Happiness Zengeni and Martin Kadzere
BUREAU Veritas, a French-based quality inspection firm, will start operations in the country during the first quarter as Government moves to curb influx of cheap imports. Industry and Commerce Minister Mike Bimha told The Herald Business that the company would operate until the Government completes setting up the Standard Regulatory Authority. The Consignment Based Conformity Assessment Agreement between the Government and Bureau Veritas aims to curb the influx of cheap imports by way of inspections of each batch of goods entering the country. Under the arrangement, the Government will receive a five percent royalty on fees charged on all importers.
“We have a process of setting up SRA to ensure proper pricing of imports,” said Minister Bimha in an interview.
“But as the process takes its course, we have engaged Veritas to inspect imports and we have sought a condonation (permission to bypass normal procedures) from the Cabinet Committee on Legislation to speed up the process.”
The agreement allows the Government to protect the local manufacturing industry while simultaneously protecting the unsuspecting consumer from sub standards goods.
The draft of the agreement with Bureau Veritas has been approved by the Attorney-General’s legal advice department and public agreements advisory committee and now awaits Cabinet approval.
“We want to ensure acceptable quality and prices of imports,” said Minister Bimha.
Zimbabwe’s economy is suffering from the influx of cheap imports while at the same time the country lacks capacity to inspect goods entering the country and this has created unfair competition.
In 10 months to October last year, Zimbabwe imported goods worth ,3 billion, according to finance ministry.
Merchandise imports, excluding fuel, electricity, and services accounted for about 60 percent of the country’s import bill, indicating the country’s heavy reliance on imported goods and services that can be easily produced locally. The disproportionate gap between the country’s exports and imports resulted in a trade deficit of ,9 billion. Many governments are taking action against cheap imports to protect their domestic industries.
The WTO agreement under GATT (Article 6) allows governments to act against dumping where there is genuine “material” injury to the competing domestic industry.
In order to do that, the Government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter’s home market price), and show that the dumping is causing injury or threatening to do so.
Early 2000, Government through the Competition and Tariff Commission which is the investigating authority for unfair trade practices enacted two statutory instruments namely: The competition (anti-dumping and countervailing duty) (investigations) Regulations 2002 and the Competition (safeguards) (investigations) Regulations 2006. However, the CTC is not capacitated to investigate and prove that dumping is taking place in Zimbabwe.
Analysts said the coming in of Bureau Veritas would capacitate and strengthen the investigating authority to establish the existence of unfair trade practices caused by dumping and subsidised imports to initiate anti-dumping action and instituting countervailing measures.
Once capacity is built, as a WTO member, the country can then restrict imports of a product temporarily if its domestic industry is injured or threatened with injury caused by imports.
Formed in 1828, Bureau Veritas is a global leader in testing, inspection and certification, delivering high quality services to help clients meet the growing challenges of quality, safety, environmental protection and social responsibility.
The company offers innovative solutions that go beyond simple compliance with regulations and standards, reducing risk, improving performance and promoting sustainable development.