subject to
SPS requirements must meet those requirements before entering the United States. The United States
pledged to continue to work with the Government of  Zambia to support efforts to increase agricultural
trade and meet U.S. SPS requirements.WT/TPR/M/106
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V. REPLIES BY THE REPRESENTATIVE OF ZAMBIA AND ADDITIONAL 
COMMENTS
47. The Chairperson invited the representative of Zambia to focus his responses on three main
themes;  (i) economic environment;  (ii) trade policies and measures;  and (iii) sectoral policies and
measures.
(i) Economic environment
48. The representative of Zambia presented his delegation’s written responses under this theme to
questions raised by Members in advance and during the meeting (WT/TPR/M/106/Add.1).
49. The discussant acknowledged the informative replies provided by the representative of
Zambia. He observed that the Government of Zambia was tackling its economic reforms vigourously
with a wide range of instruments, and was on the right path.  However, he suggested the need for
Zambia to prioritize in its economic policy-making in order to make efficient use of its availableresources.
50. The representative of the International Monetary Fund addressed statements made during the
first session concerning the negative impact of stabilization and adjustment policies on the Zambian
economy and insufficient coherence in the Bretton Woods Institutions’ policy advice to Zambia.  He
cited lack of sustained commitment to prudent macroeconomic policies, particularly fiscal discpline,as the cause of Zambia’s poor economic performance in the 1990s, despite efforts to reform the
economy.  He informed Members that Zambia was implementing a Poverty Reduction and Growth
Facility (PRGF) with the support of the IMF;  trade and agricultural policies were not part of the
structural reform agenda's current programme.  He noted improvements in Zambia’s economy since
mid-2000 with lower inflation rates and an increase in GDP growth as encouraging signs but stressed
the need for Zambia to continue its commitment to sensible macroeconomic policies.
(ii) Trade policies by measures
51. The representative of Zambia presented his delegation’s written responses under this theme.
52. The discussant acknowledged the precise replies provided and commended Zambia for its
wide range of trade policy measures, including its involvement in regional and bilateral trade
agreements.  The discussant expressed the view that these arrangements should not be percieved to
threaten the WTO.
53. The representative of the United States stressed the importance of transparency and
predictability and encouraged Zambia to expand the scope of its tariff bindings.
54. The representative of the European Union sought clarification on Zambia's response regarding
the possibility of an international firm making an appeal to the Zambian National Tender Board.  He
asked whether such an appeal was possible in the event of loosing a bid, and if so what proceduresneeded to be followed.
55. The representative of Nigeria concurred with the discussant on the role of regional and
bilateral trade agreements in comple menting the multilateral trading sytem.
(iii) Sectoral policies and measures
56. The representative of Zambia presented his delegation’s written responses under this theme.WT/TPR/M/106
Page 14
57. The discussant reiterated the importance of prioritization of Zambia’s economic policies and
the need for appropriate sequencing in economic policy-making.  He emphasized the need for Zambia
to take the initiative in improving its administrati ve systems and human capacity in order for external
technical assistance to be effective.  Given Zambia’s position in Southern Africa he encouraged
Zambia to consider itself to be the crossroads of Africa.
58. The representative of Haiti shared the discussants views on the need for Zambia to consider
itself to be the crossroads of Southern Africa and to improve its human capacity.  With regard to the
latter, he called for the inclusion of Zambia in the pilot phase of the Integrated Framework, and shared
the concern earlier raised about the need to address supply-side constraints. Haiti paid tribute to
Zambia’s participation in the WTO and its contributions on the issue of the transfer of technology to
LDCs.
59. The representative of Japan reminded Members that the next TPR was for Japan and
encouraged members to submit their questions by the 1 November 2002.
60. The Director of the Trade Policies Review Division noted the point raised on coherence and
undertook to bring to this to the notice of the appropriate Division within the WTO.  He informed
Members of the existing cooperation between the WTO, the World Bank and the IMF through formal
agreements, exchange of information, and the Integrated Framework, of which Zambia was abeneficiary country.  On the concept of coherence, he recalled the universal acceptance of the gains
from trade but highlighted the need to take into  account the adjustment costs involved and the
removal of external constraints so that the beneficiary impact of trade liberalization could be fully
realized.
