WT/TPR/S/17 Trade Policy Review
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II. TRADE AND INVESTMENT REGIMES
(1) Institutional Framework
1. TheRepublic ofZambia became asovereign, independent Statein1964. Under itsConstitution
ofAugust 1991, Zambia isamulti-party democracy, following 27years asaone-party State. The
Constitution provides foranexecutive President, aNational Assembly, andaParliament, which consists
ofthePresident andtheNational Assembly. Thenextlegislative andpresidential elections aretobe
heldinOctober 1996.
2. ThePresidentofZambia,electedeveryfiveyearsbyuniversaladultsuffrage,istheconstitutional
Head ofState, theexecutive Head ofGovernment, andtheCommander-in-chief oftheDefence Forces.
ThePresident, whose tenure maynotrunbeyond twofive-year terms, isnotamember oftheNational
Assembly butitiswithin hisauthority todissolve theAssembly. Henegotiates andsigns international
agreements, ordelegates thepower todoso.Subject totheapproval oftheNational Assembly, the
President appoints, andmayrequire theresignation of,theGovernment. ThePresident appoints a
Vice-President andaCabinet fromamong members oftheNational Assembly. TheCabinet consists
ofthePresident, theVice-President andtheMinisters, except those responsible fortheadministration
ofZambia 'snineprovinces.1TheCabinet formulates thepolicy ofGovernment. ASecretary tothe
Cabinet, Head ofthePublic Service, isappointed bythePresident, subject toratification bytheNational
Assembly.
3. Legislative authority inZambia isvested inParliament. TheNational Assembly exercises this
authority byconsidering andpassing billsforassent bythePresident. TheNational Assembly consists
of150elected members, plusatmosteight members nominated bythePresident, andtheSpeaker of
theNational Assembly.2TheSpeaker iselected bythemembers oftheAssembly from among non-
members, andpresides oversittings oftheNational Assembly. TheDeputy Speaker iselected bythe
members oftheAssembly from among itsmembers. Issues before theAssembly aredecided bya
majority ofvotes ofthemembers present andvoting, provided thatthere isaquorum ofonethirdof
itsmembers; theSpeaker votes inthecaseofatie.
4. TheSupremeCourtofZambiaisZambia'sfinalCourtofAppeal.TheHighCourthasunlimited
ororiginal jurisdiction tohearanddetermine anycivilorcriminal proceedings under anyZambian
law,except forproceedings onlabour andindustrial matters inwhich theIndustrial Relations Court
hasexclusive jurisdiction. Other courts areestablished byActsofParliament; theseinclude Subordinate
Courts, withsome criminal andciviljurisdiction, andlocal courts withlimited statutory powers.3
Zambia hasnoCourt specialized incommercial matters. Suchmatters aredealtwithbySubordinate
Courts, theHigh Court andtheSupreme Court. ATariff Court wasestablished under theCustoms
andExcise Acttohearanddetermine appeals against classification ofimported andexported goods;
itspresident isabarrister orsolicitor appointed bytheJudicial Service Commissioner.4TheAttorney-
1AMinister isappointed bythePresident fortheadministration ofeach ofZambia 'snineprovinces.
2Aseparate 27-member House ofChiefs represents traditional tribal authority. TheHouse isanadvisory
body: itmaysubmit resolutions fordebate bytheAssembly andconsider matters referred toitbythePresident.
3Local courts dealmainly withcustomary laws, Europa (1995).
4TheJudicial Service Commissioner, inter alia,advises thePresident ontheappointment ofjudges ofthe
High Court.Zambia WT/TPR/S/17
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General maymake rulesfortheTariff Court. TheChief, andtheDeputy Chief Justice andother judges
areappointed bythePresident, subject toratification bytheNational Assembly.
5. Inaccordance withtheprovisions ofArticle 1ofthe1991 Constitution, anylawisvoidto
theextent towhich itisinconsistent withtheConstitution. TheConstitution, andthrough itZambian
laws, havepriority overinternational treaties, including theWTO Agreements. However, domestic
legislation isamended totheextent necessary tobring itintoconformity withobligations undertaken
byZambia inthecontext ofinternational treaties oragreements.
