1997 NATIONAL TRADE ESTIMATES REPORT -- ZIMBABWE

[USIA]

*97040202.AAF TEXT: 1997 NATIONAL TRADE ESTIMATES REPORT -- ZIMBABWE (Annual foreign trade barriers appraisal released) (560) WASHINGTON -- The 1997 National Trade Estimates Report on Foreign Trade Barriers, released March 31 by the Office of the U.S. Trade Representative, reported the following barriers to trade with Zimbabwe: (BEGIN TEXT) In 1996, the U.S. trade deficit with Zimbabwe was $42 million, a shift of $66 million from the U.S. trade surplus of $24 million in 1995. U.S. merchandise exports to Zimbabwe were $91 million, a decrease of $31 million (25.4 percent) from the level of U.S. exports to Zimbabwe in 1995. Zimbabwe was the United States' one hundred and ninth largest export market in 1996. U.S. imports from Zimbabwe were $133 million in 1996, an increase of $35 million (35.7 percent) from the level of imports in 1995. IMPORT POLICIES Zimbabwe's economy, including its tariff regime, is in transition from a highly-controlled, statist model to an open, market-based economic system. During the first phase of its structural adjustment program that ended in 1995, Zimbabwe abolished quantitative restrictions in favor of a tariff-based trading system. In early 1996, Zimbabwe undertook a comprehensive review and rationalization of its tariff policies and rates with substantial World Bank input and the cooperation of the Confederation of Zimbabwe Industries (CZI). A new tariff regime, effective March 1, 1997, will lower duties on raw materials and other inputs, thereby removing the anomaly of higher duties on raw materials than on finished products. Although the new tariff rates have not yet been made public, they are expected to range from 5 to 50 percent. Tariff rates applied to processed agricultural imports are high, ranging from 20 to 45 percent. As of early 1996, the tariff on ready-to-eat cereals was 25 percent, plus an import tax of 15 percent, and a 10 percent surcharge on production cost, insurance, and freight (c.i.f.) basis. The effect of such high tariffs has been to preclude U.S. firms from pricing specific processed agricultural goods within reach of the average consumer, thereby curtailing growth of the domestic market. High tariffs on imported tobacco products have also been reinstated. The high rates on agro-processing products reflect the power of the commercial farmer lobby in Zimbabwe. On the other hand, free access to foreign exchange, abolition of import licensing, and establishment of the Zimbabwe Investment Centre (ZIC) have greatly increased U.S. firms' access to the Zimbabwe market. Export processing zones (EPZ) and certain related tax concessions should boost foreign investment, but a trade performance requirement compels eligible companies to export at least 80 percent of output. The EPZ authority, operational since early 1996, approved 19 projects by the end of the year. LACK OF INTELLECTUAL PROPERTY PROTECTION Since independence, Zimbabwe has joined several international patent and trademark conventions. It is a member of the World Intellectual Property Organization, the Paris Convention for the Protection of Industrial Property (Stockholm Text), and the Berne Convention for the Protection of Literary and Artistic Works (Rome Text). In addition, while Zimbabwe seeks to honor intellectual property ownership and rights, some enforcement problems exist. Audio and videocassette piracy is the most widespread IPR issue in Zimbabwe, but the volumes involved are relatively small. While software bootlegging undoubtedly occurs by users, pirated software is rarely sold commercially. (END TEXT) NNNN