WT/TPR/S/219/Rev.1 Trade Policy Review 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) INTRODUCTION  
1. Under the 5th National Development Plan (2006-10), trad e and investment play a key role in 
the broad aim of  transforming Zambia into a diversified and competitive economy that is better 
integrated in the international trading system.  In  order to raise the profile of export promotion and 
promote diversification of the economy away from  reliance on copper, the Government created the 
Zambia Development Agency (ZDA) in 2007, which h as replaced the several agencies responsible for 
private-sector support and has rewritten the rules on dom estic and foreign investment, particularly in 
respect of priority sectors.    
2. Among the noteworthy developments in Zambia 's institutional and policy framework during 
the period under review are the establishment of a constitutional review commission to examine, 
debate, and adopt proposals for a new constitution,  as well as on-going efforts to combat corruption, 
an important cost of doing business involving, inter alia,  trade, and FDI. There have also been 
improvements in administrative transparency, thus reducing the scope for administrative discretion, 
and therefore corruption.  
3. Mindful of Zambia's small domestic market, the Government seeks to take advantage of 
external market opportunities and promote economic diversification through active participation in 
multilateral and regional trade. Zambia is thus an active member of the WTO, and, as a least 
developed country signatory to the Cotonou Agreement, has enjoyed non-reciprocal duty-free access to EC markets and is eligible to access the U.S.  market under the Africa Growth Opportunity Act 
(AGOA).  Regionally, Zambia is a member of the Southern Africa Development Community (SADC) 
and the Common Market for Eastern and Southern Africa (COMESA) and, as both are moving towards a customs union, Zambia's double membership  may become difficult to maintain.  However, 
in a recent development, SADC and COMESA, toge ther with the East African Community, have 
agreed to the expeditious establishment of a comm on free-trade area with the goal of establishing a 
single customs union and harmonizing member states' trade arrangements.   
(2) I
NSTITUTIONAL AND LEGAL SETTING  
(i) Constitutional developments 
4. Under the provisions of the 1996 Constitution, Zambia is a multi-party state with executive 
power vested in the President as the constitutional Head of State. The President and the National Assembly are elected simultaneously by universal a dult suffrage for a five-year term.  The duration of 
the President’s tenure in office is limited to tw o five-year terms. The President governs with the 
assistance of a Vice-President and a Cabinet, w hom he appoints from members of the National 
Assembly. The Constitution also provides for a 27-member House of Chiefs, which represents 
traditional tribal authorities. Each of Zambia’s nine  provinces has a minister, who is appointed by the 
President.  Legislative power is vested in the National Assembly, which comprises 158 members:  
150 are elected by universal adult suffrage, and 8 are nominated by the President.  The presidency 
enjoys wide executive powers.  After the president 's office, the Ministry of Finance and National 
Planning is the most powerful in the Government, driving economic policy and relations with donors, 
although the President's office has asserted greater control over this.     
5. A constitutional review commission (CRC) appoint ed by the president began work in 2003, 
and published an interim report and draft constituti on in July 2005.  It recommended adopting the 
Constitution through a constituent asse mbly representing a cross-section of Zambians.  In June 2006, 
the CRC published its report and dr aft constitution, which included, inter alia, an updated bill of Zambia WT/TPR/S/219/Rev.1 
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rights, the requirement for a presidential candidate to  win more than 50% of the vote (instead of the 
current first-past-the-post or simple-majority system) and certain limitations on the President’s 
statutory powers.  However, the 2006 presidential el ections were held under the terms of the existing 
Constitution as were the  presidential elections in Oc tober 2008 following the death of the incumbent.  
A  National Constitution Conference1 (NCC), held in December 2007, examined, debated and adopted 
proposals for a draft constitution prepared by the CRC:  it reviewed, inter alia , presidential power, the 
voting system, the budget cycle, and the death penalty.  The NCC's numerous committees have deliberated on specific parts of the constitution and most have adopted reports containing 
recommendations.  These will be submitted to plenary for deliberation and conclusion; decisions of 
plenary are by consensus. The Government is comm itted to ensure that a revised or new constitution 
is enacted before the 2011 presi dential and general elections. 
(ii) Court system 
6. The court system consists of the Supreme Cour t, the High Court, subordinate magistrates' 
courts, and local courts.  Although the underpinnings for an efficient system to handle court disputes 
exist, in the view of some observers
2 Zambian courts are relatively inexperienced in the area of 
commercial litigation. This is disputed by the author ities who have stated that matters instituted in the 
commercial court are disposed of faster than tho se on the general civil court list.  There are other 
bodies mandated to deal with trade-related dis putes, such as the Revenues Appeals Tribunal and 
arbitration under the guidance of the Centre for Arbitration.  
(iii) Institutional transparency 
7. According to the World Bank and some  of Zambia's cooperating partners3, there has been 
over the years a gradual strengthening of Parliament and other oversight institutions such as the Office 
of the Auditor General and the Anti-Corruption Commission.  There has also been increased 
transparency in public financial management and procurement management although there appears to 
have been slow progress on the approval of pendin g anti-corruption legislation including anti-money 
laundering.  On other governance issues some importa nt results have been achieved, notably in the 
areas of protecting human rights, promotion of gender equity, constitutionalism, and improving 
freedom of the press. 