(2) Policy Formulation andImplementation
6. TheGovernment formulates andimplements policies andParliament enacts related legislation.5
Each Ministry formulates policies relating toitsfieldofactivities, andsubmits them bymeans of
memoranda totheMinistries concerned andtothose likely tobeaffected bytheproposed legislation;
21daysareallowed forcomments. Following this,theMinistry thatinitiates thepolicies provides
thenecessary information totheMinistry ofLegal Affairs todrafttherelated bill.6Thebillisthen
submitted forapproval totheLegislation Committee ofCabinet, andsubsequently toCabinet asawhole;
thereafter itispublished intheGovernment Gazette.7
7. Thepublished billgoesthrough thefollowing stages intheNational Assembly:
(i) firstreading -theshort titleofthebillisread;
(ii) second reading -thebillisdebated afterthesecond-reading speech bytheinitiating
Minister;
(iii) theCommittee stage -amendments, ifany,aremade tothebill;
(iv) thereport stage -theclerk oftheNational Assembly reports totheSpeaker on
developments inCommittee;8and
(v) thirdreading -theshort titleofthebillisreadandthebillpasses through theNational
Assembly.
8. Upon Presidential assent, thebillbecomes anActofParliament.9TheActusually comes into
force assoonasitispublished intheGazette, unless aspecific dateisnamed; itmaycome intoforce
retroactively ifsoprovided forintheAct. Otherwise, aStatutory Instrument mayspecify thedate
onwhich theActcomes intoeffect, provided therelevant Minister hasbeenempowered under the
Acttoissue theInstrument.
9. Parliament mayalsoconfer onanyperson orauthority, generally Ministers, thepower toissue
Statutory Instruments (SI). AnSIisanyproclamation, regulation, order ruleornotice, notbeing an
5ThisisthecasewithallActs.
6IntheMinistry ofLegal Affairs, there isaChief Parliamentary Draftsman whoisunder theauthority of
theAttorney-General; thelatter isappointed bythePresident, subject toratification bytheNational Assembly.
7Chaired bytheMinister ofLegal Affairs, theCommittee consists ofnineCabinet Ministers.
8Amendments tothebillcanalsobemade atthisstage.
9Inaccordance withArticle 78oftheConstitution, alllaws passed byParliament arecalled Acts.WT/TPR/S/17 Trade Policy Review
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ActofParliament, ofalegislative character. Every SImustbepublished intheGazette notlaterthan
28daysafteritisapproved, otherwise itisvoid.
10. International treaties, including those related totrade, aresigned bythePresident, butgenerally
havetoberatified byParliament before being incorporated intoZambian law,withamendments to
thelawasneeded. InthecaseoftheWTO Agreements, theMinistry ofCommerce, Trade andIndustry
(MCTI)submittedamemorandumofexplanationtotheotherMinistriesforcomment.Zambiaisrevising
itstrade-related legislation, including thatoncustoms valuation, anti-dumping andcountervailing
measures, intellectual property rights, preshipment inspection, andsanitary andphytosanitary measures,
tobring itintoconformity withtheWTO Agreements.
11. TheMinistry ofCommerce, Trade andIndustry (MCTI) formulates andimplements Zambia 's
trade policies. Depending onthenature ofthetrade issues concerned, theMCTI maybeassisted by
theMinistries ofLegal Affairs, Mines, Finance, Agriculture, Food andFisheries, andTourism, and
byinstitutions, suchastheBank ofZambia, theInvestment Centre, andZambia Privatization Agency.
TheZambia Revenue Authority implements tariffandcustoms regulations, including multilateral and
bilateral agreements ontariffs. Inaccordance withArticle 100oftheConstitution, notaxation can
beimposed oraltered except by,orunder anActof,Parliament. Tariff suspensions andexemptions
aregenerally granted, under Parliamentary authority, bytheMinister ofFinance (Chapter III(2)(iii)(e)
and(3)(vi)); incentives inthemining andquarrying sector aregranted bytheMinister ofMines.
