WORLD TRADE  
ORGANIZATION  WT/TPR/M/231 
13 July 2010 
 (10-3824) 
Trade Policy Review Body 
9 and 11 June 2010  
 
 
 
TRADE POLICY REVIEW 
 
MALAWI 
 
Record of the Meeting  
 
Chairperson:  H.E. Mr. Bozkurt Aran (Turkey) 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF MALAWI 4 
III. STATEMENT BY THE DISCUSSANT 10 
IV. STATEMENTS BY MEMBERS 14 V. REPLIES BY THE REPRESENTATIVE OF MALAWI AND ADDITIONAL 
 COMMENTS  28 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 34 
 
Note:   Advance written questions by WTO Me mbers and the replies provided by Malawi are 
reproduced in document WT/TPR/M/231/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.    WT/TPR/M/231 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The second Trade Policy Review of Malawi  was held on 9 and 11 June 2010.  The 
Chairperson H.E. Mr. Bozkurt Aran (Turkey) we lcomed the delegation of Malawi, headed by 
Mr. Newby Kumwembe, Secretary of Industry and Trade in the Ministry of Industry and Trade, and 
the discussant, Mr. Zhang Xiangchen  (China).   
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Malawi was contained in document WT/TPR/G/231 
and that of the WTO Secretariat in WT/TPR/S/231. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delegation of Malawi:   Canada, the United States, the EU, 
Japan, and China.  
4. The following delegation submitted written questions  after the two-week deadline:  India.   
5. The Chairperson said that he had considered  the reports prepared by Malawi and the 
Secretariat.  Both reports noted that since its first Trade Policy Review in 2002, Malawi's economy 
had posted robust growth, with real GDP growth av eraging 6.3% between 2003 and 2009.  However, 
the macroeconomic situation remained precarious, with  considerable rigidity in the exchange rate 
regime, dwindling foreign exch ange reserves and the vulnerability of the economy to exogenous 
factors. 
6. Since its last TPR, Malawi had made progress in reforming its trade policy regime in the areas 
of customs procedures, competition policy, government  procurement, and privatization of some state-
owned enterprises.  However, the Government recogni zed the need for further reforms of the business 
environment to attract investment as many of Mala wi's trade-related laws were outdated and required 
extensive revision to align them with international best practice.  Production and exports needed to be 
diversified so that growth was less dependent on exogenous factors, such as the weather. 
7. The Secretariat noted that although the averag e applied MFN tariff had declined, Malawi's 
tariff remained complex with many exemptions.  Ma lawi would stand to benefit from a rigorous tariff 
simplification exercise:  a lower and more uni form tariff without exemptions would promote 
economic efficiency, reduce administrative cost s, and possibly raise more tariff revenues.  
8. The Government was keen to promote more projects with a direct impact on economic 
growth and infrastructure development.  Mainstr eaming of trade in the successor strategy to the 
Malawi Growth and Development Stra tegy 2006-11 would be important in this regard.  As part of this 
process, attention should be given to the future de velopment of the services sector, in particular 
tourism, and the necessary investment in hum an capital to enable growth in services. 
9. He noted that Members would be interested in  learning more about the government's efforts 
in these and other areas.  For instance, how did th e Malawi government intend to deal with the major 
challenges, especially in the areas of agriculture  and energy.  More generally, what were the 
Government's reform priorities? 
10. He emphasized that “aid for trade” was a main feature of Malawi's TPR (indeed, Chapter 5 
was devoted to the subject) and the need for donor s to continue to provide such aid and other 
assistance, notwithstanding their curre nt difficult fiscal circumstances. WT/TPR/M/231 
Page 4  
 
  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF MALAWI 
11. Malawi firmly believes in the transparency that the trade policy review process seeks to 
promote, and thus re-affirms its commitment to ope ning up our trading regime for evaluation within 
the context of its obligations under the WTO. This  commitment is a demonstration of the country’s 
unrelenting support and belief in the multilateral process. 
12. I would also like at this juncture to express my  delegation's gratitude to the WTO Secretariat 
for the work carried out in Malawi, which resulted in  the report that has been circulated, which meets, 
to some degree, our expectations in terms of its quality and comprehensiveness.  We did not spare any 
efforts to make this TPR a success. In this regard, I wish to advise that my Government has made a 
number of amendments to the Secretariat report and I would, therefore, like to have them incorporated 
in the final reports. 
Economic Performance 
13. Since the last trade Policy Review in 20 02, the Government has continued to pursue 
economic policies aimed at transforming the ec onomy from being a predominantly importing and 
consuming country to a predominantly producing and exporting economy.  The primary goals of the 
Malawi government are to reduce poverty, create w ealth and achieve sustainable economic growth 
while maintaining stable prices and realizing a viable  balance of payments position.  In this regard, 
the Government will continue to pursue polici es that reduce fiscal imbalances in the economy, 
diversify the export base and destination markets wi th the view to broaden the economic base.   
14. Since 2003, very important milestones have  been achieved in terms of economic 
performance. Real GDP growth has averaged 6.3% pe r year, and reached 7.7% in 2009.  Strong fiscal 
and monetary policies drastically reduced inflati on to single digits of 7.9% and 8.7% in 2007 and 
2008, respectively.  In 2008, the economy recorded a robust growth in real GDP of 9.7%, compared to 
8.6% achieved in 2007.  This growth rate is above  the target of 6% required for Sub Saharan African 
Countries to meet the Millennium Development Goals (MDGs). Concom itant to the growth rate has 
been a reduction in the rate of poverty from 65% to 40% of the population.  
15. As a result of its good economic performance, Malawi benefited from debt relief under the 
Highly Indebted Poor Countries (HIPC) initiative. A post debt relief Sustainability Analysis carried 
out in 2007 indicated that the country's external de bt will remain sustainable over the medium term. 
Policy Thrust 
16. The vision of Malawi is to produce and export. This vision is anchored on the Malawi Growth 
and Development Strategy (MGDS).  The MGDS is Ma lawi’s developmental framework. It is at the 
pinnacle of the country’s growth in itiatives. It harnesses our efforts into  five thematic areas which are: 
sustainable economic growth, social protection, soci al development, infrastructure development, and 
improved governance.  The overriding goal of the Mala wi Government has been to provide a coherent 
and consistent economic framework that underpin s the developmental objectives outlined in the 
MGDS.  This drive for economic stability is aime d at enhancing sustainability of economic growth 
and poverty reduction. 
17. In the realization of the need to be system atic in the implementation of the MGDS, the 
government identified nine key priority areas among priorities of agriculture and food security; green-
belt initiative and water development;  education, science and technol ogy;  transport infrastructure 
and Nsanje World Inland Free Port;  climate change, natural resour ces and environmental 
management;  integrated rural development;  pub lic health, sanitation and HIV/AIDS management;  
youth development and empowerment;  and energy, mining and industrial development. The MGDS  WT/TPR/M/231 
 Page 5 
 
 
  will come to an end in 2011, and as such the Gove rnment is in the process of formulating a successor 
strategy to the MGDS. 
18. Other notable developments that have taken place since the last trade policy review that are 
outlined in our report include:  the continued impl ementation of the privatization programme, which 
commenced in 1996.   By 2006, 65 entities had been privatized or divested.  You may note that the 
Government has now embraced public/private pa rtnerships as a way of stimulating private 
participation and infrastructure development, whic h is a key component of the development policy. 
To this effect, a Public-Private Partnerships (PPP)  bill will soon be submitted to  parliament to provide 
for a legal basis for this partnership. Mala wi has since established the Malawi Competition 
Commission and the energy regulation board which we  had reported to be in process during Malawi’s 
first trade policy review.  
19. Export earnings continue to be generated ma inly from exports of primary agricultural 
products accounting for nearly 90% of merchandise exports. These are mainly tobacco, sugar and tea. 
Other exports include manufactured exports which account for only 15% of total exports. Realising 
the importance of manufacturing to the growth of the economy, the country’s policy thrust is to 
diversify its export base from the traditional expor ts of tobacco, tea and sugar through focusing on 
value addition of other crops as well as beneficiation of  natural resources.  In the scheme of things, an 
area that has been identified as of great export poten tial is the cotton sector. In this regard, Malawi 
calls for support to be provi ded to the development aspects of cott on. We believe that the initiatives in 
the WTO pertaining to cotton should also benefit Malawi. 
20. One new area which will spur Malawi’s growth is the mining sector. With the opening of the 
Kayelekera Uranium mine, Malawi is poised to  increase its export earnings considerably. The 
discovery of Nobium will also serve to enhance th e performance of the sector. In order to encourage 
investment in the sector the government is continually improving the investment climate for the sector through measures such as duty free importation of equipment as well as tax holidays in some instances.  Let me also mention that the tourism sector which is mostly untapped presents growth 
potential that could earn Malawi increased foreign exchange. 
21. Let me take this opportunity, to inform you,  that Malawi’s agricultural output has been 
growing since 2004. This growth has been led by smallholder farmers who have responded and taken 
advantage of the farm input subsidy which has e nhanced the food security situation in the country. 
The subsidy programme targets the growing of mai ze and it has further stimulated diversification 
towards cash crops and livestock development.  Other initiatives in the agriculture sector 
complimenting the subsidy programme include the green belt initiative. The objective is to ensure 
sustainability of food security in Malawi. Emphasis is also being undertaken in improving agricultural 
research and technology. 
22. There were also significant developments in  the banking and insurance sectors during the 
period under review. A new Banking Act and new Insu rance Act were enacted in 2009.  Five new 
commercial banks were granted licences by the R eserve Bank of Malawi over the period bringing the 
total number of commercial banks to 11.   Four  of the banks were listed on the Malawi Stock 
Exchange.  Overall, the financial performance of th e commercial banks has been satisfactory with all 
banks adequately capitalized. 
23. As a way of improving the business environment,  the Government has been developing a 
coherent legal and regulatory framework. To this  end, the government has promulgated a trade 
remedies bill and is in the process of review ing 44 commercial and trade related laws under the 
Business Environment Support Technical Assistance  Project (BESTAP), which is supported by the 
World Bank. Laws which are under review include  the Companies Act, the Taxation Act, the 
Communications Act, the Business Licensing Act,  the Arbitration Act, the Business Names WT/TPR/M/231 
Page 6  
 
  Registration Act and the Control of Goods Act, I nvestment and Export Promotion Act, Customs and 
Excise Act, the Export Processing Zones Act, the E xport Incentives Act, and the Competition and Fair 
Trading Act.  
24. Apart from changing the laws to make them more pro-business the Government is also 
carrying out institutional reforms to ensure that institutions offering services to the private sector 
operate in the most effective manner. In this regard  several institutions have been merged effective 1st 
July, 2010. Some of these include the Malawi Inv estment Promotion Agency (MIPA), and the Malawi 
Export Promotion Council (MEPC), the Development of Malawian Enterprises Trust (DEMAT), Small Enterprise Development Orga nization of Malawi (SEDOM), a nd the Malawian Entrepreneurs 
Development Institute (MEDI).    
25. The Government has developed the National I nvestment Policy to address obstacles to doing 
business in Malawi including creating a conducive business investment climate. Furthermore, the government is committed to ensuring a strong partne rship between the public and private sector and 
has institutionalized its collaboration with the priv ate sector through the creation of a Public Private 
Sector Dialogue (PPD) Forum which serves as a platform for discussing issues affecting business in 
Malawi.  
26. The Government realizes that maximum benef its from trade can only be attained if we 
produce high quality goods and services. To this ex tent, the Government has been enhancing the 
capacity of the Malawi Bureau of Standards to offer better services in accreditation, standards, 
certification and quality assurance. 
27. The Government also recognizes the importance of the services sectors to sustainable 
economic growth. As such, Malawi is negotiating ser vices liberalization at regional levels with the 
view to improve market access. The priority sector s that have been identified include tourism, 
transport, construction, Information Communica tion and Technology (ICT), energy, and banking.  
With regard to tourism the government intends to establish Malawi as a principal eco-tourism 
destination in Africa. The government is also review ing specific laws that pertain to trade in services 
to make them compatible with the WTO, hence but tress its efforts in improving the sector considering 
its importance to development. 
28. Under the energy sector, several measures amongst them the removal of customs duties on 
equipment to encourage investment in renewabl e energy have been introduced. There are ongoing 
reforms on legal and institutional framework of the sector. Furthermore, the Millennium Challenge 
Cooperation (MCC) has plans to assist Malawi undertake a comprehensive rehabilitation of the 
Kapichira hydroelectric power station which will make  64 Megawatts available.  The Government is 
also in the process of attracting new investors in the sector considering that the country's untapped 
generation capacity is around 1,025 megawatts. 
29. In transport notwithstanding other efforts to im prove connectivity to external markets, a major 
programme which is expected to greatly facilitate Malawi’s integration into  the multilateral trading 
system is the Shire-Zambezi Waterway Project , a multimodal inland transport linkage, and the 
establishment of the Nsanje World-inland Free Port. These projects will reduce the cost of 
international transportation by as much as 60% and thereby reduce the country’s cost of production 
and make our exports more competitive. Malawi is , therefore, requesting additional support from its 
development partners to support th is important initiative which is expected to contribute to the 
achievement of the Millennium Development Goals.  
30. The Government is aware of the potential ne gative impact of the HIV/AIDS pandemic on 
trade and investment and the economy in general. To this extent various mitigation programmes are 
being implemented in public sector institutions with a view to containing the effects of the pandemic.  WT/TPR/M/231 
 Page 7 
 