8. As noted in Chapter I (paragraph 23), Tran sparency International has not registered 
significant improvements in the public perception of corruption in Zambia in recent years, and the 
WEF cites corruption as the most problematic constraint on doing business.4  Corruption is still a 
significant problem at the political and administra tive levels, as well as colouring relations between 
companies and public officials; anti-corruption instit utions lack adequate funds, sufficient staff, and 
genuine independence from political influence,  and there has been evidence of serious 
maladministration within government.5 
                                                      
1 In August 2007, Parliament passed a government-sponsored law creating the NCC, which is charged 
with drafting a new constitution.  The NCC comprises over 500 members drawn from parliament, political 
parties, civil society, and government.   
2 See for example U.S. Department of State (2009). 
3 Remarks made at the High Level Policy Dialogue on Lusaka on 30 March 2009. 
4 World Economic Forum (2007). 
5 For example, the report of the Auditor General re vealed that more than 1.5% of total government 
expenditure in 2006 showed irregularities in manage ment, from misapplication of funds and unaccounted 
expenditure and stores, to over-payments, misappropri ation, and unconstitutional expenditure.  See also 
Transparency International Zambia (2007). WT/TPR/S/219/Rev.1 Trade Policy Review 
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9. Zambia ratified the Southern African Developm ent Community protocol against corruption in 
2003.  In January 2007, the Government announced that Zambia had acceded to the United Nations 
Convention Against Corruption (which entered into  force in 2005), and ratified the African Union 
Convention on the Prevention and Combating of Corruption. 
(3) TRADE POLICY FORMULATION AND IMPLEMENTATION  
(i) Policy objectives  
10. In its Fifth National Development Plan (FNDP)6, the Government states that, in view of its 
small domestic market, it seeks to take advant age of external market opportunities and promote 
economic diversification through ac tive participation in multilateral and regional trade.  The broad 
policy objectives during the FNDP period are to transform Zambia into a diversified and competitive economy that is well integrated in the international trading system.  
11. The Government aims to strengthen the link be tween primary extraction and industrialization 
by adding value to primary goods, especially thos e for export. This is expected to induce capital 
market development, skills development, technology , R&D, micro-, small, and medium enterprise 
development, and rural industrialization.  The Gove rnment also states that it will establish a Tariff 
Commission (not yet set up) to facilitate the eff ective implementation of trade remedies and oversee 
tariff classification, rationalization, and implem entation.  Detailed trade policy objectives, and 
strategies formulated to achieve them were set out for the period 2006-10 (Table II.1).  This level of 
detail puts considerable onus on performance monitoring and on-going evaluation.    
Table II.1 
Zambia's main trade policy programme s, objectives, and strategies, 2006-10 
Programmes Objectives Strategies 
Promotion of 
Standards, Quality 
Assurance, 
Metrology and Accreditation To strengthen and 
decentralize the 
administration of 
testing and certification  (a) strengthen infrastructure capacity at the Zambia Bureau of Standards ZABS and 
Zambia Weights and Measures Agency (ZWMA) 
(b) decentralize standards, testing and certification infrastructure (c) affiliate to international certification and accreditation bodies 
(d) capacity-building and training programme s for officials of MCTI/ZABS/ZWMA and 
other regional certification bodies 
(e) facilitate certification and accr editation other laboratory centres  
Export Promotion Increase volume of 
Zambian exports, 
particularly in non-
traditional sectors  (a) finalize and implement national export strategy 
(b) improve and promote market access (c) promote domestic value addition and export of high value products 
(d) facilitate effective participation in  trade fairs, forums and expositions 
(e) capacity building of trade promotion ag encies and private sector associations 
(f) establish export financing facility (g) disseminate export informa tion to potential exporters  
(h) conduct market research studies  
Table II.1 (cont'd) 
                                                      
6 Fifth National Development Plan 2006-2010, Chapter 13:  Commerce and Trade. Zambia WT/TPR/S/219/Rev.1 
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Programmes Objectives Strategies 
Enhancement of 
Domestic Trade 
and Competition Formalize and 
monitor domestic 
trade activities and stimulate a vibrant 
domestic trading 
sector  (a) promote the consumption of locally produced goods and services 
(b) promote and facilitate the development of micro and small business enterprises 
(c) supervise and monitor trade licensing programmes (d) compile and disseminate dome stic commerce and trade data 
(e) organize and participate in domestic trade fairs (f) ensure fair and competitive market practices in Zambia 
(g) ensure compliance with Corporat e Social Responsibility Tenets (CSR) 
(h) promote local economic development (i) ensure compliance with fair procurement procedures in the economy (j) implement Local Business Development Programme (k) implement the Citizens Empowerment Act  
Trade Promotion 
(Multilateral, 
Bilateral and 
Regional) Secure improved 
market access for 
Zambian goods and 
services  (a) capacity building in trade-relate d issues for the private sector 
(b) strengthen trade reference centres in gove rnment, private sector, and other relevant 
institutions 
(c) hold regular meetings with domestic st akeholders to facilitate effective dialogue 
(d) build effective negotiati on capacity for multilateral, regional and bilateral trade 
Agreements 
(e) utilize the services of Zambian missions ab road by establishing regular consultations 
on trade and investment  
Establishment of 
Tariff Commission To facilitate the 
effective 
implementations of 
trade remedies and 
oversee tariff classification, rationalization and 
implementation  (a) establish Tariff Commission 
(b) review and formulate tariff policy (c) review tariff structure and levels (d) review other measures affecting trade (e.g. subsidies, tax structures; incentives) 
(e) build capacity to conduct investigations in to unfair trade practices and ensure the 
proper application of rules of origin  
(f) improve capacity to implement trade remedies  
Promotion of 
Commercial 
Services Increase trade in 
services  (a) conduct comprehensive domestic trade assessments 
(b) formulate national strategy on trade in services (c) conduct training seminars for domestic priv ate sector on the development and trade of 
services products 
(d) implement annual services audit survey (e) promote investment opportunities in trade in services  
Elimination of 
Trade-related 
Supply Constraints Reduce trade-related 
supply constraints  (a) improve transporta tion infrastructure 
(b) facilitate public private pa rtnerships (PPP) development 
(c) improve access to financial services (d) facilitate technology transfer (e) undertake value chain analysis  
Source: Fifth National Deve lopment Plan 2006 – 2010, pp. 126-127. 
