Bilateral trade: A key driver of economic growth and global cooperation

Rutendo Manhimanzi

Ever pondered how and why South African apples permeate Zimbabwean supermarkets, or how Zimbabwean tobacco ends up in European factories? Behind these everyday exchanges lies a powerful engine—bilateral trade. In Zimbabwe, where informal markets buzz with foreign goods, import and export trucks queue at Beitbridge, bilateral trade is a daily reality, not just a policy term. Whether you are a vendor in Mbare Musika or a farmer in Mutoko, international trade agreements potentially have a direct effect on what you buy, sell and earn. For the informal trader, it determines or gives a guide on what products they can sell and at what profit. For the consumer, it influences the cost and variety of essentials, from bread to mobile phones. For the farmer, it has the capacity to open or close doors to regional and international markets. For the nation as a whole, it can mean either a boost in job creation thereby cushioning unemployment or an overwhelming supply of cheap imports that undercut local industries.

International trade law is a body of the appropriate rules, customs and principles that govern the exchange of goods, services and intellectual property between countries. It includes multilateral agreements, bilateral agreements and regional agreements. International trade law provides the legal backbone that governs how countries conduct trade with one another, ensuring stability and predictability. Bilateral  trade agreements therefore operationalize these rules to suit specific economic and political relations. Hence, they are interdependent since bilateral trade extracts structure and legitimacy from international trade law.

Bilateral trade refers to the exchange of goods and services between two countries under a formal or informal agreement. It is one of the most common forms of international trade and serves as a crucial engine of economic growth, development, and diplomatic relations between nations.

As Zimbabwe seeks to deepen regional and global economic ties, the legal framework governing bilateral trade plays a crucial role in ensuring transparency, compliance, and mutual benefit. Bilateral trade laws in Zimbabwe form part of the broader legal and institutional framework that governs the country’s international trade relations. These laws allow Zimbabwe to enter into trade agreements with individual countries to regulate the exchange of goods, services, and investment.

Importance of Bilateral Trade

1. Economic Growth: Bilateral trade empowers countries to specialize in the production of goods and services in which they have a comparative advantage, thereby increasing efficiency and productivity. This in turn promotes job creation, increased GDP, and enhanced standards of living.
2. Market Access: Bilateral agreements confer countries access to each other’s markets, thereby expanding the range of products available to consumers and offering businesses new opportunities for expansion and investment.
3. Diversification and Risk Reduction: multilateral trade can reduce a country’s dependence on a single market or product, in turn it results in the stabilization of their economies in times of global economic turbulence.
4. Strengthened Diplomatic Ties: Bilateral trade fosters closer diplomatic relationships by creating mutual economic interests. These ties can extend into broader areas such as security, education, and cultural exchange.

Constitutional Foundation

Section 327 of the Constitution of Zimbabwe is the cornerstone provision for trade agreements and  bilateral treaties. It provides that international treaties (including trade agreements) must be approved by Parliament before they can become binding. Any treaty that imposes fiscal obligations or rights must go through the domestic ratification process. An international treaty which has been concluded or executed by the President or under the President’s authority does not bind Zimbabwe until it has been approved by Parliament.

Domestic Legal Framework Supporting Bilateral Trade

Several laws and institutions in Zimbabwe provide the legal basis for regulating and facilitating bilateral trade:

1. Customs and Excise Act [Chapter 23:02]

This act provides the framework that governs and regulates  imports, exports, duties, and customs procedures. It ensures that goods traded under bilateral agreements are appropriately classified, taxed, and monitored. In a nutshell, the purpose of the Act is to enforce provisions of bilateral trade agreements through duty preferences and customs cooperation.

2. Control of Goods Act [Chapter 14:05]

This act empowers the government to control and regulate imports and exports through permits and quotas. Often used to enforce the conditions of trade agreements on a product-by-product basis in the interest of national considerations.

3. Trade Measures Act [Chapter 14:27]

The Act authorizes the units of measurement which may be used in trade. It further allows Zimbabwe to impose anti-dumping, countervailing, or safeguard measures consistent with bilateral trade obligations.

4. Competition Act [Chapter 14:28]

The Act ensures fair competition and prohibits monopolistic practices that can distort bilateral trade arrangements.

