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Zambia's Trading Partners?

Next issue - Zambia's Exports and Imports >>

Zambian exports can be divided into its traditional metal exports such as copper and cobalt and its non-traditional exports. As far as its traditional exports are concerned, Japan, which buys much of Zambia's copper, is its largest single export market, followed closely by the European Union (EU).

Since part of the philosophy behind the trade liberalisation in the 1990s is to attempt to reduce the dependency of the economy on copper, there has been an effort to stimulate the production and export of non-traditional exports. This area of trade has been a growth area, but, paradoxically, a temporary rise in foreign exchange earnings from a booming sector may have an adverse effect on economic development in the long-term. This is known as 'Dutch Disease' and results from copper earnings keeping the real exchange rate high. This undermines the competitiveness of other export sectors and crowds out investment and other resources diverted from other sectors that may have greater long-term growth prospects.

If we examine the non-traditional export more closely the full pattern of trade flows become apparent:

Source Export Board of Zambia 1997

Zambia's agricultural exports, mainly floricultural, are marketed largely out of the region as many neighbouring countries such as Zimbabwe produce similar items. The United Kingdom and Germany are the largest importers. One of the most important exports, textiles, finds a market mainly in the European Union and Switzerland. Within the COMESA region, The Democratic Republic of Congo is the main importer of Zambia's products, followed by Zimbabwe.

As far as imports are concerned South Africa is Zambia's major supplier, with a share in Zambia's total imports of almost 30 per cent, followed in order by the EU, Zimbabwe, Japan and the United States.

Under the rules of the WTO all of Zambia's trading partners have most favoured trading nation status (MFN). This means that they are all treated similarly in terms of trade barriers. Having said this, preferential treatment is given to fellow members of COMESA and SADC, the two different trading blocs that Zambia belongs to. Imports from COMESA partners enter Zambia at 40 per cent of the applicable mfn rate.

Next issue - Zambia's Exports and Imports >>

Related Glossary Items:
WTO
Primary Products

Related Issues:
COMESA: a case study of a trading bloc
The World Trade Organisation
Over-dependence on Copper

Related Theories:
The Benefits of Trade
The Principle of Absolute and Comparative Advantage
The Formation of Trading Blocs