WORLD TRADE WT/TPR/M/17/Add.1
30October 1996
ORGANIZATION(96-4568)
Trade Policy Review Body
9-10September 1996
TRADE POLICY REVIEW
ZAMBIA
MINUTES OFMEETING
Addendum
Answers toWritten Questions
Thefollowing communication wasreceived on15October 1996fromtheDelegation ofZambia
responding toquestions raised bydelegations andthediscussants during thereview.
1. Impact oftheSADC Trade Protocol onZambia
Iftariff reductions proceed onanasymmetrical basis asrequired under theSADC Trade
Protocol, thatis,those member States withhigher dutyratesstartfirsttoreduce them, thenZambia
isnotlikely tosuffer anyrevenue lossduring thatperiod asshewillnotbeexpected toreduce her
tariffs since shehasthelowest average tariff among themember states. Instead, sheislikely togain
more access intoother SADC member states markets.
However, inthelongterm, Zambia islikely tosuffer some revenue losses resulting fromtariff
elimination within SADC which would account foralmost 50percentofZambia 'stariff revenue
considering that40percentofZambia 'simports originate from theRepublic ofSouth Africa.
2. Macroeconomic Environment
Themacroeconomic environment asofAugust 1996 isasfollows:
(a) Level ofInterest Rates byAugust 1996:
- OnTreasury bills
- 28days 71.6percent
- 91days 64.8percent
- 182days 60.5percent
- OnCommercial Banks
Baserate 55.5percent
Savings 31.4percent
Interbank 43.5percentWT/TPR/M/17/Add.1
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(b) Balance ofpayments asofAugust 1996 (inmillions ofUS$)
(i)Total Donor inflows 95.8
(ii)Total Debt Service 110.1
(iii)Balance ((i)-(ii)) (14.3)
Thisclearly indicates anoutflow.
(c) Volatility ofReserves
1996
Gross Official Reserves
(million)NetInternational Reserves
(million)
January 143.8 (1,141)
February 167.7 (1,116)
March 156.5 (1,122)
April 135.0 (1,143)
May 152.1 (1,113)
June 185.7 (1,079)
July 144.2 (1,120)
3. Anti-dumping dutyof15percent
Ananti-dumping dutyof15percenthasbeenineffect since theearly 1970s oniron/steel
windows anddoorframes (HSheading 73.08.30.00) irrespective ofthecountry oforigin. Thisanti-
dumping dutyisinconflict withWTO requirements because itisapplied regardless ofthecountry
oforigin. Inview oftheabove, arecommendation hasbeenmade thatthisanti-dumping dutybe
removed inthe1997 budget.
There willbenorevenue implications asonlyK16,982 ofcustoms dutyandK14,717 ofVAT
wascollected oniron/steel windows anddoorframes, from January toAugust 1996.
4. Customs valuation
Customs valuation inZambia isbased onBrussels Definition ofvalue (BDV). Inaccordance
withtherequirements oftheWTO Agreement, Zambia isexpected toadapt itslegislation anditscustoms
valuation procedures toa"transaction value" by1January 2000. TheMinistry ofFinance andZambia
Revenue Authority willwork handinhandtoensure thatZambia meets thedeadline.
5. General Agreement onTrade inServices (GATS)
IntheGeneral Agreement onTrade inServices, (GATS), Zambia made specific commitments
inthefollowing:
Business Services
(a) Professional Services
- Accountancy
- Medical anddental services
- Services provided bymidwives, nurses, physiotherapists andparamedical
personnelWT/TPR/M/17/Add.1
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(b) Other Business Services
- Technical testing andanalysis services
- Services incidental tomining, exploration
Construction andRelated Engineering Services
Health related andsocial services
- Hospital services
- Other human health services
Tourism andTravel Related Services
Inalltheabove sector specific commitments there arenolimitations onmarket access and
national treatment. Thisentails thatZambia applies theMost Favoured Nation (m.f.n.) treatment to
Services andservice suppliers ofallother member states.
However, movement ofnatural persons inalltheabove sectors isunbound forentry and
temporary stayofnatural persons employed inmanagement andexpert jobsfortheforeign investment.
Employment ofsuchpersons isagreed upon byparties involved andisapproved bytheMinistry of
Home Affairs.