12. Theprivate sector mayinfluence thelegislative process through consultations withMinistries
byvarious associations, suchastheZambia Association ofChambers ofCommerce andIndustry, the
Zambia Association ofManufacturers, theZambia Congress ofTrade Unions, theTextile Producers
ofZambia andseveral associations ofgrowers.
13. Zambiaestablishedaone-stopInvestmentCentreinJanuary1992bothtosimplifyadministrative
proceduresandtopromoteandco-ordinategovernmentpoliciesoninvestment,thusfacilitatinginvestment
intoZambia. TheCentre processes alldirect investment applications, except those forthefinancial
services andthemining andquarrying sectors. TheCentre isunder theauthority oftheInvestment
Board, setupunder the1993Investment Actandwhich, interalia,formulates investment promotion
strategies, implements investment policies andestablishes investment guidelines fortheCentre. The
Board consists ofasenior representative from eachoftheMinistries ofFinance, Commerce, Trade
andIndustry, Legal Affairs, Land, Home Affairs, Tourism, andAgriculture; italsoincludes a
representative oftheNational Environmental Council, onerepresentative eachfromtheChambers of
Commerce andIndustry, thefarmers, theNon-governmental Organization Coordinating Committee
andtheagencies promoting small-scale industries, andthree private businessmen appointed bythe
Minister ofCommerce, Trade andInvestment. TheChairman andVice-Chairman oftheBoard are
elected fromamong itsmembers. TheBoard appoints aDirector-General astheChief Executive Officer
oftheInvestment Centre.
14. Applications forinvestment certificates aremade totheDirector-General andmust be
accompanied bylicences, authorizations, orpermits from therelevant Ministry orbody responsible
forthesector inwhich theinvestment istobemade; andbyanon-refundable feeofUS$100. The
Director-General submits theapplications totheInvestment Board. Within sixweeks ofreceipt of
anapplication, theBoard issues thecertificate, provided thattheapplication andtheplanned activity
donotcontravene anylawsandregulations inforce inZambia. Thedecision oftheBoard inrespect
ofanapplication mustbecommunicated totheapplicant, inwriting, within 14daysfromtheBoard 's
decision. Intheevent ofrejection, thereasons mustbesentinwriting totheapplicant, whomayappeal
totheMinister ofFinance, andsubsequently totheHigh Court. Aninvestment certificate hasanZambia WT/TPR/S/17
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unlimited period ofvalidity, subject toitbeing utilized within twelve months from itsdateofissue.
Untiltheendof1995, feescharged forissuing certificates varied according tothesizeoftheinvestment,
equal, forexample to1percentoftheinvestment amount forinvestments uptotheequivalent of
US$100,000 andto0.5percentforinvestments between US$500,000 andUS$1 million. Since the
adoption ofthe1996Budget, inFebruary, auniform feeofUS$1,200 (inclusive oftheVAT) hasbeen
charged, regardless ofthesizeoftheinvestment.
(3) Policy Objectives
15. InZambia,tradeandinvestmentpoliciesareamongthekeycomponentsoftheongoingeconomic
reform programme, which particularly aimsatestablishing viability oftheexternal accounts inconcert
withhigher growth inastable macroeconomic environment. Since 1991, Zambia hasbeenliberalizing
tradeand,withaviewtocountering thefallintheproduction ofcopper, cobalt, zincandlead,promoting
non-traditional exports. Annual growth ofnon-traditional exports of20percentisexpected toatleast
2000. Reforms areunder waytoimprove theefficiency ofinstitutions, suchastheExport Board of
Zambia, established in1985, todevelop non-traditional exports. Market-oriented reforms, including
thederegulation ofprices andinterest rates, theelimination ofexchange controls, andtheprivatization
programmelaunchedin1992,aredesignedtoimprovetheallocationofresourcesandthecompetitiveness
ofZambian products. Theauthorities expect thatunder theimpact ofreform, Zambia 'sforeign currency
reserves willbetheequivalent offourmonths ofimports bytheyear2000, compared tounder two
months atpresent.