61. The representative of Zambia concurred with the view previously expressed that the issue of
governance did not belong to the WTO.  He undertook to respond later in writing to some questions.WT/TPR/M/106
Page 15
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
62. This meeting to review Zambia's trade-related policies has been a lively one, reflecting the
high degree of interest among the Members.  A warm welcome was given to the Zambian delegation
which contained several officials from Lusaka.  Members commended Zambia on its continuing
commitment to economic liberalization.  They observed how difficult this had been, given the healthproblems, the recurrence of drought, the declining terms of trade, and high production costs.
Members pointed out the seriousness of the difficulties in the copper industry, the backbone of the
economy of Zambia, a landlocked country.  Noting that the reforms had not yet borne much fruit,
Members saw hope in Zambia's qualification for debt relief under the Enhanced HIPC initiative and
the continued implementation of its Poverty Reduction Strategy.  Good governance, improved
competitiveness, economic diversification, and continued structural reforms might help.
63. Members stressed that Zambia, like many other developing countries, was struggling with
how best to integrate into the global economy.   They recognized the importance of the Doha
Development Agenda to Zambia, particularly in agriculture.  Attention was given to Zambia's
continuing need for trade-related technical assistance, with special mention of areas such as standards,
sanitary and phyto-sanitary measures, and supply-side constraints.  Although Members recognized the
importance of regional integration in expanding trade, they expressed concern about Zambia'smembership in several overlapping trade agreements, including the Common Market for Eastern and
Southern Africa (COMESA), and the Southern African Development Community (SADC).  They
encouraged Zambia to take greater advantage of non-reciprocal preferential access granted by some
Members.
64. Zambia was commended for having made a serious effort to remove WTO-inconsistent
measures identified during its first Trade Policy Review.  Members encouraged Zambia to improve its
binding commitments by increasing their coverage on non-agricultural products, and reducing the gap
between bound and applied rates.  Further rationalization of import taxation would reduce the
widespread use of duty and tax concessions.  Members sought further information about Zambia's
public procurement regime, including its National Tender Board, and encouraged it to speed up itsdecision for membership in the Plurilateral Agreement on Government Procurement.
65. Noting that protection of intellectual property rights could help to attract foreign direct
investment, Members encouraged Zambia to fully implement its intellectual property obligations
within the timeframe prescribed by the TRIPS Agr eement.  Zambia's struggle with health problems
was pointed out as an example of the problems faced by WTO Members with insufficient or no
manufacturing capacities in the pharmaceutical industry.  Therefore, some Members urged a quick
decision on the compulsory licensing access to medicines.
66. Members noted that Zambia's renewed emphasis on developing its agriculture would
contribute to poverty reduction and economic di versification. They sought clarification about
Zambia's intentions to create a Crop Marketing Authority.  Connected to agriculture were efforts to
create manufacturing opportunities to add value to commodities locally. Members noted that
residency restrictions were constraining investment, especially in the services sector and raisedquestions about Zambia's plans for telecommunications, broadcasting, financial services, and
information technology, in particular.
67. Members also sought clarification on several specific matters, including
− mainstreaming trade into development policy , even without "pilot scheme" status in
the Integrated Framework;
− further liberalization of industrial tariffs;
− export bans and controls;
− contingency trade remedies;WT/TPR/M/106
Page 16
− investment regime in the mining and quarrying sector;  and
− agricultural policy and environmental concerns.
68. Members appreciated the responses provided by the delegation of Zambia during the meeting,
and looked forward to later replies to some questions.
69. In conclusion, it is my feeling that this Trade Policy Review has highlighted the commitment
of the Zambian authorities to liberalize their economy despite various difficulties.  I am pleased that
so many Members identified ways in which they were providing trade-related technical assistance toZambia and their commitment to continue assistin g it.  Nevertheless, I feel it important to call
attention to the supply-side constraints that still need to be addressed. I hope that the Doha
Development Agenda will evolve in such a way as to make possible greater access for Zambia's
products, and contribute to the diversification of its economy.  In sum, further assistance by the
international community will help Zambia to full y integrate into the multilateral trading system.
70. The Chairperson expressed his personal reflection for the WTO to work closely with other
multilateral agencies to ensure greater coherence in policy advice and programme implementation.He said it would be useful to WTO Members in their interaction with Zambia and other developing
countries, if there was a better appreciation of the development challenges faced by these countries.
Much of this information was available from UN institutions such as ITC, UNDP and UNCTAD and
working more closely with them would add greater value to WTO, especially in fulfilling its
development objective.
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