 
  The private sector is also actively implementing mitigation programmes through the Malawi Business 
Coalition Against HIV/AIDS. 
31. Being an agricultural country, Malawi cannot ignore issues of climate change as well as the 
environment in the light of their potential to aff ect trade, investment and manufacturing. In this 
regard, Malawi has enacted the environment relate d legislation to address these matters. Furthermore 
Malawi is encouraging irrigation through the Green  Belt Initiative which aims at irrigating 1 million 
hectares for land to grow various crops and engage in effective agro-processing. 
32. You will also note that since the 1980s, Mala wi has been implementing economic reforms 
under the World Bank and IMF-supported economic st ructural adjustment programmes which have 
progressively enhanced the openness and the transparency of the economy. Among the many 
initiatives by the Government, the list of products th at are subject to licensing under the Control of 
Goods Act is almost non-existent. The import licensing system applies to a few commodities 
originating from all sources based on health , environmental and security concerns.  
33. The Government has also eliminated the re quirement for industrial licensing, except for 
manufacturing of weapons and radio-active material s and the processing of waste. In addition, it 
liberalized exchange markets, introduced investment  reforms and reduced import duties to the extent 
that the applied MFN rate averaged 13.1% in 2009 co mpared with a simple average rate of 13.6% in 
2001.  
34. Let me at this juncture mention that, Malawi has made significant improvements in its tariff 
profile since the last review.  These improvements in the tariff structure signify its commitment to facilitate trade by creating a simplified and transp arent trading environment for economic operators. 
Malawi will continue with efforts to simplify its ta riff structure in line with the international trends. 
The applied MFN tariff has six bands, with a maximum rate of 25%.   
35. At the regional level, Malawi continues to pa rticipate actively in the regional integration 
agenda programmes of the Common Market for E astern and Southern Africa (COMESA) and the 
Southern African Development Community (SADC). Since October 2000 Malawi has been one of the 
11 countries participating in the COMESA free trad e area and is implemen ting tariff reductions under 
the SADC protocol on trade.  
36. To deal with dual membership, Malawi is participating in the Tripartite process of 
harmonising programmes among the three regional groupings of COMESA, SADC and the East 
African Community. Malawi fully supports the pr oposed launch of an expa nded FTA among the three 
regional economic communities which will take place in 2012. 
37. Malawi continues to participate in the Econom ic Partnership Agreemen ts negotiations with 
the EU. Malawi has not yet initialled the EPAs in view  of some challenges that have to be addressed 
hence negotiations with the EU are continuing. 
38. Malawi is also a signatory to the Cotonou Agre ement and, a beneficiary to the Everything But 
Arms Initiative offered by the European Union, th e African Growth and Opportunity Act offered by 
the United States, the Canada Initiative, the Japan  Initiative, the India Initiative and the China 
Initiative for LDCs from which Malawi  is keen to derive maximum benefits.  Malawi therefore, 
wishes to commend these bilateral donors and othe r cooperating partners for these initiatives that 
avail such schemes to LDCs like Malawi.    WT/TPR/M/231 
Page 8  
 
  Future prospects 
39. Given the tremendous growth Malawi has expe rienced over the five years and the positive 
strides it has taken to improve its business environment,   I am more than convinced that the stage is 
set for Malawi to attract more investment and in crease trade. With mega projects such as the green 
belt initiative and the Nsanje World Inland Port our trade can only but improve. However, this 
improvement will require multilateral support. As government, we are more than ready to continue 
with reforms necessary to cr eate a conducive environment. 
Malawi’s position on multilateralism 
40. Since the coming into force of the Uruguay R ound Agreements Malawi, like other LDCs, has 
been significantly beset by problems arising from th e implementation of these agreements. Indeed the 
Geneva Ministerial Declaration duly recognized th e marginalization of the LDCs and certain small 
economies, in this regard. Malawi is no excep tion. The effective implementation of the WTO 
commitments by Malawi continues to be hampered by  the lack of adequate financial, institutional, 
technological and technical capacities. 
41. Malawi would, therefore, like to call for re newed commitment to technical cooperation, 
including adequate provision of resources in the re gular budget of the WTO, and other core agencies 
according to their mandates.  Furthermore, we emph asize the need for improved coordination in the 
delivery of this assistance as an urgent requirement  to facilitate our effective participation in the 
multilateral trading system. 
42. The development perspectives should first and fo remost achieve the objectives spelt out in the 
Preamble to the Marrakesh Agreement and should en able the worlds people, particularly LDCs like 
Malawi, to contribute fully and equitably in th e achievements of the multilateral trading system. 
43. Consequently, this would bring about a sustaine d rise in the income of Malawi as an LDC and 
offer real prospects for economic growth and poverty eradication.  We believe that more attention 
should be devoted to ensuring degrees of flexibilit y to address the development constraints we are 
confronted with. 
44. With regard to the mandated negotiations, we ac knowledge the vital role of the agricultural, 
industrial goods and services sectors to our economic growth and development.  As alluded to earlier 
on, the development of the agricultural sector in our  country is crucial for trade growth, employment 
creation, environment protection and social cohesion.   Bearing this in mind, it is our governments’ 
plea that the ongoing reform and liberalization of the international agriculture trade should, therefore, 
lead to increased productivity, improved access to world markets for all of Malawi's agricultural 
exports. 
45. We, therefore, hope that the Doha Developmen t Round will entail the establishment of fair 
and pro-development rules-based multilateral tradi ng system, which enhances our trade potential and 
creates sufficient policy space to facilitate our continued development.   
Concluding remarks 
46. In conclusion, it is important to note the treme ndous efforts that the Government of Malawi is 
undertaking in fulfilling its obligations under the WTO Agreements despite its li mited resources as an 
LDC.  It recognizes, however, that the adoption an d adjustment of legislation and regulation for a 
better implementation of some WTO Agreements has been taking place at a slower pace than it would 
have liked and the required notifications of its trad e policies has been outstanding for some time.  This 
situation is attributable, to a large extent, to th e lack of adequate institutional capacity, technical  WT/TPR/M/231 
 Page 9 
 
 
  infrastructure, financial resources and human capital.   This reinforces the n eed for capacity building 
programs. 
47. Supply side constraints still remain Malawi’s  major obstacle to integration into the 
multilateral trading system. Some of the  major cons traints include high transportation costs, inability 
to meet SPS requirements and sta ndards, insufficient  and unreliable  energy and water supply, 
customs  procedures and documentation, just to menti on a few.  In this regard, Malawi needs external 
support such as increased developmental assistance,  debt write-off, increased balance of payment 
support, technology transfer, and increased FDI flows, among other forms of support. Assistance 
provided through aid for trade programs such as the integrated framework and its successor the 
Enhanced Integrated Framework and the JITAP c ould compliment the above mentioned forms of 
support. 
48. At this point, let me acknowledge the succes sful operationalisation of the Enhanced 
Integrated Framework for least developed countries. The guiding principles of the programme, including ownership by least developed countries, and the financial commitments being made are a 
recipe for success. We note with gratitude that , among others, Malawi’s Tier One Project was 
approved on 23 September 2009.  We are confident that  initiatives such as the IF  and its successor the 
EIF will help Malawi address its supply-side constraints. 
49. Finally, I would like to reiterate Malawi's co mmitment to the multilateral trading system.  
Malawi, like any other least developed country, will st rive to contribute to the strengthening of the 
multilateral trading system. WT/TPR/M/231 
Page 10  
 
  III. STATEMENT BY THE DISCUSSANT (Mr. 
Zhang Xiangchen (China))  
50. I would like to state clearly at the very beginni ng that when we review the trade development 
and policies of Malawi, we should not look at the figures in the reports in isolation. I believe the 
correct way for us is doing it in a historical pe rspective, which leads us to better understandings, 
objective comments and reasonable policy suggestions . Therefore, before touching on the specific 
issues, I would like to remind everyone that we s hould keep the national conditions of the landlocked 
LDC in mind when we make comments and suggestions. 
51. According to the Secretariat Report, there are some very impressive features of the economic 
achievements made by Malawi since 2002 which I w ould like to highlight.  First, it has achieved 
encouraging economic growth since 2003, with an a nnual average growth of 6.3% and it reached to 
7.7% in 2009. At the same time, Malawi has succeed ed in reducing its inflation rate from more than 
20% to less than 10%. The proportion of public debt , including domestic and foreign debt, in its GDP 
has decreased significantly, which is conducive to the improvement of its fiscal situation. 
52. Second, in spite of the challenge of the world financial crisis, Malawi has not retreated from 
its open policy stance. The applied MFN tariff rate  averaged 13.1% in 2009 and non-tariff barriers are 
generally absent. It also actively participated in th e negotiations of regional trade agreements, such as 
COMESA and SADC, for its further trade liberalization. 
53. Third, Malawi keeps open to foreign investment , offers EPZ status for non-traditional exports 
and streamlines procedures for business and land regi stration. Since 2003, FDI inflows rose more than 
three-fold to US$169.3 million in 2008. Th e stock of FDI rose from US$378 million to 
US$627 million during the review period. 
54. Fourth, as a result of economic growth and releva nt social policies, GDP per capita grew from 
US$210 in 2003 to US$356 in 2009 and the proportion of the population living on less than one dollar 
a day has declined dramatically, from nearly 54% in 1998 to 40% in 2007.  
55. The achievements made by Malawi have demons trated again that trade liberalization with 
proper domestic policies is an effective way to rea lize development and to fight against poverty. At 
the same time, while Malawi cannot  separate itself from the rest of  the world economy and go beyond 
its development stage, it has to face some challenges like other LDCs. 
56. The major one is to continue with poverty reduction. People in dire poverty still take up more 
than one third of the population. Only 15.3% of th e population live in urban areas while 84.7% reside 
in rural areas. What measures the Government e nvisages to make sure that economic growth is 
serving the purpose of poverty reduction? 
57. To keep economic growth sustainable is anothe r big challenge. Lack of diversification in 
industrial structure and the vulnerable infrastructur al facilities are the bottlenecks that constrain the 
capacity of self-development. Mean while, the Malawian Government has been facing the difficulties 
in coordinating short term and long term objec tives according to the limitation of its budget. 
58. Beside these traditional challenges, owing to Malawi’s integration into the global market, 
some new global issues, especially the climate change , also threat its future development. According 
to a research report issued by ICTSD recently, the climate change may cause 20% reduction of 
Malawi’s agricultural export.  I would like to ask th e Government of Malawi to share with us their 
experiences and views on how to meet the above cha llenges, which I believe are also very important 
and helpful for other developing Members, especially LDCs.   WT/TPR/M/231 
 Page 11 
 