16. Trade andinvestment policies arepartly directed towards thedevelopment ofZambia 'scapacity
towithstand theeffects ofexogenous shocks, suchasdroughts, fluctuations ofcopper prices andthe
decline inforeign aid.Thepolicies emphasize thehorizontal diversification ofnon-traditional exports,
including gemstones andexport crops suchashorticultural products, coffee, cotton, textiles andtobacco,
inorder toreduce Zambia 'sdependence onmetals, inparticular copper. Vertical diversification is
toberealized through theintegration ofagriculture andmining intothemanufacturing sector forthe
further processing ofexport commodities. Inthisconnection, Zambia introduced avalue-added tax
in1995andhasrestructured itstariffschedule (Chapter III(2)(iii)(b) and(d)). Cascading royalty fees
arepaidbymining andmineral companies under the1995 Mines andMinerals Act(Chapter IV(3))
andtheestablishment ofexport processing andindustrial zones isunder study (Chapter III(3)(viii)).
Since 1991, Zambia hasalsoremoved almost allquantitative restrictions onimports andexports.
17. TheGovernment hopes toincrease investment bybothZambians andforeigners inproductive
capacity. Tariff andtaxincentives areprovided forthispurpose (Chapter III(2)(iii)(e), (3)(vi) and
(4)(i)). Theongoing reforms ofthefinancial services 'sector andtheabolition ofexchange controls
areaimed atfacilitating access tocredit forlong-term investment bytheprivate sector andatstimulating
investmentbyreducingfinancialcosts.Aliberalandstableeconomicenvironmentisexpectedtoimprove
investors 'confidence. Theinvestment programme ofthepublic sector focuses ontherehabilitation
ofexisting infrastructure andontheimprovement ofhuman capital through vocational education, with
aviewtoimproving efficiency oftheprivate sector, which isexpected tofillthevacuum leftbythe
disengagement oftheGovernment from economic activities. Theoperations ofpromotional bodies,
suchastheSmall Industries Development Organization (SIDO), areunder review toharness thepotential
oflabour-intensive activities forbothpercapita growth andemployment purposes (Chapter III(4)(ii)).
(4) Laws andRegulations
18. Themain legislation governing Zambia 'sforeign trade isthe1995 Customs andExcise Act
(Chapter 662oftheLaws ofZambia). TheActdeals with, interalia,theimportation andexportationWT/TPR/S/17 Trade Policy Review
Page 16
ofgoods, rules oforigin, customs valuation, tariff concessions, theTariff Court, excise tax,and
anti-dumping andcountervailing duties. ACompanies Actwaspassed in1994, interalia,toregulate
theconduct ofcompanies andshareholders 'rights; itdoesnotprescribe equity participation limits
onforeign investments.
19. The1993Investment Act,asamended in1995, setsoutconditions forinvestment inZambia,
except forbanking, insurance, andmining andquarrying which areruled bytheBanking Act,the
Insurance Act,andtheMines andMinerals Act,respectively. Theprovisions oftheInvestment Act
andtheMines andMinerals Actapply equally tolocalandforeign investments. The1995amendments
totheInvestmentActremovedspecialincentivesapplyingtonon-traditionalactivities.However,general
incentives, suchasconcessions ontheincome taxstillapply toinvestment inagriculture, non-traditional
exports andruralenterprises (Chapter III(2)(iii)(e) and(4)(i)). Provisions ofPartVIIoftheInvestment
Actprotect private investment from nationalization oranyother compulsory acquisitions.10
