The United States could ban Zimbabwean products from entering America duty-free over violation of labour rights, a measure that could hit half of Zimbabwe’s exports to the world’s biggest economy.
The office of the United States Trade Representative (USTR) said in a statement on Sunday that it has started reviewing whether to keep Zimbabwe on the list of countries on the Generalised System of Preferences (GSP) list. Under this scheme, Zimbabwe can export a wide range of products, from industrial to agricultural, duty-free.
About half of Zimbabwe’s exports to the US were through the GSP, according to US government data.
America says its review is driven by Zimbabwe’s violation of labour rights.
“Labour rights concerns in Zimbabwe relate to a lack of freedom of association, including the rights of independent trade unions to organise and bargain collectively, and government crackdown on labour activists,” the USTR said in its statement.
The US embassy in Harare added: “Zim exporters will continue to benefit from the GSP program while the review is underway. We look forward to a collaborative and productive dialogue on labour issues to help ensure Zimbabwean exports to the United States can continue to participate in the program.”
Zimbabwe has seen a series of strikes by labour unions over the past year, as inflation rose. Some of the protests led to the arrest of union leaders.
What is a GSP review?
The GSP allows access into the United States for 3,500 products from 119 designated beneficiary countries and territories.
To remain eligible, countries must comply with 15 criteria. These include workers’ rights, protection of intellectual property rights, and “equitable and reasonable access to its markets”.
Periodically, the US assesses whether countries are still in compliance. This year’s assessment covers the 54 countries in the Middle East, North Africa, and sub-Saharan Africa. US government agencies – among them the Departments of State, Labour, Treasury, Agriculture, and Homeland Security – review whether a country is complying.
“Today’s announcement demonstrates the effective use of the GSP program to improve labor standards and help U.S. businesses and workers succeed,” said US Trade Representative Robert Lighthizer.
Zimbabwe has enjoyed duty-free access to the U.S. market since 1980 under the Generalized System of Preferences (GSP) program. Due to worker rights concerns, @USTradeRep announced today it will begin a GSP eligibility review for Zim. Press Release: https://t.co/shU2B6oHjk
— U.S. Embassy Harare (@usembassyharare) November 1, 2020
Should Zimbabwe fail the review, a trade embargo would be the latest addition to a 20-year old regime of American sanctions on Zimbabwe. These measures include targeted sanctions against 83 individuals and 37 State-linked companies, under an annually reviewed Executive Order, and broader measures under the Zimbabwe Democracy and Economic Recovery Act (ZDERA).
Due to strained relations with the US, Zimbabwe is already excluded from the US’ African Growth and Opportunity Act, which grants 38 African countries easier access to the American market.
Impact on Zimbabwe
Disqualification under the GSP would impact on Zimbabwean exports. According to an entry on the US website, half of Zimbabwe’s exports to the USA were under the GSP.
In 2018, the latest data available from the US embassy, Zimbabwe exported goods worth US$75 million to the US. Zimbabwe had a positive trade deficit of US$41 million as it exported more than it imported from America.
Of these exports, Zimbabwe exported agricultural produce worth US$16 million in 2018, including tobacco and tea.
A trade embargo on Zimbabwe would affect Hippo Valley, one of the country’s biggest sugar producers. In August, Hippo reported it had more than doubled its exports in its first quarter. The company said it planned to export 18 198 tonnes to the United States, which includes a prior year reallocation of 4 672 tonnes.