 
  59. Next, I will focus my intervention on f our main aspects, namely macroeconomic 
environment, trade policy regime, sectoral policies, and Aid for Trade. 
Macroeconomic Environment  
60. The positive growth rate of real GDP, the significant reduction of the inflation rate and the 
increase of the revenue reflect the progress made from a macroeconomic perspective. The Malawi 
Growth and Development Strategy adopted in 200 6, has made great contribution to the economic 
growth and economic framework improvement. Since the MGDS will come to an end in 2011 and the 
Malawi’s Government is in the process of formulating a successor strategy.  
61. According to the economic indicators, we can see three main constraints on Malawi’s 
economic growth. First, Malawi's economy is ag riculture based and relies heavily on exports of 
tobacco, tea and sugar. As a result, it is vulnerable to the vagaries of weather and terms of trade 
shocks. The Government has recognized that the pr oduction and exports need to be diversified, but 
the share of agriculture and mining in GDP increased  marginally during the review period. It’s a 
difficult and painful task which requires significant private-sector involvement and further efforts to reform the business environment to attract FDI.  
62. The second limitation is related to  balance of payments. Malawi had a projected current 
account deficit of US$1.09 billion in 2009, which is al most as triple as that in 2003. The rising current 
account deficit reflects an increasing gap be tween gross national saving and gross domestic 
investment. And Malawi needs strong growth in  foreign exchange reserves and further fiscal 
consolidation. However, the capacity and resources  owned by the Government are very limited. How 
could Malawi resolve this problem not at the expense of its development expenditure? 
63. The inadequate infrastructure is another big c onstraint which is not unusual in LDCs. As a 
land-locked country, Malawi naturally faces hi gh transport costs, which impede its export 
competitiveness directly as well as indirectly when  the production of export goods requires imported 
inputs. Besides, the shortfall in electricity supply is also one of the most serious difficulties because 
Malawi lacks a transmission infrastructure for importing electricity. It is one of the few SADC 
countries not yet connected to the regional grid. Do es the Government have any strategy to overcome 
these difficulties? 
Trade and investment policy regime 
64. Malawi’s trade in goods and service rose from 67% of GDP in 2003 to 83% of GDP in 2009, 
reflecting increased reliance on trade.  On the domestic front, Malawi has made progress in reforming its trade policy regime in the areas of customs procedures, competition policy, government 
procurement, and privatization of some state-owne d enterprises. The Government offers a number of 
incentives for export industries and provides tec hnical assistance to the registered exporters. 
65. On the international front, Malawi particip ates in the DDA negotiations through LDC, ACP 
and African Groups and has a particular interest in the elimination of trade-distorting domestic 
support and export subsidies in the cotton sector and in special and differential treatment.  Meanwhile, 
Malawi has developed a few bilate ral and regional trade agreements, such as COMESA and SADC. It 
also has some other preferential trade arrangements with the U.S., the EU, China and other economies. Could the Malawi Delegation share with us its evaluation on the effectiveness of these 
arrangements? And are there any future plans?   
66. According to the Secretariat Report, the tariff re gime is one of the main concerns on trade. 
Although the average applied MFN tariff is not high , the overall tariff structure is complex and the 
majority of tariff lines are not bound, which gives rise to concerns of unpredicta bility. It is understood WT/TPR/M/231 
Page 12  
 
  that tariff represents significant proportion of Malawi’s tax income and the main trade policy 
instrument as in many other small economies. Ho wever, the complexity may lead to potential 
efficiency losses of the industries. Noting the negative effects of the tariff structure, Malawi may wish 
to take necessary measures to simplify it. 
67. Moreover, trade facilitation is vital for Malawi  to reduce the administ rative costs associated 
with trading across borders. While regional road  hauling has been liberalized under COMESA 
initiatives, transit procedures are still lengthy and ha ve yet to be fully harmonized in the region. 
Therefore, further trade facilitation would be welcome. 
68. Malawi is open to foreign investment. Fore ign investors are generally granted national 
treatment. But Malawi does not perform favourably co mpared to most of its neighbours in terms of 
starting a business because of the geographical and some institutional reasons. Malawi has launched 
several projects to support the capacity developmen t and investment climate reforms, among which 
the BESTAP is the major one. It would like to know  what is the effect of the BESTAP and whether 
there will be further efforts to attract foreign investment.       
Sectoral policies 
69. Agriculture is the backbone of Malawi's ec onomy, which contributes over one third of the 
GDP, almost 90% of employment, and about 90% of Malawi's foreign exchange earnings from 
merchandise exports. Malawi has expe rienced several food emergencies during the review period.  At 
the same time, the sustainability of agricultural production is thr eatened by the severe land pressure 
and the loss of soil fertility. Due to the lack of mechanization and modern irrigation, the production 
still largely depends on the rainfall. The two f undamental questions are how to modernize the 
agricultural production and how to develop and enha nce the capacity of processing and marketing. As 
the Secretariat Report indicates, one big challenge is that fertilizer subsidies absorb large proportions 
of Malawi's agricultural budget. There is little r oom for investments on the above-mentioned issues. 
The question comes again on how to balance short-te rm and long-term investment in the agricultural 
sector.  
70. Services account for almost half of Malawi 's GDP. Under the GATS, Malawi has made 
specific commitments in 33 service sectors, which is  slightly more than the average of LDCs. The 
financial system of Malawi is stable and in the process of modernization. Its institutional and legal 
framework has not changed since the last review. Its regulatory regime remains fragmented and said 
to be reformed soon. Could Malawi elaborate th e reform plan and when it will be implemented? 
71. Finally, as mentioned at the beginning of the mee ting Aid for Trade is the main feature of the 
trade policy review for Malawi.  Throughout Malawi’s statement, and also in the Secretariat Report, 
there are numerous references to Malawi’s lack of  capacity and other constraints in various trade 
related areas, and the need for technical assistan ce to overcome these deficiencies. Indeed, the 
Secretariat Report contains an entire section on Aid for Trade in which Malawi’s needs are clearly set 
out. 
72. I share the views and believe that the main ai m of Aid for Trade is to support Malawi to 
achieve self-sustained economic gr owth and development. It also  should focus on strengthening its 
capacity not only to negotiate preferential trade ag reements, but also to benefit from them through 
enhanced supply capacity. Therefore, I would encour age all donor countries, in particular Malawi’s 
major trading partners, to give seri ous consideration to how they can help to meet its real needs. At 
the same time, I would encourage the Government  of Malawi to continue its improvement of 
domestic institutions and business environment, and to  keep open its trade and investment. The efforts 
made by both sides will produce a virtuous cycle.  WT/TPR/M/231 
 Page 13 
 
 
  73. The development of developing countries, especi ally LDCs, may take a very long time which 
needs internal reform as well as external assistance . The weak basis and real constraints should be 
recognized and taken into account, when we review their development and policies. In my opinion, 
the purpose of trade policy reviews for developing Me mbers, especially LDCs, is not only to examine 
the implementation of their commitments and obliga tions but also to support them to maintain the 
right direction and provide positive suggestions.  WT/TPR/M/231 
Page 14  
 
  IV. STATEMENTS BY MEMBERS 
UNITED STATES 
 
74. Malawi has made noteworthy progress since its last trade policy review in 2002.  It has 
witnessed enviable economic growth – averaging 6.3% since 2003 and reaching 7.7% in 2009, when 
so much of the rest of the world saw low or negativ e growth rates.  At the same time, inflation has 
been reduced to single digits, public debt has been reduced, and the proportion of the population 
living on under a dollar a day has decreased.  The gove rnment of Malawi has also taken measures to 
address food security and to promote greater agricultural productivity, especially among small-holder farmers.   
75. We recognize that Malawi continues to face an array of daunting challenges – including 
supply-side constraints – as it seeks to participate more effectively in the global economy.  We hope 
that this trade policy review will help to spotli ght policy-related measures  that the government can 
consider in order to increase trade flows, boost ec onomic growth and diversification, and alleviate 
poverty.  
76. The United States enjoys a vibrant bilateral tr ade relationship with Malawi.  Two-way United 
States-Malawi goods trade totaled $105 million in 2009.  Although that is down four percent from 
2008, it is still a strong performance given the global drop in trade last year.  By comparison, U.S. 
two-way trade with sub-Saharan Africa was down 40%  in 2009.  Since 2000 Malawi has been eligible 
for trade preferences under the A frican Growth and Opportunity Ac t (AGOA).  In recent years, 
substantially all U.S. imports from Malawi have  entered the United States duty-free, either under 
AGOA, the Generalized System of Preferences (GSP) , or zero-duty most-favored -nation provisions.   
77. Malawi exports a wide variety of products to the United States under the provisions of AGOA 
and GSP, including tobacco, apparel, sugar, maca damia nuts, leguminous vegetables, and imitation 
jewellery.  At the same time, we  recognize that the government of Malawi wants to find ways to 
increase its utilization of AGOA and GSP trade preferen ces and to further diversify its trade with the 
United States.  We noted with interest, from the gov ernment’s report for this review, that the Malawi 
Ministry of Trade and Private Sector Deve lopment is finalizing National Export and AGOA 
Strategies.  In this connection, we would be happy to consult with  the government of Malawi on its 
plans for implementing these strategies, especially  the AGOA Strategy.  The USAID-managed Global 
Competitiveness Hub for Southern Africa, based in Botswana, has provided technical assistance to the 
government and private sector in Malawi on export diversification and may be able to help the 
government identify and develop new market opportunities under AGOA.   
78. We are pleased to note that Malawi is involved in two major U.S. initiatives related to 
economic growth and development:  the Millenn ium Challenge Account, administered by the 
Millennium Challenge Corporation (MCC), and Feed the Future, the United States’ global hunger and 
food security initiative.  In December 2007, Malawi  was named eligible fo r compact assistance from 
the MCC and is now in the process of developing a co mpact, which could be approved later this year.  
Malawi has completed a $20.92 million MCC thr eshold program focused in part on improving 
financial management and transparency.  In April 2010, the U.S. Government announced that Malawi 
was also among the potential focus countries of the U.S. Feed the Future initiative that aims to 
decrease hunger and poverty and improve food security.  We look forward to Malawi’s completion of 
its program to increase the country’s food security a nd the technical and high level reviews of those 
plans and the increased cooperation with Malawi  as it moves ahead to boost its food security. 
79.
 The Secretariat reports that, since the last review in 2002, Malawi has made progress in 
reforming its trade policy regime in several are as.  Such progress is important to improving the 
development, food security, and overall well-being of Ma lawi’s citizens.  The Secretariat’s report also  WT/TPR/M/231 
 Page 15 
 
 
  notes that much work remains to be done to bring Malawi’s trade-related la ws up to date and align 
them with the rules-based international trading sy stem.  We support the Secretariat’s recommendation 
that Malawi consider simplifying its tariff regime, which has become encumbered with a variety of 
concessions and drawbacks. We also support th e recommendation that Malawi prioritize trade 
facilitation, including in a regional context, in it s trade policy formulation as a way to mitigate the 
administrative costs associated with trading across borders.  We agree with the Secretariat’s point 
that, as a land-locked country, Malawi’s export co mpetitiveness is directly and indirectly challenged 
due to high transportation costs.  Finally, we support the recommendation that the government give 
higher priority to meeting its notification commit ments in the WTO.  Transparency in the world 
trading system is central to its effectiveness and credibility.  
80. We are pleased that the Secretariat devoted a chapte r of its report to the issue of aid for trade.  
One of its findings is that while trade is one of  the underlying objectives of the Malawi Growth and 
Development Strategy (MGDS), the MGDS does not sp ecify how to translate this goal into policy.  
We urge the government of Malawi, as it develops the successor to the first MGDS, to ensure that 
trade be mainstreamed into the strategy, consistent with the high level of attention the government has 
placed on export-led economic growth.  As part of this  process, attention should be given to the future 
development of the services sector, in particular tourism, and the necessary investment in human capital to enable growth in services. We are pleased  to take note that, under the GATS, Malawi has 
made specific commitments in 33 services sectors, whic h is slightly more than the average in least 
developed countries.  This kind of policy formul ation and choice is commendable and we would like 
to encourage it to continue. 
81. The United States has submitted a few questions on customs, SPS requirements, privatization 
of state-owned enterprises, intellectual property righ ts, and other topics described in the Secretariat’s 
report. We thank the government of Malawi for providing answers to our questions, and we look 
forward to reviewing them.  
82. Finally, while recognizing the capacity constraints that have limited Malawi’s participation in 
WTO meetings, we encourage Malawi to play a mo re active role in the Doha Development Agenda 
negotiations.  As the government notes in its repor t, an “ambitious outcome” of the Doha Round is 
“crucially important to create economic prosperity a nd growth globally”.  We agree and believe that 
LDCs such as Malawi have much to gain from a balanced and ambitious result in the Doha 
negotiations that include meaningful new market access  for all.  Such a result could further enhance 
opportunities for Malawi to broaden its export base,  its export markets and hence its opportunity to 
diversify. The United States looks forward to work ing with Malawi toward bringing the round to a 
successful conclusion.  And we offer all good wish es to the government of Malawi for a successful 
Trade Policy Review 
EUROPEAN UNION 
83. We note that Malawi’s economic growth has accelerated in recent years reaching a new 
record of 9.7% in 2008. However, Malawi's  economic performance remains vulnerable to 
considerable risks. Indeed, the forecast of growth  for 2010 has already been significantly reduced.  
84. The immediate causes are appa rent: Malawi's economy is s till excessively reliant on 
agriculture with unstable, rainfall- dependent yields. An overwhelming sh are of the value of its exports 
comes from only a few primary commodities. 
85. In addition to policies enabling permanent impr ovements in agricultural productivity, Malawi 
must therefore urgently pursue diversification of its production and expor ts in order to support 
sustainable development and povert y reduction. To this end, the n eed to increase levels of foreign 
investment will be critical, which in turn requir es creating a more competitive business climate. The WT/TPR/M/231 
Page 16  
 