20. Table II.1liststhemain trade-related lawsinforce inZambia.
Table II.1
Trade related legislation inZambia
Area Legislation Date ofentry into
force
Foreign trade; customs procedures, valuation and
duties; rules oforigin; emergency measures;
excise tax;tariff concessions; andTariff CourtCustoms andExcise Actandvarious amendments 1995
Value added tax Value-Added TaxAct 1995
Countervailing duty(investigations) Statutory Instrument 54 1994
Tariff suspension onmanufacturing inputs Statutory Instrument 23 1994
Rebates, refunds andremissions ofborder charges Statutory Instrument 16 1996
Import Declaration Fee Act25
Statutory Instrument 1481995
1995
Reduction ofduties ongoods from COMESA
countriesStatutory Instrument 13 1996
Government procurement TheZambia National Tender Board Act
TheTender Regulations1982
1995
Technical standards andregulations Standards Act
Food andDrugs Act
Plants, Pests andDiseases Act1994
1978
1959
Enterprises Companies Act 1994
Intellectual Property Rights Patents Act
Statutory Instrument 54
Trademarks Act
Registered Designs Act1958
1995
1958
1958
Investment TheInvestment Act
Amendment1993
1995
Investment inmining andquarrying TheMines andMinerals Act 1995
Investment inbanking andfinancial services TheBanking andFinancial Services Act 1994
Insurance Insurance Act 1968
Investment insmall industries Small Industries Development Act 1981
Competition TheCompetition andFairTrading Act 1994
Source: Information provided bytheZambian authorities.
10Zambia isasignatory totheMultilateral Investment Guarantee Agency (MIGA) oftheWorld Bank; foreign
direct investments (FDI) arealsoprotected under some bilateral andregional agreements.Zambia WT/TPR/S/17
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(5) Agreements
21. Zambia isamember andactive participant inallmajor multilateral organizations. According
totheauthorities, Zambia values regional andbilateral co-operation, particularly withitsneighbours,
butisaware ofthelimitations ofsuchco-operation interms of:enforcement ofrules; market access -
goods produced byZambia areoften thesame asthose produced byitsneighbours; andeligibility
criteria, including therules oforigin inthecaseofnon-reciprocal preferences.11
22. Theprocedures forthesettlement oftrade disputes involving Zambia arelaiddown in
agreements,includingtheWTOAgreements,theTreatyoftheCommonMarketforEasternandSouthern
Africa (COMESA), andtheLomé Convention, towhich itisasignatory. Theregional andbilateral
tradeagreements towhich Zambia isapartyinclude provisions forconsultation, conciliation anddispute
settlement. According totheauthorities, Zambia generally favours arbitration, unless therelevant
agreement stipulates otherwise. AsatJuly1996, Zambia hasnotbeendirectly involved, either as
acomplainant orasadefendant, inanydispute settlement proceedings. WTO Members werenotified
oftheCOMESA Treaty inMay1995 (Table II.2).
Table II.2
Status ofZambia 'sselected notification requirements totheWTO, asatJune 1996
WTO
agreementDescription of
requirementPeriodicity Document No.ofmost
recent notif. (ifnone,
dateofscheduled
notification)Comments
Anti-dumping
(Art. 16.4)Anti-dumping actions
takenBiannual G/ADP//N/2/A.1/ R.1,
August 1995Duty of15percentonwindows and
doors, andwindows anddoorframes
since theearly 1970s.
Anti-dumping
(Art. 16.4)Anti-dumping actions
takenBiannual G/ADP/N/4/A.1,
September 1995Duty of15percentonwindows and
doors, andwindows anddoorframes
since theearly 1970s.
Anti-dumping
(Art. 18.5)Laws andregulations Once byMarch
1995, thenchangesG/ADP/N/1/ZMB/1,
April 1995
Safeguards
(Art. 12.6)Laws andregulations Once byMarch
1995, thenchangesG/SG/N/1/ZMB/1,
August 1995AsatAugust 1995, Zambia hadno
specific safeguard laws.
Subsidies and
countervailing
(Art. 32.6)Laws andregulations Once byMarch
1995, thenchangesG/SCM/N/1/ZMB/1,
April 1995
Textiles and
clothing
(Art. 6.1)Transitional safeguard March 1995 G/TMB/N/103,
April 1995Useoftheprovisions ofthesafeguard
mechanism (Art. 6).