(ii) Implementation and monitoring 
(a) Government agencies 
12. According to the FNDP, the Ministry of Comme rce, Trade and Industry (MCTI) is the lead  
agency for the implementation and monitoring of the trade policies  Depending on the issues to be 
dealt with, MCTI is assisted by other ministries a nd government institutions.  It has responsibility for 
both internal and foreign trade and thus the prim ary mandate to formulate relevant policies and 
implement programmes for the development of trade and industry in Zambia. The Sector Advisory 
Group (SAG) is the forum through which monitoring and reporting is to be achieved on a quarterly WT/TPR/S/219/Rev.1 Trade Policy Review 
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basis.  The MCTI is charged with setting up annu al stakeholders' review meetings to evaluate 
programme effectiveness. Progr amme performance is monitored through the tracking of key 
indicators, including:  certified products entering the market; volume of trade; and the value of export 
earnings from non-traditional exports in regional, Eu ropean, North American, and other markets.  
Programme effectiveness and interchange with stake holders is also done under the framework of the 
Trade Expansion Working Group, composed of public- and private-sector actors.  
13. The Ministry of Finance and National Planning (MOFNP) is tasked with the formulation of 
broad macroeconomic policies and overseeing their implementation. Article 114 of the Constitution 
stipulates MOFNP as the only institution authori zed constitutionally to grant tariff suspensions, 
exemptions or amendments under Parliamentary authority.7 While the tariff is one of the most 
important instruments of trade policy, the Ministry  responsible for trade policy has no authority to 
make any decision on it;  MCTI makes recommendations while MOFNP takes the final decision. 
14. The Zambia Revenue Authority (ZRA) was esta blished in 1994 as an autonomous institution 
whose main responsibility is to assess and collect tax es and duties on behalf of the Government.  The 
Authority also provides advice to the Government  on aspects of tax policy and international trade.8  
The ZRA is streamlining customs clearance systems to  ensure efficiency gain s that reduce costs and 
facilitate trade. It has also launched, on a pilo t basis, a Customs Accredited Clients Programme to 
recognize and reward compliance efforts by im porters through the speedy clearance of their 
consignments at borders.9 
15. A number of key ministries assist MCTI in formulating trade policy:  the Ministry of Justice 
(formerly Legal Affairs), which drafts all laws in  Zambia;  the Bank of Zambia, which formulates 
monetary policy and monitors the external tr ade sector; the Zambia Development Agency; the 
Ministry of Mines; the Ministry of Agriculture , mandated to formulate and implement agricultural 
policy,  plays a key role in SPS issues; and the Ministry of Tourism, Environment and Natural Resources formulates tourism policy and supervises all tourism-related statutory bodies, e.g. Zambia 
Wildlife Authority and Zambia National Tourist Board.  
16. In order to raise the profile of export pr omotion and diversify the economy away from 
reliance on copper, the Government created the Za mbia Development Agency (ZDA) under Zambia 
Development Agency Act No. 11 of 2006.  The ZDA is an amalgamation of the Zambia Investment 
Centre, the Export Board of Zambia, the Zambia  Privatisation Agency, the Zambia Export and 
Processing Zones and the Small Enterprise Devel opment Board, all the agencies previously 
responsible for private-sector support.
10 
17. Other agencies with trade-related respons ibilities include:  the Zambia Competition 
Commission, which enforces the Competition and Fa ir Trade Act by monitoring, controlling and 
                                                      
7 Article 114 stipulates that imposition of taxation or the alteration of it shall only be by an Act of 
Parliament. The Ministry of Finance, as authorized unde r various Acts of Parliament, is the sole institution to 
grant tariff suspensions, exemptions or amendments. Notable among these the Zambia Revenue Authority Act, 
chapter 321 of the laws of Zambia;  the Value Added Tax Act, chapter 331 of the laws of Zambia, and the 
Income Tax Act, chapter 323 of the laws of Zambia.  