  challenges Malawi faces in this regard are varied  and may be complex, but they are surmountable. 
The EU would like to share today a few comments. 
86. With regard to Malawi’s overall investment re gime, the reports prepared for this review 
correctly note that the regime is largely open. This  is correct so far as the basic legal framework is 
concerned. However, in practice, foreign investor s still face a number of barriers. According to the 
World Bank's Doing Business Project, Malawi does not perform favourably compared to most of its 
neighbours in terms of starting a business (ranking 16
th in the Sub-Saharan African group in the Ease 
of Doing Business rank). It is still difficult and time-consuming to obtain work and residency permits. Registering a business also involves a lengthy procedur e.  It is important that Malawi effectively 
tackles such impediments. We encourage it in hi s regard to take advantage of the ongoing World 
Bank Business Environment Strengthening Technical Assistance Project, which the EU is pleased to 
co-fund. In addition, the EU takes note of some in itial steps Malawi has taken in the right direction 
concerning its exchange rate regi me which still discourages trade a nd investment. However, Malawi 
needs to do more in order to move toward s a more market based exchange rate.  
87. We welcome Malawi’s recognition of the im portance of modernizing and improving its 
regulation, in particular that governing services sector s. It is our understanding that a comprehensive 
review is currently underway. We would be interest ed in hearing more about the outcomes of this 
review to date, including any follow up undertaken or planned. Does Malawi intend to also use the 
exercise to address cases where its current regulation is  not fully consistent with the obligations and 
specific commitments Malawi has undertaken in the WTO? 
88. As a small land-locked country highly dependent on trade, Malawi has a particular stake in 
regional cooperation in order to boost its attractiveness as an investment location and its trade 
competitiveness. Transit infrastructure developm ent and procedure harmonisation, and indeed 
removal of barriers to trade within the region, are ke y priorities for Malawi to actively pursue together 
with its neighbours. The EU has been strongly encouraging such efforts, supporting them on the ground through the regional approach to Economic  Partnership Agreements  and development aid. 
However, Malawi's overlapping par ticipation in different regional integration processes - notably in 
COMESA and SADC, both of which have plans to develop into customs unions - raises the question 
of efficiency and coherence of its regional strategy . Could Malawi share its appreciation of this issue 
and the prospects for future trade relations in the region? 
89. We ask this question also from the perspective of  our bilateral trade relations. The EU is the 
main market for Malawi’s exports, accounting for ab out 30% of total exports. In 2009 this amounted 
to 232 million Euros in value, while the total trade stood at 365 million Euros.   
90. Malawi has been involved in the Economic Part nership Agreement negotiations with the EU, 
as part of the Eastern and Southern Africa grouping.  Malawi has not signed nor initialled the interim 
EPA concluded in 2007, however, it continues to pa rticipate in the on-going negotiations towards the 
full agreement. 
91. As an LDC, Malawi is able to access th e EU market duty and quota-free under the 
"Everything But Arms" initiative. Nevertheless, the EU  is confident about the additional benefits of 
the proposed EPA for Malawi, not only by enhanced ma rket access in the EU, but also by facilitating 
structural reform and deeper regional integration.  
92. Moreover, the EU has backed the EPA process with  a substantial increase in aid for trade to 
build the capacity of administration, enhance infrastructure and support the growth of export 
enterprises.   WT/TPR/M/231 
 Page 17 
 
 
  93. Let me share some figures. Under the 10th European Development Fund, EU's development 
assistance for Malawi stands at 436 million Euros ov er the period 2008-2014 . In addition, Malawi 
will, together with other countries in the region, benefit from the EU support to Regional Integration 
for East and Southern Africa, totalling 645 million Eu ros for the same time period. Finally, Malawi 
has access to support of up to 10 million Euros over 2007-2010 for strengtheni ng the competitiveness 
of its sugar production.  
94. To conclude, given how much economic growth in Malawi is  and will remain export-led, 
trade related objectives have to be placed at the heart of its development strategy. The EU is 
committed to continuing to coopera te with Malawi in creating enab ling environment for investment, 
trade and sustainable economic growth.  
JAPAN 
95. I would like to begin with Malawi’s economic  policy and environment. Malawi’s economy 
has been growing steadily, with a 7. 7% of real GDP growth rate in 2009, with a lower inflation rate 
and less population living in poverty, despite the decr ease of the rate of growth in 2005 due to the 
drought.  
96. Meanwhile, Malawi’s economy seems to have two major problems for development, which 
are its vulnerability and high costs for business.  Firs tly, as the Secretariat’s report points out, since 
the economy and merchandise exports of Malawi heav ily rely on agriculture, there are structural 
vulnerabilities in Malawi’s economy, due to draught  and trade shocks. Japan shares the observation 
made by the Secretariat that the government can im prove the situation by replacing fertilizer subsidies 
with long-term measures, such as irrigation projects.  Diversification of the economy is also another 
challenge in order to overcome the vulnerabilities of Malawi’s economy. Japan believes that the 
promotion of FDI is the key for the diversification of the economy.  
97. The second problem is the high costs of conducting business in Malawi. Among them, the 
shortfall in electricity supply and the unpredicta ble and unreliable land transportation seem to hamper 
Malawi’s economic development. For example, th e Secretariat report describes that the Nacala 
railway is the lowest cost option, but transporta tion through this route is unpredictable. Malawi’s 
government is expected to make further effort in the near future to improve these basic infrastructures.  
98. As for trade and investment policies, Japan a ppreciates the progress in some areas, such as 
customs procedures and competition legislations. However, there remain key issues for further 
improvement. Among them, Japan urges Malawi to take  the necessary steps fo r the modernization and 
the effective implementation of trade related laws and the simplification of its tariffs. We appreciate 
the comment by Mr. Kumwembe on the intention to simplify its tariffs, and would like to ask Malawi 
to elaborate its plan.  
99. With respect to Aid for Trade, Japan recognizes the continuous necessity for external support 
from Members to enhance Malawi’s trade capacity. Jap an also contributed last year through “The 
Project for Replacement of South Rukuru Bridge on  M1”. Japan will continue to support Malawi’s 
efforts with international orga nizations and other members. 
100. Japan appreciates the awar d of EIF Tier 1 Grant in 2009, and expects Malawi to resume the 
task related to A Diagnostic Trade Integration Study, followed by the Tier 2 projects, and to complete 
projects under the EIF.  
101. In conclusion, Japan would like to reiterate its hope that Malawi will continue its efforts to 
promote and diversify its economy and trade thro ugh developing the necessary physical and legal 
infrastructures, in order to benefit from the multilateral trading system. WT/TPR/M/231 
Page 18  
 
  CHINA 
102. Malawi is a small, land-locked, least develope d country. Therefore, as underlined in Secretary 
Kumwenbe’s introduction, to pursue economic devel opment and alleviate poverty remains the priority 
of its trade policy reform.  China has commenced a nd is still on a similar long journey. And for that, 
we are happier than anyone else to learn that dur ing the period under review, Malawi has kept making 
progress in reforming its trade policy regime in su ch areas as customs procedures, competition policy, 
government procurement and privatization of some state-owned enterprises. As a result, contribution 
of trade to GDP increased from 67% to 83%. Since 2003, real GDP growth has averaged 6.3% per 
year, and reached 7.7% in 2009. China also wants to commend Malawi for not retreating from its 
open policy stance in response to the global financial crisis.  
103. Nevertheless, Malawi is still confronted with  some development challenges, including an 
extremely low per capita income, high prevalence of absolute poverty and a high reliance on donor 
funds. Malawi’s economy is heavil y dependent on agriculture and exports of primary commodities 
which makes it vulnerable to droughts and trade shoc ks. Therefore, China tends to agree with the 
observations of the Secretariat Report and the Di scussant that production and exports need to be 
diversified so that growth is less depende nt on external factors, such as weather. 
104. In our opinion, this is where Aid for Trade can come in. According to the Government 
Report, Malawi’s Aid for Trade needs are substan tial and focus on tackling supply side constraints 
including infrastructure bottlenecks. Aid for Trade s hould help Malawi to strengthen its trade capacity 
and achieve self-sustain ed economic growth. 
105. On the other hand, with cotton being one of its main export products, Malawi has a particular 
interest in the DDA negotiations on the eliminati on of export subsidies and trade distorting domestic 
support in this sector. On this occasion, China w ould like to reiterate its long standing position of 
supporting early harvests on issues of particular inte rest to LDCs such as cotton, duty-free-quota-free 
and LDC services waiver in the negotiations. 
106. Now let me briefly introduce the recent developm ents of our bilateral cooperation.  Trade has 
witnessed fast growth. In 2009, bilateral trade st ood at US$82 million. Although this figure represents 
a decrease of 7.9% year on year due to the financ ial crisis, Malawi managed to increase its export to 
China by 110%. It is obvious that the duty-free tr eatment provided by China has played its role, 
together with the successful marketing efforts of Malawian exporters. 
107. In recent years, China has cooperated with Mala wi on some technical assistance projects such 
as the Karonga-Chitipa road and the Parliament bu ilding. We are glad to hear from Secretary 
Kumwenbe yesterday that the Parliament buildi ng was open two weeks ago. Moreover, under the 
Forum of China-Africa Cooperation and other bila teral initiatives, more projects are envisaged 
including a secondary school in Thyolo, the In ternational Conference Center, South Malawi 
University and Lilongwe Stadium. China also feel s very much honoured to engage in agricultural 
cooperation with Malawi, targeting the single mo st important sector of Malawi’s economy. 
108. Direct investment of China in Malawi is still m odest, and this is the ar ea that needs more joint 
efforts. According to statistics of the Ministry of Commerce of Commerce, as of the end of 2009, the 
total amount of investment was only US$4 million. In June 2009, China-Afri ca Development Fund 
and two Chinese companies invested US$25 million to  establish Malawi Cotton Company in Balaka. 
This project has created 1,300 jobs  and benefited 50,000 families. 
109.
 To sum up, China wishes to continue our coope ration with Malawian partners with an open 
mind and a cooperative spirit on all the areas of trad e, Aid for Trade and investment to achieve a 
sustainable win-win result.   WT/TPR/M/231 
 Page 19 
 
