Domestic and Foreign Market Access

Overview: Trade Policy and Business Environment

 The Republic of Mozambique is categorized as a low income country as well as a least developed country (LDC), with approximately 80 per cent of its population living in poverty. The country was ranked 97th out of 132 countries in the World Economic Forum (WEF) Enabling Trade Index (2012) which measures institutions, policies and services to facilitate trade in countries. Over the past two decades, the country’s economy has been continuously growing rapidly with around 8 per cent annual growth rate, which is mainly sustained by natural resource exploitation. Despite its high growth rate and ongoing megaprojects, the economy of Mozambique is still agrarian based, which provides employment for 75 per cent of the population. Its GDP mainly relies on the services, agriculture, and manufacturing sectors. The obstacles impeding its development include inefficient import-export procedures, insufficient transport infrastructure and services, a poor regulatory environment, and physical security problems. In the coming years, the Mozambican government is committed to tackling these problems through diversifying its economy, combatting corruption, investing in infrastructure development and improving trade facilitation measures (Bertelsmann Stiftung 2014, WTO 2009).

Bertelsmann Stiftung, 2014, Country Report (Mozambique)
WEF, 2012, Global Enabling Trade Report
WTO, 2009, Trade Policy Review (Mozambique)

Domestic Market Access The pillar assesses the level and complexity of a country’s tariff protection as a result of its trade policy. This component includes the effective trade-weighted average tariff applied by a country, the share of goods imported duty free and the complexity of the tariff regime, measured through tariff variance, the prevalence of tariff peaks and specific tariffs, and the number of distinct tariffs. 89 4.55
Foreign Market Access The pillar assesses tariff barriers faced by a country’s exporters in destination markets. It includes the average tariffs faced by the country as well as the margin of preference in destination markets negotiated through bilateral or regional trade agreements or granted in the form of trade preferences. 14 3.94
Tariff rate (%) This indicator is calculated as a trade-weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data). An applied tariff is a customs duty that is levied on imports of merchandise goods. 86 7.68
Complexity of tariffs , index 1-7 (best) This indicator is calculated as the average of the following indicators: Tariff dispersion, Specific tariffs and Number of distinct tariffs. See description of each individual indicator for more details. Prior to averaging, values for each indicator were transformed to a 1–7 score, using the min-max method. 14 6.69
Tariffs dispersion (standard deviation) This indicator reflects differences in tariffs across product categories in a country’s tariff structure. The variance is calculated across all the tariffs on imported merchandise goods, at the 6-digit level of the Harmonized Schedule. 38 7.28
Tariffs peaks (%) This indicator is the ratio of the number of tariff lines exceeding three times the average domestic tariff (across all products) to the MFN (most-favoured nation) tariff schedule. The tariff schedule is equal to the total number of tariff lines for each country. These tariffs are revised on a yearly basis. 1 0.00
Specific tariffs (%) This indicator is the ratio of the number of Harmonized System (HS) tariff lines, with at least one specific tariff, to the total number of HS tariff lines. A specific tariff is a tariff rate charged on fixed amount per quantity (as opposed to ad valorem) 1 0.00
Number of distinct tariffs This indicator reflects the number of distinct tariff rates applied by a country to its imports across all sectors. 19 5.00
Share of duty-free imports (%) Share of trade, excluding petroleum, that is imported free of tariff duties, taking into account MFN tariffs and preferential agreements. Tariff data is from 2013 or most recent year available and imports data is from 2012 98 33.74
Tariffs faced (%) This indicator is calculated as the trade-weighted average of the applied tariff rates, including preferential rates that the rest of the world applies to each country. The weights are the trade patterns of the importing country’s reference group (2012 data). A tariff is a customs duty that is levied by the destination country on imports of merchandise goods 18 4.87
Index of margin of preference in destination markets, 0-100 (best) This indicator measures the percentage by which particular imports from one country are subject to lower tariffs than the MFN rate. It is calculated as the average of two components: 1) the trade-weighted average difference between the MFN tariff and the most advantageous preferential duty (advantage score), and 2) the ratio of the advantage score to the trade-weighted average MFN tariff level. This allows capturing both the absolute and the relative margin of preference. 25 52.52
Source : World Economic Forum, Global Enabling Trade Report 2014

Trade Policy and Market Access

 Mozambique has been a member of the WTO since 1995, and its simple average MFN applied tariff was 10.1 per cent in 2012 with higher tariff on agricultural products (13.8 per cent) and non-agricultural products (9.5 per cent). As an LDC, Mozambique is a beneficiary of transitional periods to implement a number of its commitments under various WTO agreements. At the regional level, Mozambique is a member state of the African Union (AU), the Southern African Development Community (SADC), the African Economic Community (AEC), and the New Partnership for Africa's Development (NEPAD), all of which aim at regional economic integration. Despite the establishment of the SADC Free Trade Zone in 2008, tariff barriers among its members remain and trading volume are low. Mozambique also benefits from preferential access to the European markets under the Everything but Arms (EBA) initiatives and to the U.S. markets under the African Growth and Opportunity Act (AGOA). China is also offering Special and Differential (S&D) treatment to certain products with their origin in Mozambique. Preferential trade agreements with Malawi (2005) and Zimbabwe (2004) provide for duty-free treatment on certain goods. Despite the reforming measures taken by the Mozambican government in liberalizing its trade regime and lowering its maximum tariff rates, its participation in the multilateral trading system still remains modest (WTO 2009).

WTO, 2012, Tariff Profile (Mozambique)

WTO, 2009, Trade Policy Review (Mozambique)

Standard Compliance and Other Relevant Import/Export Restrictions

 With respect to sanitary and phytosanitary (SPS) measures, Mozambique is adopting the standards defined by Codex Alimentarius Commission, the World Organization for Animal Health (OIE) and the International Plant Protection Convention (IPPC). Mozambique is in need of and therefore receiving both technical and financial assistance to enhance its product-processing capacity to meet the international standard. With regards to technical regulations and standards, the country participates in discussions on standards, quality, accreditation, and metrology held under the auspices of SADC and is a correspondent member of the International Organization for Standardization (ISO). In accordance with a national strategy on quality, the national authority has developed voluntary standards on the quality, packing, and labelling of many agricultural products. The country has reported its need of technical and financial assistance to improve its understanding of the TBT Agreement’s provisions, yet it has not benefited from any form of assistance.

United Nations Department of Economic and Social Affairs, 2012, Survey on International Support Measures specific to the Least Developed Countries related to WTO Provisions and Preferential Market Access- Mozambique

WTO, 2009, Trade Policy Review (Mozambique)