8 Prior to 1994, the Customs Department of the then Ministry of Finance and Economic Development 
was responsible for all tax policy formulation and tax collection. 
9 Zambia Revenue Authority (2008),  p. 7. 
10 The Government issued a notice for cessation of operations of the five statutory bodies and for the 
establishment of the Zambia Development Agency (ZDA ) on 31 December 2006.  The ZDA Act also repealed 
the Investment Act, the Privatization Act, the Small En terprises Development Act, the Export Processing Zones 
Act, and the Export Development Act. Zambia WT/TPR/S/219/Rev.1 
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prohibiting activities likely to impede competition and fair-trading;  the Zambia Bureau of Standards 
(ZABS) and the Zambia Weights and Measures ag ency (ZWMA), which are responsible for the 
implementation of the standards, quality assurance,  accreditation, and metrology programmes;  and 
the Patents and  Companies Registration Office (PACRO), which  serves as the agency overseeing 
industrial property issues and the legal system fo r the registration and prot ection of commercial and 
industrial property.   Intellectual property issues ar e dealt with by the Registrar of Copyrights under 
the Ministry of Information and Broadcasting.  
(b) Private sector 
18. The private sector's contribution to policy formul ation is through a variety of trade and sector 
associations and interest groups. Traditionally the apex organization for business in Zambia is the 
Zambia Association of Chambers of Commerce and Industry (ZACCI), whose membership is derived 
from the major trade associations.  A number of ma jor associations have come together under the 
umbrella of the Business Forum, including: the Zambia Association of Manufacturers (ZAM), the  
ZACCI, which represents the private sector on a number of statutory boards; the Tourism Council of Zambia (TCZ), bringing together a ll the major tourist enterprises;  the Zambia National Farmers 
Union (ZNFU), the apex body for farmer groups and other agri-related business enterprises;  the 
Zambia Chamber of Small and Medium Business Associations (ZCSMBA), which represents over 
60 district-based SME business associations; and the Chamber of Mines, which represents all the 
major copper and cobalt mining hou ses in Zambia.  The private sector participates in the PSD Reform 
Programme through the Zambian Business Forum. 
(iii) Main trade laws 
19. The Customs and Excise Act, as amended in 2006,  is the main legislation governing Zambia’s 
foreign trade.  It provides for the imposition, collection, and management of customs, excise, and other duties;  the licensing and control of warehouses and premises for the manufacture of certain goods;  the regulation, control and prohibition of impor ts and exports;  the conclusion of customs and 
trade agreements with other countries;  and fo rfeitures and for other c onnected matters.  Other 
legislation has also had an impact on the flow of goods into or out of Zambia, including the Zambia 
Bureau of Standards Act, the Control of Goods Act, and the Food and Drugs Act (Table II.2).   
Table II.2 
Trade-related legislation in Zambia, 2009 
Area Legislation Most 
recent 
version 
Foreign trade;  customs procedures, valuation and 
duties;  rules of origin;  emergency measures;  
excise tax;  tariff c oncessions;  and Revenue 
Appeals Tribunal Customs and Excise Act, as amended 2006 
Trade Control of Goods Act (1985) and amendment 2004 
 Trade licensing Act 1968 
Trade in scrap metals Scrap Metal Dealers Act 1961 
Countervailing duty (investigati ons) Statutory Instrument 54 2000 
Tariff suspension on manufacturing inputs Statutory Instrument 23 1994 
Rebates, refunds, and remissions of bord er charges Statutory Instrument 16 1996 
Government procurement The Zambia National Tender Board Act 
The Tender Regulations 1982 
1995 
Table II.2 (cont'd) WT/TPR/S/219/Rev.1 Trade Policy Review 
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Area Legislation Most 
recent 
version 
Technical standards and re gulations Standards Act 
Food and Drugs Act 
Plants, Pests and Diseases Act 1994 
1978 
1959 
 An Act to Amend the Weights and Measures Act 1994 2003 
Enterprises Registration of Business Names Act 1995 
 Companies (Amendment) Act, 2000 (Act 1 of 2000) 2000 
 Companies Act 1994 
Public enterprises Privatization Act 1992 
Intellectual property rights Patents Act 
Statutory Instrument 54 
Trade Marks Act 
Statutory Instrument 56 Registered Designs Act 
Statutory Instrument 55 
Merchandise Marks Act Copyright and Performance Rights Act 
Plant Breeders’ Rights Act, No. 18 
Seed Act 1995 
1995 
1995 
1995 1995 
1995 
1995 1995 
2007 
2007 
Investment The Zambia Development Agency Act, No. 11 
(replaces Investment Act) 2006 
Competition The Competition and Fair Trading Act 1994 
Financial services The Banking and Financial Services Act 1994 
Insurance Insurance Act 1968 
Telecommunication The Telecommunication Act 1994 
Bio safety Bio safety Act 2007 
Fisheries An Act to Amend Fisheries Act, No. 22 2007 
Income tax An Act to Amend the Income Tax, No. 4 2007 
VAT An Act to Amend the Value Added Tax Act, No. 3 2008 
Legal practitioners An Act to Amend Legal Practitioners Act 2006 
Mining The Mines and Minerals Development Act 2008 
National construction National Counc il for Construction Act, No. 13 2003 
Tourism Tourism and Hospitality Act, No. 23 2007 
Trades & licensing An Act to Amend the Trades and Licensing Act, 
No. 15 2007 
Source:  Information provided by the Zambian authorities. 
