Botswana - Trade Agreements Botswana - Trade Agreements
Recognizing the problems that its small domestic market ultimately poses for investors, Botswana continues to promote trade by pursuing free trade agreements with its neighbors as well as other developed and developing countries.
Southern African Customs Union (SACU)
Botswana is a member of the Southern African Customs Union (SACU) along with South Africa, Lesotho, Namibia, and eSwatini. SACU is a duty free trading area with a common external tariff. With the exception of certain foodstuffs, import permits are not required for goods entering Botswana from other SACU members. Botswana's membership in SACU allows investors to take advantage of selling duty free in the far larger South African market. The SACU Secretariat based in Namibia is responsible for implementing the SACU Agreement as well as improving economic performance of the union’s member states. U.S.-SACU Free Trade Agreement negotiations were suspended in April 2006, largely due to divergent views on the scope for the agreement. Instead of a free trade agreement, the United States and SACU negotiated a Trade, Investment, and Development Cooperation Agreement (TIDCA) that would establish a forum for consultative discussions on a wide range of trade and investment issues. A Consultative Group will oversee the implementation of the TIDCA and provide a framework for working on a range of interim-trade-related agreements, cooperative programs, and other trade development steps that would set the platform for future free trade agreement negotiations.
Southern African Development Community (SADC) Free Trade Protocol
The Southern African Development Community’s (SADC) objective is to pursue a common integration plan based on economic, political, and trade interests (members: Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, South Africa, eSwatini, Tanzania, Zambia and Zimbabwe, Angola, Democratic Republic of Congo, Seychelles and Malawi). The SADC Free Trade Area (FTA), though in place, is not yet implemented. In August 2008, Botswana was one of the twelve SADC members to sign the FTA. Angola and the Democratic Republic of Congo are yet to sign.
Under the SADC FTA, tariffs and non-tariff barriers will be eliminated on substantially all trade between the members. The implementation of the FTA started in 2000 following the signing of the SADC Trade Protocol. Through the FTA, 85% of trade in goods produced in the region will move across borders free of customs duties. Trade liberalization has taken place at different rates. The more developed member states (South Africa, Namibia, Botswana, eSwatini and Lesotho) have reduced tariffs at a faster rate.
World Trade Organization
Following its accession to the General Agreement on Tariffs and Trade (GATT), Botswana became a member of the World Trade Organization (WTO) in 1995.
SADC – EU Economic Partnership Agreement
Botswana has signed an interim Economic Partnership Agreement (EPA) with the European Union (EU). The EPA provides duty and quota free access on goods to the EU markets. Negotiations need to be completed on the treatment of services and new generation issues.
China and India
Botswana, as part of SACU, launched free trade negotiations with both China and India. The negotiating parties have exchanged lists of goods that would benefit from lower tariffs.
SACU signed a Preferential Trade Agreement (PTA) on the 16th of December 2004 with the South American customs union known as Mercosur, comprised of: Argentina, Brazil, Paraguay, and Uruguay. The agreement creates the legal framework for improved trade relations between SACU and Mercosur as well as serving as a first step toward the creation of a free trade area between the two regions.
African Growth and Opportunity Act
Botswana is a beneficiary of the U.S. African Growth and Opportunity Act (AGOA), which has been extended to 2025 under the Trade Preferences Enhancement Act of 2015. The amendment also extended the duty free treatment under the Generalized System of Preferences from 2015 to December 2017. Under AGOA, more than 6,500 product categories of goods are granted duty and quota free access to the U.S. market. More information about AGOA is available on the Internet at www.agoa.info and from the Southern Africa Global Competitiveness Hub, located in Gaborone, on its website at www.satradehub.org.
African Continental Free Trade Agreement
Botswana became the 51st country to sign the African Continental Free Trade Agreement (AfCFTA) in February 2019. The agreement looks to create a single continental market for goods and services, with free movement of business persons and investments, paving the way for accelerating the establishment of the Continental Customs Union and the African customs union.