 
  INDIA  
110. The Malawian economy has performed creditably w ith an average growth of 7% in the last 
five years. Malawi has had seven straight years of  growth reflect sound policies. It may come as a 
surprise to some that Malawi has improved nati onal food security by achieving self-sufficiency in 
maize production. This results from a substantial invest ment in seed and fertilizer subsidies. Malawi’s 
Annual Economic Report for 2010 repo rts it registered an increase in tourists from 742,000 tourists in 
2008 to 752,000 tourists in 2009 re presenting 1.5% increase. This is a praiseworthy development 
given the general dip in tourism due to global financial crisis.  
111. The IMF has commended Malawi one of Africa’s  poorest countries to make real strides in 
reducing chronic food insecurity and progress toward  poverty reduction and development targets. The 
World Bank has also said that social indicators have improved in Malawi. It also cites the 
improvement in food security and life expectancy fro m less than 40 years to 52.2 years. However, it is 
cautious that the country may only achieve half of  the eight Millennium Development Goals (MDGs) 
by 2015 because its development path has several ch allenges. One of the challenges it has identified is 
- “lack of reliable power as a key constraint to development in Malawi”. Secretary did mention of 
duty reduction, legal reforms, hydel power generation etc.  In response to our Question No. 2, Malawi 
has also mentioned of MCC offer to assist Mala wi to undertake comprehensive rehabilitation of 
existing hydro-power stations.  We would like to hear from Malawi its specific plans to boost power 
generation in a time bound manner to bridge th e gap. We join our discussant in urging the 
development partners of Malawi to take note of its request contained in para. 117 of report and extend 
adequate assistance to Malawi to address supply side  constraints to enable the country take full 
advantage of the market access opportunities created at the multilateral level.   
112. India and Malawi enjoy friendly and coopera tive relations built upon shared values and 
traditions. The Vice President of India visited Mala wi in January this year. During the visit a new 
Line of Credit of US$50 million to Malawi was announced in support of its development goals and 
following three important agreements were signed: i)  Protocol for Consultations between the Ministry 
of Foreign Affairs of Malawi and the Ministry of External Affairs of  India in order to further 
strengthen diplomatic re lations between the two countries;  ii) Memorandum of Understanding (MoU) 
on cooperation in the field of agriculture and allied sectors. The MoU focuses on various areas, including agriculture research; agricultural extension management; agricultural marketing, 
horticulture; animal husbandry and dairy; waters hed development; agricultural implements and 
machinery and agro-processing;  and iii) Agreemen t between National Small Industries Corporation 
of India and “One Village One Product of Malawi ” for mutual cooperation for the development of 
small enterprises in Malawi. 
113. Our existing bilateral cooperation in agricultu re, trade, investment, small and medium 
industries, culture and education holds the potential for further growth. The Government of India in 
January announced the grant of US$1 million as em ergency relief for rehabilitation following the 
series of earthquakes that caused loss of life and property in Malawi. Additionally, another grant of 
US$4 million was granted to support Malawi’s deve lopment in agriculture, health and education 
sectors.  
114. Indian exports to Malawi were US$64.59 milli on in the first nine months of 2009-10 while 
Malawi’s exports to India were US$83.78 million in th e same period.   Thus, Malawi has started to 
enjoy positive trade balance with India.  India’s e xport items include fabrics, transport equipment, 
machinery and equipment and imports from Ma lawi include pulses and other commodities.   
115. A 54 member delegation, headed by the Forei gn Minister Prof. Etta Elizabeth Banda which 
also included seven other Ministers, participated in the Sixth Conclave on India-Africa Project Partnership held in New Delhi in March, 2010.  The delegation included 20 business persons.   WT/TPR/M/231 
Page 20  
 
  116. India's Pan African E- Network project has been commissioned in Malawi. This project is 
fully funded by Government of India, aims to connect the 53 African countries with India for the 
purpose of tele-education and tele -medicine and video-conferencing among all the Heads of State in 
Africa.  
117. The Indian Technical and Economic Cooperati on (ITEC) programme in the field of human 
resource development has been providing training positions to Malawians and these have increased 
substantially in recent years. 
118. The Secretary referred to Cotton and I had led an  integrated Indian delegation in the cotton 
sector to C-4, Nigeria and Uganda last month.  We  will appreciate Malawi to forward details of its 
cotton status, scope and plans for value addition,  textile cluster formation through our Mission in 
Lusaka which has concurrent accreditation and we will consider positively for extending target 
specific assistance. 
AUSTRALIA 
119. We note and welcome the progress made by Malawi in reforming its trade policy regime 
since its review in 2002, particularly in the areas of customs procedures, the review of its competition 
policy, government procurement and privatization of some state-owned enterprises.  We also note the 
robust growth of Malawi’s GDP, averaging 6.3% per year.  Despite improved economic growth, 
however, unemployment and poverty reduction still remain precarious for Malawi.   
120. Australia is aware of the impact on Malawi’s economic performance as a result of exogenous 
factors like drought and trade shocks, and supports the government’s efforts to diversify its economic 
base into mining, services and tourism.   
121. In this respect, we note from the report th e growing importance of mining to Malawi’s 
economy with positive implications for employment growth and increased investment.  The largest 
foreign direct investment project in Malawi in  recent years has been from a subsidiary of an 
Australian mining company.  The company’s expo rts of uranium have had a positive impact on 
employment and are expected to mitigate Malawi’s  shortage of foreign exchange.  The Australian 
Government has supported the development of Mala wi’s mining industry by providing a short term 
mining fellowship in 2008 and 2010 which are focused  on building capacity to sustainably manage 
revenue flows from the extractive industries sector.  
122. We realise however that agri culture remains the backbone of Malawi’s economy and will 
continue to be a growth area for the country.  As leader of the Cairns Group, Australia remains firmly 
committed to securing reform of global agricultural markets through the Doha Round.  The Cairns 
Group will continue to espouse the importance of s ubstantial reductions in trade-distorting domestic 
support and the elimination of export subsidies. We will also continue to work for deep cuts to all 
tariffs, an expansion of tariff quota access and impr ovements in tariff quota administration so that all 
agricultural producers can take advantage of the op portunities for growth arising from increased trade 
in agriculture. 
123. Australia also provides duty free quota free access to all imports from Malawi.  I also want to 
touch on other areas of cooperation with Malawi in the area of agriculture, given its importance to the 
Malawi economy.  Malawi is one of the five fo cus countries for Australia for the $100 million Africa 
Food Security Initiative.  This is a new agricu ltural research partnership between the Australian 
Centre for International Agricultural Research  (ACIAR), the Association for Strengthening 
Agricultural Research in Eastern and Central Afri ca (ASARECA), the International Maize and Wheat 
Improvement Centre (CIMMYT) and National Agri cultural Research Institutions. The aim of the  WT/TPR/M/231 
 Page 21 
 
 
  partnership is to increase maize and legume productivity by 30% within a decade, for at least 500,000 
farmers across the five countries.  
124. As part of the Food Security Initiative, Aust ralia is also working with COMESA, at its 
request, on providing support to the recently estab lished Alliance for Commodity Trade in Eastern 
and Southern Africa (ACTESA).   The aim is to  encourage private sector initiatives which improve 
trade and market development and to support to ACTESA’s policy analysis and advocacy agenda in 
the region.  
125. We also welcome Malawi’s participation in , and commitment to, the multilateral trading 
system and Malawi’s support for the conclusion of the Doha Round.  This recognition of the 
importance of trade policy to economic developmen t is welcome and is a useful underpinning to 
Malawi’s domestic reform efforts.  Australia is committed to assisting all WTO members to 
participate effectively in the multilateral trading system.   
BRAZIL 
126. Brazil is glad that Malawi has improved its ec onomic performance during the review period.  
Its 6.3% annual average GDP expansion since 2003 represents solid growth by any standard.  In 
addition, prudent macroeconomic polic ies have curbed inflation, keeping it at single digits since 2003.  
These are encouraging signs that Malawi’s developm ent strategy points to the right direction. 
127. However, despite impressive recent gains (ext reme poverty has declined from 54% of the 
population in 1998 to 40% in 2009), per capita income  remains at very low levels.  Long-term 
consistent efforts are required to successfully tackle poverty. 
128. Severe vulnerability to exogenous factors – such  as weather and commodity price fluctuations 
– is a significant handicap for Malawi’s future de velopment.  This vulnerability is compounded by 
modest progress in infrastructure improvement and by lack of trade diversification.  These are hard obstacles to overcome in normal circumstances a nd even more so for a landlocked and least 
developed country.  Nevertheless, the Government and the Secretariat reports highlight heartening 
developments that will contribute to improve Malawi ’s prospects of sustaining its recent economic 
growth, as well as reducing extreme poverty. 
129. For instance, Malawi’s economic policies contri buted positively to the country’s efforts to 
overcome both the food-related inflationary surge in  2006 and the subsequent decline in commodities’ 
prices caused by the global economic crisis.  Likewise, even in these financially troubled times, inward foreign direct investment has reached record  levels in Malawi, increasing trade diversification 
and growth potential. 
130. Brazil hopes that the recent progress achieved by the people and the Government of Malawi is 
only the beginning of a much needed virtuous cy cle, which will push the country towards greater 
prosperity in the coming years. 
131. We also hope that our bilateral relationship increasingly become one positive element in this 
process.  Our trade has intensified in recent years,  with an impressive acceleration in two-way flows 
in 2009.  In addition, technical cooperation on areas such as biofuels, education, health and 
environmental policy provide a great opportunity to foster our partnership. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
132. This review gives us a valuable opportunity to take a closer look at economic and trade 
developments in Malawi over the last eight years.  Malawi’s average annual growth in real GDP of WT/TPR/M/231 
Page 22  
 
  6.3% over the period is certainly admirable, and GD P growth of 7.7% in 2009 in the midst of the 
severe global economic crisis was a particularly impressive achievement.   
133. In reading the reports, the road to self-susta ining economic development remains challenging, 
and previous speakers have already mentioned the obstacles likely to be encountered along the way. 
Based on our own experience, I feel that it is worth highlighting the importance of development 
strategy and the will to incorporate external res ources into the developmen t. To our understanding, 
Malawi has one of the most competent administra tive capacities in the region, and the political and 
social stability is enduring and highly predicab le. All these should be precious assets for trade and 
economic development of the country. 
134. A general observation we would like to contribu te is that the government policy target in 
seeking external assistance should note the balanc e between public and private resources in the 
international society. While international public sectors are important targets of cooperation, the 
international private sectors should also be on the ra dar screen and pursued with greater efforts.   
135. The Government of Malawi has produced a “Development Assistance Strategy” (DAS) to 
improve the effectiveness of aid inflows. A National Export Strategy (NES) for the next five years is 
also in the process of being constructed.  We sincer ely hope that all these strategic plans will help to 
build and boost Malawi’s long-term, self-s ustaining economic development.      
TURKEY 
136. Our bilateral relations with Malawi are devel oping gradually. We have a bilateral trade and 
economic cooperation agreement signe d with Malawi in 2006. Our trad e turnover is modest, with our 
tobacco imports totalling around US$30 million as of 2009.  
137. It is clear that Malawi has recorded an impressive economic performance with the GDP 
growing more than 6% since 2003. In this respect, we would like to underscore the various trade and 
economic reforms undertaken by the Government of Malawi in various fields like customs 
procedures, competition policy as well as the privatiza tion and the liberalization of the telecom sector 
since its last review in 2002. However, Malawi is still confronted with challenges of development and 
poverty reduction. We believe that Malawi can in crease its economic growth potential by further 
increasing the predictability of its investment and tr ade environment. We are very pleased to hear a 
much broader desire from the delegation of Malawi to  maintain the reform process as also pointed out 
at the Government’s Report.  
138. We consider that further integration with th e COMESA and SADC may also be helpful in 
enhancing the economic growth potential. We also ag ree with the observation of the Secretariat that 
trade facilitation may become pivotal for Malawi to  reduce the costs of trading across the borders, and 
help the economic growth. In this respect, we are re ady to provide technical assistance to Malawi for 
improving the trade infrastructure.  
139. We share the Malawi’s concern with regard to  trade distorting domestic support policies in 
agriculture, and we also hope that Doha Round will help eliminate such policies.  
KENYA 
140. Both Malawi and Kenya have a long standing warm  and cordial trade relations dating back to 
early 1960s at bilateral level and as from early  1980s, at regional level under the COMESA trade 
arrangement. We value this relationship and it has al ways been our desire to see it grow to even a 
much higher level.  WT/TPR/M/231 
 Page 23 
 