20. The Zambia Development Agency (ZDA) Act11 is an important legislative development in the 
investment field.  The Act makes a number of chang es to investment procedures, in the interest of 
promoting economic growth and establishing a one-st op facility to ensure a client focus, better 
private-sector dialogue, and more confidence in public sector support for business.  
21. During the review period, Zambia has made pr ogress towards streamlining domestic laws and 
practices in order to create an enabling business envi ronment. The laws enacted, amended or in the 
process of being reviewed, include:  the ZDA Act, Competition and Fair Trading Act, Companies Act, Tourism and Hospitality Act, Zambia Touris t Board Act, Information and Communication 
Technology Bill, Citizens Economic Empowerme nt Act, and the Electronic Communication 
                                                     
 
11 ZDA Act.  Viewed at:  http://zambia.usembassy .gov/zambia/img/assets/5816/ZDA%20Act.pdf.  The 
Act repeals the Investment Act, the Privatization Ac t, the Small Enterprises Development Act, the Export 
Processing Zones Act, and the Export Development Act.  The Act is still to be fully reconciled with the 
Immigration and Deportation Act and other Zambian legislation. Zambia WT/TPR/S/219/Rev.1 
 Page 23 
 
 
Transaction Bill.  There are also plans to revise th e Standards Act to separate standards testing from 
the regulatory functions and strengthening of the sta ndardization, certification, and inspection units of 
the Zambia Bureau of Standards (ZABS), ensuri ng conformity with international and regional 
standards and technical requirements.  
(4) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) World Trade Organization 
22. An original Member of the WTO, Zambia accord s at least MFN treatment to all its trading 
partners. Zambia is not a signatory to the plurila teral agreements resulting from the Uruguay Round. 
Its main WTO notifications during the period un der review are summarized in Table AII.1. 
23. Zambia has not been directly involved, either as a defendant or as a complainant, in any trade 
dispute settlement proceedings.  
24. During the Doha negotiations, Zambia has coordi nated the work of the group of 50 LDCs,  
chairing meetings in order to come up with comm on negotiating positions on issues of concern, and 
making submissions on behalf  of the group, covering, inter alia,  agricultural and non-agricultural 
market access12, rules of origin13, services14, dispute settlement15, TRIPs16,  and aid for trade.17  At the 
forefront of Zambian and other African LDCs' c oncerns is access for their exports in overseas 
markets, both in terms of expanded access to de veloped and developing country markets, and 
minimizing the effects of the erosion of the trade preferences currently enjoyed by their limited number of exports. 
25. For Zambia a successful outcome of the Doha Round should fully take into account 
development-related issues as reflected in  the 27 February 2008 Maseru Declaration.
18  Although 
LDCs will not be required to cut tariffs or subsidi es as part of the Doha Round – leaving them outside 
the principal trade-offs being negotiated – the gro up has pinpointed a series of objectives.  LDCs have 
called on rich countries to ensure commercially m eaningful unrestricted market access for at least 
97% of products from all LDCs by the end of 2008 and have asked developed countries to identify the 
remaining 3% in their draft commitment schedules, and to remove duties and quotas on them by the 
end of the Doha Round implementation period.  The LDCs stressed that nominally unrestricted access 
would mean little unless accompanied by simplified rul es of origin, which determine how much of a 
                                                      
12 WTO document TN/CTD/W/31 of 30 June 2006, Duty-Free and Quota-Free Market Access:  
Implementation of the Decision on Measures in favour of LDcs of Annex F of the Hong Kong Ministerial 
Declaration of December 2005. 
13 WTO document TN/CTD/W/30 of 12 June 2006, LDCs' Proposal on Rules of Origin. 
14 WTO document JOB(06)/155 of 24 May 2006, LDC Group Request on Mode 4;  JOB(05)/114 of 
17 June 2005, Implementation of the Modalities for the Special treatment for LDC Members in Trade in Services Negotiations;  TN/S/W/59 of 28 March 2006, A Mechanism to Operationalize Article IV:3 of the 
GATS;  TN/S/W/13 of 7 May 2003, Draft Modalities for the Special treatment for LDC members in the 
Negotiations on Trade in Services;  JOB(02)/205 of 6 Decembe r 2002, Draft Modalities for the Special 
Treatment for LDC Members in the Negotiations on Trade in Services. 
15 TN/DS/W/17 of 9 October 2002, Negotiations on the Dispute Settlement Understanding. 
16 IP/C/W457 of 21 October 2005, Request for an Ex tension of Transitional Period under Article 66.1 
of the TRIPs Agreement;  IP/C/W/390 of 29 November  2002, Implementation of Article 66.2 of the TRIPs 
Agreement. 