GATT 1994
(Art. XXIV)Customs Union/
free-trade areaAdhoc WT/COMTD/N/3,
May1995Common Market forEastern and
Southern Africa (COMESA).
Source: WTO documents.
(i) Multilateral agreements
23. Zambia accords atleastm.f.n. tariff treatment toallitstrading partners. InFebruary 1982,
ZambiasucceededtothestatusofcontractingpartyunderGATTArticleXXVI:5(c),afterhavingapplied
theGATT onadefactobasissince itsindependence in1964. Zambia wasneither asignatory to,nor
anobserver in,anyoftheTokyo Round Agreements. Zambia isafounding member oftheWorld
11Degbelo andDembinski (1995).WT/TPR/S/17 Trade Policy Review
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Trade Organization (WTO), having ratified theMarrakesh Agreements on15April 1994. Zambia
isnotasignatory tothePlurilateral Agreements resulting from theUruguay Round.
24. DuringtheUruguayRound,Zambiaexpresseditscommitmenttothemultilateraltradingsystem
(Chapters III(2)(iii)(b) andIV(5)). Zambia isgenerally satisfied withtheresults oftheRound,
particularly thestrengthening ofrules anddiscipline, andtheincrease inmarket access forthenon-
traditional exports, including agricultural products, thatithaspromoted sincethemid-1980s. Economic
reformswerewellunderwayinZambiabeforetheconclusionoftheUruguayRound,includingunilateral
liberalization, foodsecurity strategies andgeographical andproduct diversification ofitsexports, and
these should dampen eventual erosion ofpreferential treatment thatZambia receives, including under
theLomé Convention, aswellasanypossible negative effects ofaneventual increase inworld food
prices.12
(ii) Regional agreements
(a) TheCommon Market forEastern andSouthern Africa
25. InNovember 1993, Zambia signed theTreaty oftheCommon Market forEastern andSouthern
Africa (COMESA), which replaced, inDecember 1994, thePreferential Trade AreaforEastern and
Southern African States (PTA), ofwhich Zambia wasamember.13Lusaka wastheseatofthePTA
andisnowthesiteoftheCOMESA headquarters. Under theCOMESA Treaty, allnon-tariff barriers
onimports fromfellow members mustbeeliminated onthedateofacountry 'saccession, except for
special reasons, suchasbalance-of-payments difficulties, safety, security andinfant industry protection.
Members haveadopted aschedule oftariff cutstophase outallcustoms duties andequivalent charges
onimports fromfellow members bytheyear2000, andtoestablish acommon external tariffby2004.
Forthispurpose, Zambia hasapplied a60percentreduction oftheapplicable m.f.n. tariff rateon
itsCOMESA imports sinceJanuary 1996. Emergency actions, including safeguard, anti-dumping and
countervailing measures, areallowed forlimited periods, forexample, uptooneyearforsafeguard
measures (Table II.3).
26. AtHeads ofState orGovernment level, theCOMESA Authority meets atleastonceayear
topreside overtheTreaty; itsdecisions arebyconsensus. TheCOMESA Secretariat ismandated
tofollow upandmonitor theimplementation oftheTreaty. Tothiseffect, theSecretary-General is
toprepare "acomprehensive andmeasurable implementation programme" withcleartargets specified
fortwo-year stages. Thetransition toafollowing stage isconditional onafinding bytheCouncil
ofMinister thatthetargets havebeenattained andmember States 'obligations fulfilled.
27. Under COMESA, co-operation intheareaofcustoms management istobestrengthened and
member States arecommitted tosimplifying andharmonizing trade documents andprocedures and
combatting illicit traffic. Inthisregard, Zambia hasaccess totheCOMESA Trade Information Network
(TINET) andsome facilitation programmes, suchastheRoad Customs Transit Declaration Document
andtheCOMESA Regional Customs Bond Guarantee System.
12Degbelo (1994) andDegbelo andDembinski (1995).