 
  141. Against this background, we have keenly read the trade policy review reports prepared by the 
WTO Secretariat and accordi ngly wishes to make the following comments:  on economic 
performance - we have noted the high growth rate  of about 6.3% to the GDP annually since 2003 
reaching 7.7% in 2009 led mainly by the agricultu re sector. Trade in goods and services sectors have 
also improved significantly contributing 67% and 83%  to GDP respectively. This is commendable 
performance and the momentum of the reforms should be  sustained to enable the economy to continue 
to continue growing at this high rate. Noted al so is the heavy reliance on donor funds for budget 
expenditure reaching as high as 40% to GDP. Agains t this background, it would be prudent if 
necessary homegrown auster ity measures could be initiated aimed at reducing this high dependency 
on donor funding.  
142. Commendable reforms are also noticeable in the area of trade facilitation whereby the 
Government of Malawi using UNCTAD’s Automa ted System for Customs Data (ASYCUDA) has 
started to modernize customs procedures and pos t clearance audits. This positive development should 
be extended to cover the other large proportion of im port shipments that are still subjected to physical 
inspection at the border.  Similarly, the competition legislation is being formulated in view of a series 
of mergers and acquisitions cases that are on the increase and efforts are made to realign it to that of 
COMESA. This reform is most welcome as it would en sure that there is fair play both at nation and 
regional level.  
143. As relates to the General Agreement on Trade in Services (GATS), Malawi has already made 
specific commitments in 33 service sectors and this is considered to be slightly more than the average 
prevailing in most least developed countries. Th is is obviously a brave commitment and it further 
demonstrates the extent to which the country h as embraced the multilateral trading system and its 
rules.  We would like to congratulate them accordingly.  
144. In conclusion, we commend Malawi for the br oad based market oriented trade policies and 
economic reforms they have undert aken and encourage them to sustain the momentum for even a 
much better economic performance.  
MOZAMBIQUE 
145. We congratulate Malawi for the progress made in  reforming its trade policy regime since the 
last Trade Policy Review, in 2002, in spite of Ma lawi being a land-locked country with consequent 
high transport costs. 
146. The annual growth rate averaging 7.5% of  the GDP, from 2006 to 2009, means a strong 
engagement of the Malawi’s commitment on undertak en development economic policies, especially 
for those which are driven to the poverty alleviation. 
147. We welcome to Malawi’s initiatives on implem enting tariff reduction commitments under the 
Southern African Development Community (SADC) Protocol on Trade. 
148. On the bilateral cooperation, we have trade ag reement with Malawi to facilitate more and 
improve business environment. In reality, we have  no barbed wire at the common border with our 
friends of Malawi. There is separation land-line and somewhere the border is a simple road, one side 
is Malawi and other side is Mozambique; people moves and goods flows from one to the other side 
without barriers. That is the real trade facilitati on without any “one stop border posts” that contribute 
to reduce costs related with trading across borders and other administrative costs. 
149. That is the case of the distance from Biriwiri  to Dedza, around 50 kilometers, where the 
border is a road; and the other case in Milange (Mula nge in your side) where there is a huge flow of 
trade maize and other commodities. Is there any ot her similar example around the world? I think no. WT/TPR/M/231 
Page 24  
 
  150. We hope that Malawi will achieve its long term objectives for development and to move to its 
Vision on mainstreaming of trade in the successor st rategy to the Malawi Growth and Development 
Strategy (MGDS). We believe that the MGDS will contribute to the Millennium Development Goals (MDGs). 
151. Finally, we appreciate positively the Ma lawi’s commitment and efforts on economic 
development through trade and we encourage procee ding in reforming its trade policy regimes. The 
continued improvement of its economic trade polic ies will too benefit the economic growth intra 
SADC and other countries. 
ZAMBIA 
152. Zambia and Malawi are neighbouring countries a nd there is no doubt that Malawi’s growth 
through trade, is an important anchor for growth  and development for Zambia.  My delegation is 
please to note that, as highlighted in the two commendable and comprehensive reports by the 
Government of the Republic of Malawi and the WT O Secretariat, Malawi has remained on track in 
implementing economic reforms, wh ich have contributed to economic stability and positive growth 
trends prior to the on-set of the financial crisis. 
153. Malawi is among countries that have had impr essive growth rates exceeding the 7% MDG 
target before the after effects of the financ ial crisis.  Merchandise exports increased to US$879 
million in 2009 from US$502 million in 2003, whilst FDI has risen from US$378 million to US$627 million in the years under review.  Despite the negativ e effects of the crisis, Malawi has remained on 
its path of reform including in the areas of cu stoms procedures, competition policy, government 
procurement, and privatization.  The reforms have  scored important positive strides in her economic 
and trade performance since her last review. 
154. My delegation therefore wishes to commend th e Government of Malawi for the efforts 
undertaken in addressing some of the issues that  impinge on the growth prospects. As a least 
developed country, Malawi faces several challenges th at have constrained her effective integration 
into the multilateral trading system. Notable among th em include the high cost of transporting goods 
to sea ports, and other supp ly related constraints. 
155. In an effort to address these constraints, Malawi  has joined other countries within the region 
through the North-South Corridor aid for trade Initia tive, to address in a coherent and integrated 
manner, infrastructural deficiencies and other bo ttlenecks faced along the corridor relating to border 
infrastructure and customs procedures and processes.  
156. To this end, my delegation wish to join other delegations in cal ling upon our cooperating 
partners to complement the efforts undertaken by  the Government of Mala wi.  We believe that 
support towards the effective implementation of th e North South Corridor initiative has the potential 
of increasing Malawi’s competitiveness, and ultimately contribute to enhanced trade and development. 
157. Having a solution to both the trade and development aspects of Cotton will assist a country 
like Malawi to lift millions of farmers dependent on cotton out of poverty.  My delegation, therefore, 
wishes to state that, an expeditious and am bitious outcome on negotiations under the Doha 
Development Agenda will further enha nce growth prospects for Malawi.  It is for this reason that the 
delayed conclusion of these negotiations remains a matter of concern to us.  WT/TPR/M/231 
 Page 25 
 
 
  ZIMBABWE 
158. Zimbabwe has excellent bilateral social and ec onomic relations and deep-rooted historical ties 
with Malawi.  Economic coopera tion between our two countries transcends a number of areas, 
including trade, where we constantly interact at bot h the bilateral and regional levels.   We have, in 
addition, a common handicap, namely land-lock edness which carries with it the challenges of 
inadequate infrastructure and financial res ources to facilitate trade and development. 
159. We commend Malawi for the impressive m acroeconomic performance which has seen the 
country achieve a high growth rate averaging 7.5%  for the period 2006-09.  The pro-poor and pro-
growth spending strategies adopted since 2005, together  with favourable rainfall, have resulted in high 
agricultural sector growth which has driven the Ma lawian economy to greater heights and, in the 
process, promoting rural incomes, livelihoods and food security which are important social and 
economic goals. 
160. The Secretariat’s report highlights the need fo r diversification of Malawi’s production and 
exports  so that growth is less de pendent on exogenous factors  such as the weather.   We note, with 
appreciation, the opening of the country’s first uran ium mine at Kayelekera, an encouraging sign for 
the FDI policies put in place by the Government of Malawi.   We support the Secretariat’s 
recommendation for Malawi to simplify its tariff struct ure in order to reap the benefits of reduced 
administrative costs and promote economic  efficiency in the first instance. 
161. We note that the commendable economic and soci al progress made by Malawi needs to be 
sustained through strong macroeconomic manage ment accompanied by both private and public 
investment in infrastructure, and real productive sectors that improve  productivity and address supply 
side constraints, particularly  in the identified areas of energy supply, and cross border transport and 
trade facilitation.  In this regard, we recognize th at Aid for Trade can play a crucial role in the 
economic development of the Malawian economy a nd urge for increased support and assistance from 
the international community, to enable the count ry to take full advantage of market access 
opportunities that abound at both th e regional and multilateral levels. 
NIGERIA 
162. Nigeria is pleased to note that since the last Trade Policy Review in 2002, Malawi has made 
progress in reforming its trade policy regime in th e areas of customs procedures, competition policy, 
government procurement and privatisation of some state-owned enterprises.  As pointed out in the 
Secretariat Report, while the Government recogni ses the need for further reforms of the business 
environment to attract investment, however, many of Malawi’s trade-relate d laws are outdated and 
require revision to align them with  the international best practices.  Nigeria would like to know what 
efforts the Government of Malawi is making to align the laws to international best practices. 
163. As indicated in the Secretariat Report, Malawi ’s economy is heavily dependent on agriculture 
and exports of primary commodities.  Trade in goods services rose from 67% of GDP in 2003 to 83% 
of GDP in 2009, reflecting increased reliance on trade.   We are delighted to note that Malawi has not 
retreated from its open policy stance in response to the recent global economic crisis.  We commend 
Malawi for its open policy stance, which has ensured transparent trade regime. 
164. The prevalence of preferential rates adds to the complexity of Malawi’s tariff.  Malawi is a 
member of the Common Market for Eastern a nd Southern Africa (COMESA) and the Southern 
African Development Community (SADC), which have di fferent speeds in terms of tariff elimination.  
Imports from South Africa, Malawi’s main tradi ng partner are governed by a separate schedule of 
tariff elimination.  Nigeria would like to hear what  efforts Malawi is making to simply the tariff 
regime. WT/TPR/M/231 
Page 26  
 
  165. We have noted that Malawi’s financial system is stable and has weathered the turmoil in the 
international financial markets.  Malawi is in th e process of modernizing its legislation for financial 
services and consolidating supervisory powers under the Reserve Bank of Malawi.  However, it is 
observed that the vast majority of the popula tion does not have access to commercial banking 
services.  It would be interesting to know how th e Government of Malawi intends to make access 
easily to its population the services of commercial banks. 
166. We have also noted that a lot of difficulti es in implementing the WTO Agreements, identified 
during the last review, are still valid today.  Th e difficulties are attributed to weak institutional 
capacity of the various agencies in the country.  To that end, Nigeria would like to appeal to major trading partners to assist Malawi overcome the difficulties in implementing the WTO agreements. 
167. As an important WTO Member, Malawi has play ed an active role in the Doha Development 
Agenda negotiations.  My delegati on looks forward to further colla boration with the delegation of 
Malawi in the negotiations. 
HONDURAS  
168. Malawi has shown strong economic results si nce 2005, especially unde r the successfully 
completed Poverty Reduction and Growth Facility (PRGF) Arrangement and the Exogenous Shocks 
Facility (ESF) Program. 
169. We are pleased to note, in the Secretariat Report, that trade reforms have moved ahead, 
especially in regard to customs procedures, co mpetition policy, government procurement and the 
privatization of State-owned enterprises. 
170. We also note that agriculture and commodity  exports are the chief sources of economic 
growth, in addition to the fact that agriculture  provides 80 per cent of all sources of employment, 
which is why this sector will continue to be of v ital importance to the country and to subsistence in 
the rural sector.  We therefore encourage Malawi to continue to pay special attention to this sector. 
171. The energy sector is a significant challenge fo r Malawi, because its principal source of energy 
is forestry.  A policy geared towards creating altern ative, clean sources of energy would help Malawi 
reduce the pressure on its forestry sector, and coul d diminish household costs and improve supply in 
areas such as the manufacturing sector.  Goods trans port also represents a challenge because Malawi, 
being a landlocked country, transpor ts its imports and exports by land.  It might accordingly seek to 
ensure that goods transport costs are not so hi gh as to jeopardize the competitiveness of its export 
products.  Ongoing project development is theref ore essential if the country is to meet these 
challenges. 
172. As a least developed country, in the WTO Malawi  is in favour of an ambitious outcome in the 
DDA negotiations, with the elimination of trade-di storting domestic support and export subsidies in 
the cotton sector, and a focus on special and differe ntial treatment.  We trust that Malawi will 
continue to work in the context of the Doha Round in order to achieve its objectives. 
In Malawi, technical assistance is of critical impor tance, as is capacity building under the Enhanced 
Integrated Framework and in Aid for Trade, and we encourage donors to continue to support those 
activities. 
ANGOLA 
173. The Republic of Malawi, which is a landlocke d least developed country, has achieved very 
encouraging results since 2003.  The country's growth rate rose from 6.3 per cent per year to 7.7 per  WT/TPR/M/231 
 Page 27 
 
 
  cent in 2009.  Over the same period, the proportion of the population living on one dollar a day 
dropped significantly from 54 per cent in 1998 to 40 per cent in 2007. 
174. Although these are heartening figures for which we congratulate the Government of Malawi, 
the reports submitted also show that Malawi rema ins vulnerable on account of the structure of its 
economy and the climatic hazards that periodically affect the country. 
175. Malawi has invested considerable efforts in a number of sectors and especially in agriculture, 
which has enabled it to recover food security.  We welcome this as an exemplary achievement in the 
region. 
176. To ensure the sustainability of such deve lopment and enable Malawi and other least 
developed countries to continue implementing this policy and take an active part in international 
trade, the elimination of all distorting s ubsidies is clearly of overriding importance. WT/TPR/M/231 
Page 28  
 