17 WT/AFT/W/22 of 29 June 2006, Aid for Trade – an LDC Perspective;  WT/AFT/W/1 of 
3 April 2006, Value Chain Analysis as a Basis for Identifying Needs and Gaps.   
18 LDC Trade Ministers' Meeting held in Maseru , Lesotho.  Viewed at: http://www.acici.org/ 
downloads/Maseru%20Declaration%20-%20%20Final%20Version.pdf. WT/TPR/S/219/Rev.1 Trade Policy Review 
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product's value added would have to occur in an LD C for it to qualify. They asked for WTO Members 
to base the new rules of origin on the group's own proposal, which would make it easier for goods to 
qualify as being from an LDC. 
26. Other issues include the Maseru Declaration's demand for all LDCs to have full access to the 
agricultural special safeguard mechanism (SSM) to address import surges and price declines.  Also, 
trade solutions to address preference erosion in  the modalities on agriculture and non-agricultural 
market access (NAMA) should entail either lower ta riff cuts on certain products, or longer periods for 
implementing tariff reduction.  The LDCs asked for the United States and the EC to be allowed to 
phase in tariff cuts on certain products, mostly te xtiles and clothing, over 15 years (around three times 
longer than the standard period). This would exte nd the period during which LDC exports in these 
markets, presumably entering duty-free, would enjoy a meaningful margin of preference over products from elsewhere in the world.   
(ii) Regional agreements 
27. Zambia is a member of both the Southern Africa Development Community (SADC) and the 
Common Market for Eastern and Southern Africa (COMESA).  For both exports and imports SADC 
is Zambia's main trading partner, accounting for approximately 36% of trade while COMESA 
accounts for about 10%.  To deepen integration and ma ximize benefits further,  Zambia will need to 
pursue harmonization of policies under its regional commitments.
19  Specifically, it will need to press 
for improving trade facilitation, simplifying rules of origin, undertaking multi-country projects in the areas of transportation and energy, and ensuring pa rallel MFN tariff liberalization.  Despite these 
RTAs, however, Africa's share of Zambia's trade is declining.  
28. As SADC and COMESA both moved toward s customs unions during the period under 
review, Zambia's double membership may have become difficult to maintain.  In this regard, in a key 
recent development, three African re gional economic communities – the EAC
20, SADC, and 
COMESA – agreed to set up a tripartite taskfo rce with a view to harmonizing their trading 
arrangements with the goal of establishing a single customs union.21  
(a) Common Market for Eastern and Southern Africa (COMESA)22 
29. The Common Market for Eastern and Southern  Africa (COMESA) is a regional integration 
grouping of 19 African States23, which was established in 1994 as a successor to the Preferential 
Trade Area (PTA).  It became a free trade area in 2000;  Zambia has ratifie d the FTA although not all 
member states have done so. COMESA's main aim is the formation of a large economic and trading 
unit to be achieved through monetary union with a single currency and a common central bank;  the 
target is for full monetary union by 2025. 
                                                      
19 See MWASE (2008). 
20 The East African Community's members are Ta nzania , Uganda, Kenya, Rwanda, and Burundi. 
21 The first COMESA – EAC – SADC tripartite summit was held on 22 October 2008 in Kampala.  The 
summit directed the three regional organizations to undertake a study for the establishment of an FTA, which 
will be presented at a tripartite council of minist ers within 12 months.  See EAC Press Release, 
22 October 2008, Historic First EAC-SADC-COMESA Tripartite Summ it held in Kampala;  starts on the road 
to Single Free Trade area and merger of regional economic blocs.  Viewed at: http://www.eac.int/index.php/ 
the-news/1-latest-news/192-eac-sa dc-comesa-tripartite-sumit.html. 
22 COMESA was notified to WTO under the Enabling Clause on 29th June 1995, the first regional 
trade agreement of African countries to be notified to the WTO. 
23 Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, 
Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe.  Angola has notified COMESA that it no  longer wishes to be a member. Zambia WT/TPR/S/219/Rev.1 
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30. The creation of a free trade area in 2000 was an important step and by the end of 2006, 13 of 
the 20 members had removed all barriers to trade between themselves, granted trade preferences to the COMESA members that are not part of the FTA, and retained tariffs on imports from outside 
COMESA.
24  COMESA member states have committed themselves to the implementation of a 
CET-based, 3-band tariff structure:  0% for capital goods and raw materials, 10% for intermediate 
goods and 25% for finished products.  In terms of re venue collection, in the initial stages it has been 
agreed that each member will continue to collect its own revenue even in the customs union, which is 
to be reviewed at a later stage.  The remaini ng work relates to agreeing on the list of sensitive 
products and their CET rates, as well on regulations to govern trade remedies. In consequence, the 
launch of the customs union in December 2008  was deferred to a date to be agreed. 
(b) Southern Africa Development Community (SADC) 
31. Independence, security, regional solidarity, a nd the struggle against apartheid were the 
original motives for the founding of SADC.25  Its main goals today are to further common political 
interests and support greater trade and investment flows between members.  