5. Zimbabwe Investment and Development Agency (ZIDA) Act

The major thrust is to promote, plan and implement investment promotion strategies for the purpose of encouraging investment by domestic and foreign investors. It also facilitates and regulates foreign investment, including trade-related investments under bilateral trade agreements.

Institutional Framework

1. Ministry of Foreign Affairs and International Trade: They initiate, coordinate and execute the national foreign policies. They negotiate and sign bilateral trade agreements.
2. Ministry of Industry and Commerce: Implements and monitors trade policies and promotes export development.

• ZIMRA (Zimbabwe Revenue Authority): Administers customs duties and collects revenue under trade agreements.

1. ZIDA (Zimbabwe Investment and Development Agency): Coordinates investment flows linked to trade agreements.

Challenges in the Legal Framework

1. Delays in treaty ratification by Parliament which can stall implementation.
2. Inadequate capacity in negotiating complex trade terms (legal and technical expertise).

• Overlapping legal regimes with regional blocs, for example SADC and COMESA can create inconsistencies.

Benefits of a Sound Bilateral Trade Legal Framework

1. Predictability and transparency in trade relations.
2. Protection of Zimbabwean exporters and investors abroad.

• Access to new markets and inputs.

1. Strengthening diplomatic and economic ties.

Types of Bilateral Trade Agreements

1. Free Trade Agreements (FTAs):  A Free trade Agreement is an agreement between two or more countries whereby the countries agree on defined obligations that affect trade in goods and services, and protection for investors. These eliminate trade barriers or reduce tariffs and quotas on goods and services traded between two countries, encouraging an unconfined flow of commerce.
2. Preferential Trade Agreements (PTAs): These facilitate trade between two countries or groups of countries. They offer advantages, such as reduced tariffs, to specific goods without full liberalization.

• Investment Agreements: This is a type of treaty between countries that addresses issues relevant to cross-border investments. These promote and protect cross-border investments, often including provisions on dispute resolution.

Challenges in Bilateral Trade

Despite its advantages, bilateral trade can also present challenges:

1. Trade Imbalances: One country may export significantly more than it imports, leading to economic and political tension.
2. Protectionism: Domestic industries may resist liberalized trade due to fears of increased foreign competition.

• Regulatory Differences: Divergent standards and regulations can complicate cross-border transactions and increase compliance costs.

Legal Challenges in Bilateral Trade

1. Policy Inconsistencies: Constant changes in import/export regulations through can create uncertainty for trade partners.
2. Corruption and Bureaucracy: Inefficient customs systems and corruption can hinder the smooth implementation and administration of trade agreements.
3. Dispute Resolution: Lack of clear legal mechanisms for dispute resolution under some bilateral agreements creates challenges for investors and traders.
4. Non-Tariff Barriers: These include quality standards and licensing requirements that may conflict with trade obligations, leading to disputes.

The Role of the Judiciary and Legal Institutions

The Judiciary is a central organ in dispensing   justice. Zimbabwean courts play a crucial role in the interpretation of trade laws and dispute resolution involving foreign and domestic traders. Additionally, institutions like the Zimbabwe Revenue Authority (ZIMRA) and Ministry of Foreign Affairs and International Trade are central to the administration of trade agreements.

Conclusion

Bilateral trade plays a vital role in bridging economies, fostering mutual growth, and enhancing international cooperation. While it may not solve all global trade issues, it remains a practical and impactful tool for nations aiming to strengthen their economic and strategic partnerships.  It plays a foundational role in shaping trade relationships and ensuring compliance with international standards for countries navigating a complex global landscape. Well-negotiated bilateral agreements can be impactful instruments for prosperity and peace.

Bilateral trade laws in Zimbabwe are anchored in both constitutional mandates and specific statutes. While the country has made progress in crafting a legal statute that supports bilateral trade, more work is needed to streamline enforcement, ensure legal harmonization, and build institutional capacity for effective trade diplomacy. Zimbabwe must focus on legal clarity, enforcement, transparency, and alignment with international trade norms. Doing so will enhance investor confidence, promote economic growth, and strengthen  global trade partnerships.

Rutendo Manhimanzi is a registered Legal Practitioner, and she practices in Avondale, Harare under the Law Firm Ruzvidzo Legal Counsel. She can be reached on +263 773 589 263 or email rmanhimanzi@yahoo.com