13COMESA has23members: Angola, Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Lesotho,
Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, Somalia, Sudan, Swaziland,
Tanzania, Uganda, Zaire, Zambia andZimbabwe.Zambia WT/TPR/S/17
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Table II.3
Main trade-related elements oftheCOMESA Treaty
Chapter Content
Co-operation inTrade Liberalization andDevelopment
(Chapter 6)Reduction andelimination oftariff andnon-tariff barriers;
establishment ofacommon external tariff andrules oforigin;
rules ondumping, subsidies, safeguard measures, andanti-
competitive practices; m.f.n. principle andnational treatment;
trade promotion
Monetary andFinancial Co-operation (Chapter 10) Clearing andpayment system (e.g. Clearing House);
harmonization ofmonetary andfiscal policies; formation ofan
exchange rateunion; freemovement ofcapital.
Common Market Customs Co-operation (Chapter 7) Customs co-operation, harmonization ofcustoms procedures
andsuppression ofillicit traffic.
Simplification andHarmonization ofTrade Documents and
Procedures (Chapter 9)Simplification andharmonization oftrade documents.
Least Developed Countries andEconomically Depressed Areas
(Chapter 22)Measures tostrengthen thecapacity oftheleast-developed
member States andeconomically depressed areas, particularly
through encouraging investment, promoting newtechnologies,
andsupporting theactivities ofchambers ofcommerce and
industry.
Development ofthePrivate Sector (Chapter 23) Strengthening oftheprivate sector; co-operation among
chambers ofcommerce.
Investment Promotion andProtection (Chapter 26) Promotion andprotection ofprivate investment; double
taxation agreement; multilateral investment agreements.
FreeMovement ofPersons, Labour, Services, Right of
Establishment andResidence (Chapter 28)Progressive liberalization ofmovement ofpersons, labour and
services within theCOMESA area.
Sanctions (Chapter 31) Enforcement ofobligations under theTreaty.
Implementation andMonitoring Arrangements (Chapter 32) Periodic monitoring oftheimplementation oftheTreaty.
Economic Community forEastern andSouthern Africa
(Chapter 34)Progressive transformation intoanEconomic Community.
Source: WTO Secretariat.
28. TheCOMESA Treaty makes provision fortheperiodic monitoring ofmember States '
performance, adispute settlement body (Court ofJustice), andsanctions. TheCOMESA Court of
Justice iscomposed ofseven Judges appointed bytheCOMESA Authority. TheCourt iscompetent
toadjudicate onallissues surrounding theinterpretation andapplication oftheTreaty, which maybe
referred toitbyamember State, theSecretary-General, andanylegalornatural person residing in
amember State.14Decisions oftheCourt, which takeprecedence overnational court rulings, arefinal
andcannot beappealed. Iftheyarenotproperly implemented, theCourt mayspecify appropriate
sanctions (Article 34).
29. Inaddition, theCOMESA Authority mayimpose sanctions onmember States thatfailtoadhere
totheirobligations under theTreaty orwhose conduct is"prejudicial totheexistence ortheattainment
oftheobjectives oftheCommon Market" (Article 171). Thesanctions mayinclude thesuspension
ofrights orprivileges under theTreaty, theimposition ofafinancial levy, aswellasthetemporary
suspension ortermination ofmembership.
14However, legal andnatural persons would firstneed toexhaust theremedies available under national
legislation.WT/TPR/S/17 Trade Policy Review
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(b) TheLomé Convention
30. ZambiaisasignatorytotheLoméConvention,atradeandaidagreementsignedbytheEuropean
Union and70countries inAfrica (allSub-Saharan African countries except South Africa), theCaribbean
andthePacific (ACP). Thecurrent, fourth, Lomé Convention (Lomé IV)wasconcluded fortenyears
starting from1990. Under theLomé Convention, non-reciprocal tradepreferences aregranted toACP
States bytheEuropean Union (EU); subject toasafeguard clause andrules oforigin, commodities
fromACPStates,exceptthosecoveredbytheCommonAgriculturalPolicy,entertheEUfreeofcustoms
duties andquantitative restrictions. Trade preferences under Lomé IVaffect some 40percentofEU
imports fromACPStates, withalargemajority oftheremaining imports entering theEUmarket either
dutyfreeonanm.f.n. basis orunder GSPrates.15TheACP States arerequired toextend m.f.n.
treatment toEUproducts (Article 174).