32. Zambia is on target to meet its obligations  under the SADC free-trade area, which was 
launched in August 2008, so that 85% of goods from the region enter duty free; tariffs on the 
remaining sensitive goods will be phased out by 2012 .  The tariff phase-down is scheduled to continue 
during 2008-12, when Zambia is e xpected to eliminate its tariff on sensitive products (imports that 
compete with domestic industrial and agricultural products).  
33. The liberalization of tariffs has taken place at  different paces, with the more developed 
countries having reduced tariffs at a faster rate. South Africa, Botswana, and Namibia removed most 
tariffs in 2000.  Middle-income countries such as Ma uritius reduced their tariff s gradually each year 
between 2000 and 2008.  For least de veloped countries, such as Mozambique and Zambia, tariff 
reductions were generally introduced during 2007-08. 
34. In addition, the SADC FTA is facilitating th e movement of goods through:  harmonizing 
customs procedures and customs classifications;  in creased custom cooperation;  reducing costs by 
introducing a single, standardized document (Single Administrative Document) for customs clearance 
throughout the region;  and establishing one stop bor der posts, which cut the time spent at the border 
in half.    
35. The SADC regional integration programme is ambitious and includes, in addition to the 
establishment of the FTA by 2008, a customs union by 2010, a common market by 2015, a monetary 
union by 2016, and a single currency by 2018.  Ho wever, increased cooperation is more likely in 
specific sectors, particularly energy and transport (e.g. the North-South Corridor). There are relatively 
                                                      
24 Much of the intra-COMESA trade has been concentrated among a few of its members. Reasons for 
this include a lack of political commitment and political  stability in member countri es and weak balance-of-
payments and foreign-reserves positions. In some cases th ere are hardly any official trade links between member 
states. A further constraint has been  the strict and cumbersome rules of origin, which are open to conflicting 
interpretations, and there have been some instances of member countries refusing to honour the relevant 
certificate of origin presented with COMESA imports. In addition to these impediments, progress towards free 
trade is hampered by political tensions between member states.  Moreover, attempts at promoting cross-border 
investment and monetary harmonization have been superseded by initiatives introduced by the East African 
Community and the Southern African Development Community. 
25 Members are:  Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, 
Mauritius, Mozambique, Namibia, South Africa,  Swaziland, Tanzania, Zambia, and Zimbabwe. WT/TPR/S/219/Rev.1 Trade Policy Review 
Page 26 
 
 
advanced plans for member countries to link their power grids to help to create a regional power pool, 
and further proposals to develop cross-country infrastructure projects are also expected. 
(iii) Other agreements and arrangements 
(a) Cotonou Agreement 
36. The Cotonou Agreement, signed in 2000, estab lished a framework for cooperation over trade 
and aid between the EC and the 77 members of the African, Caribbean and Pacific (ACP) group of 
States.  It replaced four successive Lomé conventions26, running until 2020 and subject to revision 
every five years. Cotonou envisages a system of separately negotiated regional free-trade agreements known as Economic Partnership Agre ements (EPAs), under which th e ACP countries will gradually 
open their domestic markets to European products in return for duty-free ac cess to the EC market.  
The EPAs are to be WTO-compatible agreements th at include provisions on trade in goods, trade in 
services, development cooperation, trad e-related issues, and fisheries. 
37. According to the authorities, Zambia is party to the Eastern and Southern Africa (ESA) 
negotiating group, a sub-group of COMESA member states. The deadline to conclude the EPA with the European Commission was orig inally envisaged for December 2007, when the WTO waiver that 
allowed the EC to grant trade preferences under Co tonou expired. Given its broad scope, it was not 
possible to conclude a full EPA by the stated d eadline. Six ESA countries, therefore, initiated an 
interim EPA, which ensured continuity of market  access preferences for countries, and since 2008, 
negotiations have continued in all outstanding areas. 
38. Zambia initiated the Interim EPA in November  2007, but did not conclude negotiations on 
market access until September 2008. The final market  access offer envisages progressive elimination 
of customs duties on tariff lines covering 79.6% of imports from the EU, while Zambia will gain duty-
free, quota-free access to the EU market (with the exception of sugar and rice, which will be 
progressively liberalised). Zambia’s sensitive list excludes industrial and revenue sensitive products 
from the liberalisation process. Zambia also benef its from the EU’s Everything but Arms Initiative, 
which grants duty-free market access to LDCs. Zambia  has been exporting under this regime prior to 
conclusion of the EPA market access negotiations . Zambia is currently benefiting from both the 
Everything but Arms Initiative and the Interim EPA.  