  V. REPLIES BY THE REPRESENTATIVE OF MALAWI AND ADDITIONAL 
COMMENTS 
177. Before I endeavour to address the pertinent issues  that were raised both in the advance written 
questions and during the first review session on Wednesday, I would like to acknowledge the support 
that has been pledged by most Members that took the floor on Wednesday and for commending 
Malawi on its efforts towards reforming its trad e policy regime including integrating into the 
multilateral trading system as follows. 
178. The Governments of the People’s Republic of China for concluding a technical and economic 
cooperation agreement on trade and investment with  Malawi and other infrastructural development 
programmes;  Australia for the support in the area of mining, agriculture and food security initiative; 
the EU  for the EBA, the 10
th EDF, the BESTAP by World Bank which the EU co-funds; the USA for 
the Millennium Challenge Account, Feed the Futu re, AGOA, GSP as well as assistance provided to 
Malawi through the Southern African Global Comp etitiveness Hub based in Botswana; India for the 
duty free quota free initiative for LDCs, as well as fo r providing Malawi with a new line of credit 
amounting to US$50 million; Turkey for their intende d support in strengthening trade infrastructure; 
Brazil for their interest in promoting and supporting cooperation in the energy sector particularly on 
bio fuels, education, health and environmenta l policy; the Governments of the Chinese Taipei, 
Honduras, Japan, Kenya, Mozambique, Nigeria, Zambia and Zimbabwe for their support and 
encouragement.  
179. Turning to the issue of foreign exchange as raised by some Memb ers, I would like to inform, 
Members, that the Malawi Government has undert aken several policy measures towards addressing 
the problem including among others the following:   Malawi has been m oving towards a market 
determined exchange rate since last quarter of 2 009 in line with the IMF recently approved extended 
credit facility and this adjustment will continue over  the next few years;  export promotion to improve 
quality, quantity and value addition of both traditio nal and non traditional prod ucts which will attract 
more foreign reserves to Malawi; and the promotion of services and mining industries that will further 
boost foreign reserves. 
180. With respect to business and investment framewo rk Malawi has accomplished the following:  
the establishment of a commercial court to reduce de lays in resolving commercial disputes, phasing 
out of pre-shipment inspection on imports, simplifi cation of the tax policy and administration through 
the use of risk-based approaches in targeting taxpaye rs and use of post-clearance audits, reduction in 
Government domestic borrowing thereby freeing up investible funds for the private sector and 
establishment of the Malawi Energy and Regulatory Authority (MERA) as well as the Competition 
and Fair Trading Competition Commission, among others.   
181. Malawi also seeks to establish a one-stop-shop investment and trade centre through BESTAP 
in order to allow the efficient pr ocessing of several licenses and procedures at one location. This will 
lead to reduced the number of licenses required for operating a business as well as progressive 
reduction in business registration time towards one da y. These reforms are aimed at reducing the cost 
of doing business. 
182. In addition, Malawi is reviewing all trade re lated laws including those pertaining to services 
to make them WTO compatible.  A consultant has been engaged towards this process by BESTAP 
and Trade-COM and the review pro cess is still ongoing.  I also wish to appreciate and commend  the 
role that our cooperating partners are playing in assi sting Malawi’s efforts aimed at reducing the cost 
of doing business. 
183. Moving on to  export diversification, I wish to inform Members that, efforts are being 
undertaken to enhance production, improve quality a nd value addition of products that have potential  WT/TPR/M/231 
 Page 29 
 
 
  for export such as paprika, textiles, plastics, c onfectionary products, wheat  flour, minerals (e.g. 
uranium mining), timber products and hides and sk ins. The Green Belt Initiative will also create a 
“green zone” along the Lake Malawi and the major rivers. Better irrigation will enable Malawian 
farmers to harvest throughout the year, increasi ng production and providing an opportunity for export 
diversification.  Donors are therefore, invited to invest in this initiative including the private sector. 
184. I would also like to take this opportunity to extend my appreciation to the various preferential 
arrangements provided for Malawi's  exports in various markets wh ich are essential for the successful 
implementation of Malawi’s export diversification initiatives.  However, market access alone is not 
enough. It should be complimente d with support measures to address supply side constraints. 
185. On the regional front, I wish to inform the mee ting that Malawi has been and will continue to 
participate actively in the regional integration ag enda programmes of the Common Market for Eastern 
and Southern Africa (COMESA) and the Southern African Development Community (SADC). Since October 2000, Malawi has been one of the 11 countries participating in the COMESA free trade area and is also implementing tariff reductio ns under the SADC protocol on trade. 
186. However, to deal with the complexities of dua l membership, Malawi is participating in the 
tripartite process of harmonizi ng programmes among the three re gional groupings of COMESA, 
SADC and the East African Community (EAC). Th e proposed launch of an expanded FTA among the 
three RECS, which will take place in 2012, will among other things help to resolve the uncertainties 
and fears expressed by some members over Malawi's participation in SADC and COMESA that are at different stages of integration. 
187. Commenting on  the tariff structure, duty and tax concessions,  Members may wish to note that  
the Malawi Government has been taking progressive  steps towards addressing the inconsistencies in 
Malawi's tariff tax structure. In 2006, section 38 of the Public Finance Management Act (PFMA) was 
amended to remove discretionary powers to grant wa ivers by the Minister of Finance. In 2008, the 
Government introduced a new system through the cu stoms procedure codes (C PCs) where incentives 
are automatic as long as investors meet prescribed conditions.  In May 2010/2011 Budget, 
Government has removed and amended some of th e CPCs in order to address new challenges that 
came with the new system of incentives and as pa rt of sun set clauses. In the same 2010/2011 Budget, 
the Government has also rationalized the MFN tari ff structure on raw materials and capital goods with 
the COMESA Customs Common External Tariff (CET) . Furthermore some intermediate goods and 
finished products have had their rates revised to 10% and 25% respectively. These measures, have 
removed tariff structure inconsis tencies and complexities as pointed out by Members. Over time, the 
Malawi national tariff structure will be streamli ned to a three band structure in line with 
COMESA/SADC (CET). As these measures will have budgetary impli cations, the Malawi 
Government will approach some donor s for financial budgetary support. 
188. Malawi acknowledges the challenge that electr icity shortages pose to development of the 
economy. In attempt to bridge the gap in power s hortfalls, the Government has embarked on a policy 
mix that encompasses both local and internatio nal initiatives. On the international front, the 
Government has identified potential donors towards funding the development of Kapichira phase two, 
which has a potential power generation of 64 Mega watts. In addition, the Millennium Challenge 
Corporation (MCC) has offered to assist Malawi  to undertake a comprehensive rehabilitation of 
existing hydro-power stations. At the regional level, plans are at an advanced stage to connect to the 
Southern African Power Pool (SAPP) Grid. 
189. Locally, the Government seeks to improve the capacity of power supply by Electricity Supply 
Commission (ESCOM) through electricity tariff re visions. In December 2009, the ESCOM revised 
the tariff charges upwards by 30% and the process will continue over the next two years. This WT/TPR/M/231 
Page 30  
 
  exercise will enable ESCOM to recover costs and accu mulate supplementary resources so as to be in a 
better position to provide sufficient and reliable electricity.  
190. As a landlocked country, transport costs in Mala wi constitute almost 60% of the cost of both 
imports and exports. In this rega rd, Malawi is calling for further financial assistance towards the 
rehabilitation of the Nacala Development Corridor, the Sena link, the cons truction of the Shire-
Zambezi Water Way, the Nsanje World Inland Project and the railway lines that connect Malawi to its 
neighbouring countries. In addition,  Malawi reiterates that the North South Corridor initiative should 
extensively address these regional infrastructural projects. 
191. I would also like to bring to your attention, th e fact that financial services to the rural masses 
are progressively being introduced in addition to th e existing micro-finance institutions. At present, 
two commercial banks provide reta il banking while mobile phone companies have also embarked on 
mobile money transfer services to rural areas. 
192. Cognizant of the dynamic nature of global tr ade imperatives, Malawi has been updating its 
policies including the MGDS, which will expire in 2 011. The Government is currently working on a 
successor strategy. In the revision, 17 sector worki ng groups or thematic groups  have been identified 
including one on Industry and Trade which hitherto  had not been the case. This will present an 
opportunity to  mainstream trade directly into the various  sectoral strategies. The current Enhanced 
Integrated Framework (EIF) provides a framework fo r continuing the mainstreaming of trade. Due 
consideration will be given to im plementation of the revised Diagnostic Trade and Integrated Study 
(DTIS) developed under the Enhan ced Integrated Framework (EIF). 
193. Let me conclude by acknowledging the financia l and technical assistance provided by all our 
development and cooperating partners and agencies particularly in the areas of capacity building, 
technology, education, infrastructure development,  health as well as poverty alleviation strategies. 
194. It is important to note the tremendous efforts th at the Government of Malawi is undertaking in 
fulfilling its obligations under the WTO Agreements despite resource constraints facing Malawi as an 
LDC.  It recognizes, however, that the adoption an d adjustment of legislation and regulation for a 
better implementation of some of the WTO Agreemen ts have been taking place at a slower pace than 
we would have liked. The required notifications of its trade policies have been outstanding for some 
time.  This situation is attributable, to a large extent, to lack of adequate institutional capacity, 
technical infrastructure, financial resources and human capital.  This reinforces the need for technical 
assistance and capacity building to LDCs like Malawi. 
195. I think that one of the areas that did not menti on is our request to be supported in terms of 
capacity building in SPS and standards.  I think that is a very important area if we are to integrate a 
competitively in the global economy.  
DISCUSSANT 
196. First, on macroeconomic and business environm ent I would like to commend Malawi for its 
strong economic performance over the past eight y ears. This is mainly due to the Malawian 
Government’s policies to create wealth, reduce pove rty, contain inflation and achieve sustainable 
growth. Malawi has a clear development vision: to produce and to export. This vision is anchored on 
the Malawi Growth and Development Strategy (MGDS) which contains five policy objectives: 
sustainable economic growth, social protection, so cial development, infrastructure development and 
improved governance. During the period under review, esp ecially in face of the global financial crisis, 
the above policies and strategy ha ve brought positive effects. Therefore, I encourage Malawi to 
continue on this path.  WT/TPR/M/231 
 Page 31 
 