31. EUsupport toACP States isaccorded through, interalia,theEuropean Development Fund,
themain assistance instrument oftheEU;theEuropean Investment Bank forcommercial loans; the
Stabilization ofExport Earnings Scheme (STABEX), which currently covers 49agricultural products
andisaimed atreducing theimpact ofprice orquantity fluctuations onexport earnings; andSysmin,
which isafinancing facility forminerals, including copper, Zambia 'smajor export. In1995, Zambia
acceded totheSugar Protocol annexed totheLomé Convention, withaspecial preferential basic
allocationof12,000metrictonnesofwhitesugar.UnderLoméIV,theEUhasallocatedECU10million
tofinance anExport Development Programme inZambia (Chapter III(3)(vii)), andECU 60million
under Sysmin toassist Zambia 'seconomic recovery programme.
32. Disputes concerning theinterpretation orapplication oftheLomé Convention maybereferred
totheCouncil ofMinisters established under theConvention (Article 352). Ifnosolution isfound,
theCouncil mayinitiate anarbitration procedure withthree arbitrators.16
(c) TheSouthern African Development Community
33. Zambia isamember oftheSouthern African Development Community (SADC) which replaced
theSouthern African Development Coordination Conference (SADCC) in1992.17TheSADC aims
tophase outtradebarriers, tocreate acommon currency system, andasingle common regional market.
Aprotocol onintra-SACD trade liberalization, withtheremoval oftariff andnon-tariff barriers, is
under discussion andisplanned tobefinalized inlate1996.18Thecreation ofaregional development
bankandaregional Parliament isalsoenvisaged. Anoverlap ofmembership exists between COMESA
andSADC.
15GATT document L/7539/Corr.1, 3November 1994.
16Two ofthese areappointed bytheparties tothedispute, onebyeach side. Thetwoarbitrators arethen
required toagree onathird (Article 352). Decisions aremade bymajority vote.
17SADC has12members: Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South
Africa, Swaziland, Tanzania, Zambia andZimbabwe. Mauritius andSouth Africa joined SADC more recently,
in1995 and1994 respectively.
18Export Board ofZambia (1996).Zambia WT/TPR/S/17
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(d) Plans foranAfrican Economic Community
34. Zambia isparty tothe1963 Charter oftheOrganization ofAfrican Unity (OAU) towhich
almost allAfrican countries aresignatories. Under the1980 "Lagos PlanofAction", theOAU is
committed tothecreation ofanAfrican Economic Community (AEC). TheTreaty oftheCommunity
wassigned inJune1991 inAbuja (Nigeria). Themember countries envisage theremoval ofall
impediments totradeandthecreation ofacustoms union in2004; asingle market (theAfrican Common
Market (ACM)) in2025 andaneventual monetary unification withasingle currency by2031.19
(iii) Other agreements
35. Zambia hasbilateral tradeagreements withAngola, Mozambique, China andRomania; other
bilateral agreements areunder negotiation withSouth Africa, Namibia, Botswana andZimbabwe.
Zambia isamember oftheAfrican Development Bank. Zambia isgranted trade preferences by
developed countries, including theUnited States, Finland, Switzerland, Sweden, Norway andCanada,
under theGeneralized System ofPreferences (GSP). Zambia isneither asignatory toanydouble taxation
agreement noraparty tointernational commodity agreements. Zambia ratified theMultilateral
Investment Guarantee Agency (MIGA) Convention, andsigned bilateral agreements forreciprocal
protection ofinvestments withSwitzerland in1994 andChina in1996.
19WTO (1995); andEIU(1995).