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THE BENEFITS OF TRADE AGREEMENTS – THE EXPERIENCE OF LESOTHO

THE BENEFITS OF TRADE AGREEMENTS – THE EXPERIENCE OF LESOTHO. PRESENTED: BY MINISTRY OF TRADE AND INDUSTRY SACU ROAD SHOW MASERU, 23 MARCH 2017. BACKGROUND. As a member of SACU Lesotho is party to a number of Trade Agreements e.g. SACU-EFTA, SACU-MERCOSUR, SADC-EC EPA Why?

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THE BENEFITS OF TRADE AGREEMENTS – THE EXPERIENCE OF LESOTHO

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  1. THE BENEFITS OF TRADE AGREEMENTS – THE EXPERIENCE OF LESOTHO PRESENTED: BY MINISTRY OF TRADE AND INDUSTRY SACU ROAD SHOW MASERU, 23 MARCH 2017

  2. BACKGROUND • As a member of SACU Lesotho is party to a number of Trade Agreements e.g. SACU-EFTA, SACU-MERCOSUR, SADC-EC EPA • Why? • Due to benefits that accrue from trade liberalisation • Predictability of terms and conditions of trade – binding in nature • Parties determine these terms and conditions on a win-win basis • Elimination and reduction of tariffs • Openness of markets for entrepreneurs who provide services (TiS) • Relaxed Rules of Origin • Expansion of markets • Open opportunities for product diversification • Being a small economy it is only reasonable to focus on external markets to be able to improve the standard of living for the nation

  3. Background • NSDP – Priority Sectors • Manufacturing • Agriculture • Mining • Tourism

  4. LESOTHO’S TRADE PERFORMANCE • Lesotho exports in 2015: • World = US$913,636,000 • SACU = US$ 190,521,000 • SADC = US$190,588,000 • During the same year total imports from the amounted to US$1,280,708,000 • Main export products include Diamonds, clothing and Textiles, Agricultural products • Lesotho’s current telecommunication, financial, distribution and retail services have all received a massive boost, such that services trade makes almost 60% of GDP

  5. Access to international markets

  6. CHALLENGES • Supply side constraints • Accreditation and quality assurance infrastructure • Product development and diversification • Export market intelligence • Trade data capturing • Lead Time • Value Addition

  7. INITIATIVES TO ADDRESS CHALLENGES • GoL works together with development partners, e.g. within MTI: • World Bank • African Development Bank • WTO-EIF • SADC-EU – Trade Related Facility

  8. SADC- EU Trade Related facility • Lesotho has secured assistance under the SADC- EU Trade Related Facility (TRF). The project will address the following: • Formulation of comprehensive Trade Policy • Strengthening of capacity to implement competition policy • Strengthening of capacity to implement standards and quality and supporting infrastructure • Strengthening of capacity to operate the national body

  9. world bank • Private Sector Competitiveness and Economic Diversification Project(PSCEDP) • US$13.1 million IDA credit facility to be implemented over a five year period (2014-2019); the objective is to contribute to the development of selected non-textile sectors resulting in increased private sector investment, firm growth and job creation such as horticulture and tourism • A total of 36850 fruit trees is planted over an areas of 25 hectors, farms have received a global GAP certificaiton • Hail nets have been installed and GIS suitability map for deciduous fruits has been prepared • Fruits are exported to South Africa and the rest sold locally

  10. HORTICULTURE FARMING example • Likhothola farm total area size 10.72 hectares • Fruits ripe in Jan,Feb, Mar, Oct, Nov, Dec and are sold locally and in South Africa

  11. WORLD BANK - HIGH VALUE CASH CROPS (cherries)

  12. World Bank - Apples

  13. World Bank – Packaging

  14. World Bank - Packaging

  15. African development bank • Complementary Project to the PSCDEP • 2 components addressing Private Sector Development: • Component 1 – Enhancing Economic Diversification e.g. Tourism, Product Development and Market Diversification • Component 2 – Promoting Enterprise Development e.g. Business Incubation and Growth, Expansion of Business Development Services, Microfinance

  16. eif • Enhanced Integrated Framework (EIF) to implement Agricultural Productivity and Trade Development Project • Objective is to improve production quality and supply of value added fruits and vegetables • 140 greenhouse have been distributed to small holder farmers • The project assisted with capacity building on: national capacity and knowledge on product standards and their assessment, food and safety traceability, training on GAP, packaging and managing of cold rooms, packaging and labeling, use and maintenance of Lesotho Greenhouse and horticulture collaboration suite and trade and financial literacy

  17. EIF • Development of the market centre to process for fruits and vegetables • To facilitate export of such products to regional markets • Market centre will be operated by the private sector

  18. EIF – Greenhouse Farming

  19. EIF – Greenhouse Farming

  20. EIF – Green House Farming

  21. EIF – Green House Farming

  22. Eif – market centre

  23. Eif – market centre

  24. Market Opportunities • Unilaterally Granted Market Access • Preference giving countries • United States • Canada • Australia • Japan • India • China • Chile

  25. Potential Products to be exported • Agricultural Products – Basic or Processed • Fish • Automotive Components • Electric and Electrical Products • Water • Polished Diamonds

  26. Thank You

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