Fourth WTO review of the trade policies and practices of Mozambique out

The WTO Secretariat has made available on the WTO website the fourth review of the trade policies and practices of Mozambique. All WTO members have their trade policy reviewed at regular intervals by the WTO Secretariat. The purpose of such reviews is to verify the adherence to the rules, disciplines and commitments made under the Multilateral Trade Agreements and, where applicable, the Plurilateral Trade Agreements of the WTO. As of 2019, the frequency of the review process is 3, 5 and 7 years, depending on a country’s share of world trade in goods and services (before 2019, review cycles were shorter, respectively of 2, 4 or 6 years depending on a country’s share of world trade). Mozambique is categorized by the United Nations as a least developed country (LDC). Despite its significant potential for steady economic expansion, underpinned by its good transport links both to regional and international markets, and its vast and diverse natural resources, the country is both highly exposed and vulnerable to weather-related hazards that tend to cause significant economic damage.

Mozambique's competitiveness is also undermined by infrastructure bottlenecks, a large informal sector, and an underdeveloped financial system, despite the recent steps taken to address these constraints. Lastly, the fragile security situation in the north of the country also affects its economic performances.

Mozambique’s balance of trade reflects the classical economic patterns of African countries, characterized by an export basket concentrated on raw materials and goods with low value addition, while imports consist mainly of finished goods. In particular, the WTO analytical report points out that during the period 2017-23, Mozambique continued to depend heavily on imported food, agricultural inputs, and refined petroleum products, whereas its exports were dominated by coal, aluminium, and natural gas. In the same period, Mozambique remained also a net importer of services.

The general assessment of the WTO is that Mozambique supports a rules-based multilateral trading system that is predictable and transparent and which contributes to inclusive and sustainable development. However, capacity to notify trade policies to the WTO still remains a challenge for the Mozambican authorities, where the country expressed the meet to receive additional technical assistance (this, despite the fact that the WTO has developed a notification portal to facilitate the compliance of its members to notification obligations).

Recently, Mozambique also started implementing the EU-SADC Economic Partnership Agreement (EPA) and a separate EPA negotiated jointly with the Southern African Customs Union and the United Kingdom. In addition, a bilateral preferential trade agreement entered into force for Indonesia in June 2022, whose implementation by Mozambique is expected to begin this year.

Mozambique also ratified on 30 December 2022 the Agreement Establishing the African Continental Free Trade Area (AfCFTA) but so far it has not yet shared its provisional tariff offer with the other AfCFTA State Parties through the AfCFTA Secretariat, even though the transmission of such offer is planned within this year. Interestingly, the document reveals that the AfCFTA agreement notification process to the WTO is still pending, as reflected by the WTO database of regional trade agreements, which does not include this Free Trade Agreement yet. Such notification is required in line with standard transparency obligations of WTO members. In fact, each time they conclude and start the ratification process of a regional trade agreement, they have to notify the agreement to the WTO. Among other things, such notification would help the WTO Secretariat to provide more targeted assistance and technical advice to the AfCFTA.

With regard to trade facilitation, Mozambique recently revised its tariff and customs clearance legislation and is continuing to develop its Electronic Single Window (JUE) for foreign trade. The authorities also eliminated the mandatory use of customs brokers (prohibited under the WTO Trade Facilitation Agreement), and discontinued pre-shipment inspection, albeit without formally revoking the legal basis for the latter. Notwithstanding such improvements, the WTO recommends to focus trade facilitation on increasing transparency and making all trade-related registration, licensing, and authorization procedures executable electronically.