 
  197. I am glad to learn from the Malawian delegation that its business environment has 
significantly improved by developing a coherent  legal and regulatory framework. Among other 
things, Malawi is in the process of reviewing 44 co mmercial and trade related laws under the Business 
Environment Support Technical Assistance Project (BESTAP). The Government is also carrying out institutional reforms and has developed the Nationa l Investment Policy to address obstacles to doing 
business in Malawi. Moreover, the Government has made progress in infrastructure development by 
creating a better partnership between public and priv ate sectors. I believe these efforts will further 
improve the investment climate and make Malawi mo re attractive to private and foreign investment. 
198. Second, on trade policy regime as noted by most of us, diversification of production and 
export is of vital importance for Malawi’s economy . The Government has set a clear objective to 
extend its export base from the traditional exports to more value-added products. Among others, 
cotton is identified as a sector of great export pot ential; the mining sector is also considered a new 
area which will increase Malawi’s export earnings. I hope Malawi will further tap into its growth 
potential and develop supporting strategies to  realize its diversification objective. 
199. Many Members have expressed concerns over Ma lawi’s tariff regime. In this regard, 
Secretary Kumwembe informed us that Malawi has made significant improvements in its tariff 
profile. I would like to draw Members’ attention to  Malawi’s commitment to move gradually towards 
international best practices. 
200. Malawi is committed to the multilateral trading sy stem and an early conclusion of the Doha 
Round with a fair and pro-development outcome. The Government also takes advantage of the 
regional and preferential initiatives to complement multilateral liberalization efforts. As a least 
developed country, Malawi has benefited from th e Integrated Framework and its successor the 
Enhanced Integrated Framework. With supply side constraints remaining Malawi’s major obstacle to 
integration into the multilateral trading system, I st rongly recommend that a tailored Aid for Trade be 
provided to Malawi to address its deficiency of resources and strengthen its trade capacity. 
201. Third, on sectoral policies, on agriculture, I appreciate the information provided by the 
Delegation of Malawi on its measures to increase production and maintain food security. Specifically, 
the Government has initiated the subsidy program in agriculture as well as the green belt initiative 
under the MGDS. Malawi is also putting emphasis on  improving agricultural research and technology.  
I congratulate Malawi for recognizing the importance of the service sectors to sustainable economic growth.  
202. The Secretariat Report noted that Malawi’s fina ncial system is stable and has weathered the 
turmoil in the international financial markets. D espite this, Malawi keeps pushing forward significant 
reforms in the banking and insurance sectors, w ith a new Banking Act and a new Insurance Act 
enacted in 2009. Five new commercial banks were  granted licences by the Reserve Bank of Malawi. 
203. On transport, the Shire-Zambezi Waterway Project and the establishment of the Nsanje 
World-inland Free Port are great achievements , which will reduce the cost of international 
transportation by as much as 60% and thereby reduce the country’s cost of production and make its 
exports more competitive.   
204. I am particularly heartened that the Governme nt intends to establish Malawi as a principal 
eco-tourism destination in Africa. It would be inter esting to hear detailed plans from the Delegation of 
Malawi in this respect. WT/TPR/M/231 
Page 32  
 
  KOREA, REPUBLIC OF 
205. Thanks to Mr. Kumwembe’s comments, my delegation now better understands Malawi’s 
achievements over the period under review, and the pa rticular challenges which lie ahead for Malawi. 
All relevant information, including all the informa tion with regards to Malawi’s foreign investment 
regime that was circulated today prior to the meeting (for which we are very thankful) will be duly 
forwarded to capital and to Korean investors so th at they would take a serious look into working 
closely with Malawi in various endeavours. 
206. During the first day of discussions, many Members emphasized the importance of having in 
place an investment regime that is open to forei gn investors. Members emphasized the need for an 
investment regime that is not only open, but in  essence one that promotes, attracts, and facilitates 
foreign investment. In this context, we would like to encourage Malawi to look into its administrative 
support structure as well as its cu rrent foreign investment regime , and review the possibility of 
introducing measures to further streamline the ne cessary administrative process to make it more 
business friendly. In fact, this delegation is of the vi ew that this effort is even more necessary today 
than ever before. This belief stems from our observa tions with regards to the precarious nature of the 
global economic situation that we face today.  
207. It is no secret that the global economic recove ry is taking place at an uneven pace, and the 
financial markets are once again exhibiting volatility owing to different factors. In light of this 
situation, many developed countries are expected to  shift towards policies which ensure “sustainable 
public finances”, or pursue “cr edible, growth-friendly measur es being mindful of fiscal 
sustainability”. In short, as a knock-on conseque nce of this policy shift, the availability of 
international public development assistance could be  affected. This situation would suggest that 
developing countries will need to consider adju sting their development strategy, and consider 
pursuing international private sector support or in vestment, just as the esteemed representative of 
Chinese Taipei alluded to in his remark on the first day.  
208. Against this backdrop, please allow me to conclu de my remarks by briefly informing you of 
the efforts my country is undertaking in the context of the global G-20 forum, to benefit all 
developing countries, including Malawi.  As the host of the G-20 Summit in November 2010, my Government is working together with other G-20 members to ensure that “development related 
issues” are not only a part of the G-20 agenda, but that it be a central piece of the Seoul G-20 Summit.  
209. In connection to this effort, just last we ek the “Korea-World Bank High Level Conference on 
Post-Crisis Growth and Development” was held in  Busan, Korea to discuss this particular issue. 
While it is premature to elaborate on what shape th is item will develop into in the coming months, we 
expect it to develop into a concre te program of detailed action plans that will truly assist developing 
countries in their efforts to develop and moderni ze their economies. My Government will spare no 
effort in ensuring that this is indeed the case. 
210. As more information become available, my dele gation will revert to this item in the coming 
months, either in this setting or another setting such as the General Council or its subsidiary body 
such as the CTD to provide further detailed inform ation on developments rela ted to this important 
matter. 
JAPAN 
211. We took the floor to express our appreciation for Mr. Newby H. Kumwembe’s statement and 
for the detailed replies to our questions. We think th at they are valuable to understand Malawi’s trade 
and investment policies.   WT/TPR/M/231 
 Page 33 
 
 
  UNITED STATES 
212. My delegation would like to offer our sin cere thanks to Malawi for the additional 
clarifications provided today as well as for th e informative responses to our advance written 
questions.  We have one follow-up qu estion. As a Member of the WTO, Malawi is obliged to base its 
regulatory decisions on science and, as such, should avail itself of the international standards and 
scientific opinions on biotechnology plants and horm one-treated beef.  There is substantial science 
supporting the safety of both types of products and the United States therefore believes that import restrictions on these products of the type Malawi is imposing are not appropriate.  In light of this, 
what steps will Malawi take so that it can lift its ban?” 
EUROPEAN UNION 
213. As did a number of Members during the first day of  this review, the EU would like to reiterate 
the importance of transparency in trade policy. We  would like to call on Malawi to take the necessary 
steps to ensure regular and timely notifications  as required under the WTO Agreements. In this 
context, we have noted that Malawi is not  frequently using the procedures of the WTO SPS 
Committee to notify its new legislation and emerge ncy and other SPS measures. Therefore we would 
like to submit a few additional ques tions in this regard in order to receive more information on 
sanitary and phytosanitary requirements in Malawi.  
214. Also, we have one follow-up question concer ning the export-processing zones – the EU 
would appreciate if Malawi could clarify whethe r the 15% corporate income tax applies only to 
companies operating in Export-procession Zones.  We are submitting these questions in writing through the WTO Secretariat and will wait for the replies by Malawi in due course.  
MALI 
215. My delegation welcomes the opportunity to be here today for the conclusion of the Trade 
Policy Review of Malawi.  We would have liked to be here the first day but  unfortunately we were 
unable to participate, and I would therefore lik e to seize this opportunity to present apologies on 
behalf of my Ambassador. 
216. I would like to say that Mali will be subject to the same Review in September, and this 
session is therefore highly important for my country.  Malawi’s experience was of great interest to Mali.  The results shown are extremely positive as we have been able to see, and we welcome 
everything that has been done.  We would like to th ank the delegation of Malawi again, and I would 
like to mention that it is one of the very few c ountries among the LDCs, to have solved the issue of 
the deficit of food supplies, and I can only hope that other LDCs and developing countries would do 
the same.  Once again we congratulate Malawi and we remain at your disposal to move forward 
together on the various issues. WT/TPR/M/231 
Page 34  
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
217. This second TPR of Malawi has allowed us to take stock of Malawi's trade policies and 
economic reforms since 2002 and its priorities for the future.  I would like to thank Permanent 
Secretary Kumwembe and his delegation for the hard work that went into the preparation of this 
Review and the timely response to the questions that we re raised by Members.  I am also grateful to 
our discussant, Dr. Zhang of China, for his tho ughtful observations on Malawi's trade policy and 
development. 
218. Members commended Malawi for its impressive  economic performance in recent years.  
GDP growth has averaged nearly 6% during 2003-08  and reached 7.7% in 2009, the impact of the 
global financial crisis notwithstanding.  Othe r achievements include a significant reduction of 
Malawi's external debt; inflati on has been curbed to single-digit levels;  the proportion of the 
population living on less than a dollar a day declined from nearly 54% in 1998 to 40% in 2007;  and 
there was a steady increase of FDI until 2008.  Great efforts have been made to diversify production, 
for example through mining projects, to help broaden Malawi's narrow export base.  It was noted that 
Malawi's economic performance re mains vulnerable to exogenous factors, notably the weather and 
terms of trade shocks. 
219. Members appreciated that Malawi has remained on the path of reform and has not retreated 
from its open policy stance despite the global financial crisis.  Since its last Review, it has undertaken 
a range of reforms, including on customs proce dures, competition policy, government procurement, 
and privatization of some state-owned enterprises.   Members noted the administrative difficulties 
foreign investors occasionally had in Malawi and en couraged Malawi to further reduce the cost of 
doing business in the country.  It was also noted that  Malawi needs to continue modernizing its trade-
related legislation to align it with WTO obligations , as well as international best practices.  For my 
part, it is encouraging to hear that a comprehensiv e review of commercial and trade-related laws is 
under way and that a number of reform bills are in the pipeline. 
220. Two general trade policy issues stood out in the Review.  First, the tariff regime.  Members 
noted that Malawi's tariff is encumbered with num erous exemptions, which makes it complex.  They 
encouraged Malawi to simplify its  tariff regime to reduce administ rative costs and promote economic 
efficiency.  Members appreciated that the Malawi G overnment is committed to that goal.  Second, the 
vital role of trade facilitation was highlighted to reduce the cost of trading across borders. 
221. Members sought further clarification from Ma lawi regarding customs procedures; SPS 
requirements; a preference scheme in governme nt procurement;  the incentives regime; the 
competition framework;  intellectual property rights;  and privatization of state-owned enterprises.  
Concerns were raised regarding Malawi's record of fulfilling its WTO notification obligations, which 
are important to ensure the tran sparency of its trading regime. 
222. On agriculture, it was recognized that Malawi  has made significant progress towards 
achieving food security, while difficult policy decisi ons and development challenges remain, such as 
striking the right balance between expenditures for fe rtilizer subsidies and longer-term investments in 
agriculture.  As cotton is one of Malawi's major e xport products and appears to  have growth potential, 
Members called for a solution to the trade and development aspects of cotton within the DDA.  
Questions were also raised regarding the tobacco  industry, and the agricultural marketing system. 
223. On energy, Members sought clarification from Malawi regarding measures to address the 
chronic shortfall in electricity and plans to link up its transmission network with the regional power 
grid.  WT/TPR/M/231 
 Page 35 
 
 
  224. On services, Members commended Malawi for the broad scope of specific commitments it 
has undertaken under the GATS.  Further clarific ation was sought regarding financial services;  
telecom services; the regulation of professional servi ces, and transport services.  Malawi informed 
Members about projects to improve the transport infr astructure, including a large waterway project to 
the Indian Ocean. 
225. This Review was the first time a comprehensive chapter on aid for trade has been included in 
a Trade Policy Review.  Development assistance is  an essential source of financing for the Malawian 
economy, and in particular for the Government's budge t.  Key is further mainstreaming of trade into 
Malawi's next national development strategy and donor alignment ar ound these objectives, both 
processes with which the Enhanced Integrated Fr amework can assist.  Members’ statements on 
ongoing and future support were encouraging in this  regard.  I hope that by the time of the next 
Review we will be able to report that domestic a nd foreign investment has overtaken donor assistance 
as the main source of development finance for the c ountry.  To repeat the insightful reflection of our 
discussant, Dr. Zhang: "the main aim of aid for trade must be to support Malawi achieve self-sustained economic growth". 
226. In conclusion, I believe that the second Review has been very useful in providing us with a 
better understanding of Malawi's trad e policies and practices, and of the challenges that lie ahead. I 
thank the Malawi delegation for havi ng taken this review very seri ously and for its submission on the 
"Nine Key Priority Areas" of Malawi’s future deve lopment policy.  I hope that Malawi will reflect on 
the policy recommendations arising from this review exercise and pursue its reforms with a view to enhancing the transparency and predictability of its  trade regime.  Members could help by keeping 
their markets open for products and services of interest to Malawi. 
 
__________