(b) African Growth and Opportunity Act (AGOA) 
39. The AGOA amended the U.S. Generalized System of Preferences (GSP) statute with respect 
to AGOA-eligible beneficiaries by extending duty-free treatment until 2015 and expanding GSP 
product coverage (about 4, 600 products) by more than 1,800 ad ditional tariff lines.  In 2006, over 
98% of U.S. imports from AGOA–eligible coun tries entered the United States duty-free.  In 
December 2006, the U.S. President signed the A frica Investment Incentive Act (AGOA IV), which 
enhances AGOA trade benefits for eligible sub-Sa haran African countries and strengthens economic 
engagement between the United States and s ub-Saharan Africa.  The AGOA provides duty-free 
access to the U.S. market for substantially all pr oducts exported from 38 eligib le sub-Saharan African 
countries.  Zambia is AGOA-eligible, including for textile and apparel benefits.  According to the 
                                                     
 
26 Under the Lomé conventions, the EC granted non-reciprocal trade preferences to the ACP countries. 
Their goods, whether agricultural or industrial, entered the EC duty free, although four agricultural products –beef, sugar, bananas and rum – were subject to a more restrictive system of tariff quotas. Zambia WT/TPR/S/219/Rev.1 
 Page 27 
 
 
USTR, Zambia’s 2006 exports under the AGOA and its  GSP provisions were valued at US$369,000, 
representing about 1% of total Zamb ian exports to the United States.27   
40. COMESA member states have lobbied activel y for increased access to  opportunities offered 
under the Africa Growth and Opportunity Act (AGOA).28  Of the 20 COMESA member states, 
Zambia and 12 others are eligible. Zambia has also  been declared eligible  to receive AGOA textiles 
and apparel benefits and enjoy unlimited duty-free and quota-free access to the U.S. market for 
apparel made in Africa from U.S. fabric, yarn, and thread. 
(c) Double taxation agreements 
41. Prior to the review period, Zambia had signe d double taxation agreem ents (DTAs) with a 
number of its important trade and investment partners.29  The DTAs with tax-sparing provisions are 
with: Denmark, India, Ireland, Japan, Kenya, Netherlands, Norway, Sweden, United Republic of 
Tanzania, Uganda, and the United Kingdom.  The e xpansion of Zambia’s DTA network to more 
Asian countries from which Zambia is trying to attract  FDI, particularly Chin a, is currently under 
review.    
(5) INVESTMENT POLICY FRAMEWORK  
42. FDI issues are governed by the 2006 Zambia  Development Agency (ZDA) Act, which 
replaced the Investment Act.  It introduces new investment regulations, but does not distinguish 
between treatment for domestic and foreign investors.  Under the Act, foreign investors may invest in 
any activity open to the private sector.  The only activ ities potentially closed to the private sector are 
arms production, the manufacture of dangerous su bstances and the production of coins and security 
documents, for which case-by-case investment approval is needed.  The ZDA processes investment 
licences for companies that wish to  operate in a multi-facility economi c zone or access incentives in a 
priority sector, and for projects that meet the threshold requirement of US$500,000. 
43. The principal form of approval under the ZDA Act is the grant of an investment licence.  For 
a foreign investor, an investment licence means that guarantees in the ZDA Act on important matters 
such as funds transfer, due process in expropriation,  and recourse to adequate dispute settlement will 
apply.  Larger investors may also be eligible for privileges under certain conditi ons in relation to taxes 
and expatriate recruitment.  Applicants for an inv estment licence must satisfy the ZDA Board that the 
investment will have developmenta l benefits and not harm the environment.  These requirements are 
in addition to regulatory requirements in the activit y concerned.  The proposed investment licence is 
valid for ten years and is subject to renewal. The ZDA holds licensing meetings every month and 
assists licensed investors to obtain other licences appli cable in the sector in which they are investing. 
44. Investors in communications, banking, tourism, transport, mining, health, education, and 
aviation must also comply fully with additional regulatory requirements and receive approval from 
                                                      
27 AGOA IV extends the third-country fabric provision, adds an abundant supply provision, designates 
certain denim articles as being in abundant supply, an d provides duty-free treatment for certain textile and 
textile articles (non-apparel) imported from lesser-deve loped AGOA beneficiary countries.  See Office of the 
United States Trade Re presentative (2008). 
28 COMESA in conjunction with the International Executive Service Corps (IESC), has set up AGOA 
Linkages in COMESA (ALINC) Desks at the COMESA S ecretariat in Lusaka and Washington.  These ALINC 
offices aim to increase awareness of AGOA among key stakeholders and should further help in stimulating 
exports of eligible products from the COMESA region to the United States. 
29 DTTs facilitate cross-border activity by clarifying  the extent to which a TNC’s operations will be 
taxable in the host country. WT/TPR/S/219/Rev.1 Trade Policy Review 
Page 28 
 
 
relevant sectoral authorities.  For example, inv estment projects located in a Game Management Area 
require a permit issued by the Zambia Wildlife Au thority, tourism investments require a Tourist 
Authorization Licence, and hotel investments requi re hotel licences.  The Bank of Zambia issues 
banking licences for banks and non-ba nk financial institutions;  the Communications Authority of the 
Ministry of Transport and Communications issues radio and telecommunications licences;  and the 
Ministry of Mines and Minerals Development issues  a wide range of permits  and licences relating to 
investment in the mining sector.   
45. However, the private sector development reform programme is expected to reduce the cost of 
doing business, inter alia,  by reviewing the number of required licences with a view to reducing them. 
The establishment of the ZDA as a one-stop investment promotion facility is designed to shorten the period for business registration from 21 days to less than 3 days.