Club of mozambique, 13 June 2025

Would a free trade agreement with the US be of interest to Mozambique?

The Mozambican government intends to negotiate a free trade agreement with the United States. An economist at the CIP fears that it could harm the country’s economy due to “weak competitiveness”.
The Mozambican government wants to negotiate a free trade agreement with the United States of America, after President Donald Trump imposed a 16% tariff on Mozambican products.

The African Growth and Opportunity Act (AGOA), which benefits Mozambique, expires in 2025. In this sense, the government intends to renegotiate this agreement in order to try to maintain or expand preferential access.

In an interview with DW, Teresa Boene, researcher and economist at the Centre for Public Integrity (CIP) for the area of Public Finance, argues that the impact of the tariff will be “marginal”, given the low volume of Mozambican exports. Meanwhile, she warns that a free trade agreement could harm the country’s economy, due to its “weak competitiveness” and “underdeveloped manufacturing industry”.

DW Africa: What does the imposition of a 16% customs tariff mean for Mozambique in practice? What will its economic and commercial impact be?

Teresa Boene (TB): I think we have to look at the volume of trade transactions between Mozambique and the United States and the data shows that this volume is marginal.

Exports from Mozambique to the United States represent, on average, 2% of the country’s total exports. This suggests that the impact of these impositions could be marginal for the country. However, as it is a developing country, a poor country, any action that aims to boost economic activity is welcome.

DW Africa: What consequences could this tariff have for Mozambican exports and for the economic relationship with the United States?

TB: It would possibly be reduced. However, since exports from Mozambique to the United States are not significant, it is possible to predict that the impact will be marginal.

Even the African Growth and Opportunity Act (AGOA) itself is being underutilized, so to speak, because it has been in force for about 25 years. However, the level of exports from Mozambique to the United States is marginal and with its implementation, there has been no increase in the level of exports, and this may be related, perhaps, to the level of competitiveness of Mozambican products in the international market, which is limited.

DW Africa: Is there any real interest on the part of the US in establishing a free trade agreement with Mozambique? Under what conditions would this be feasible?

TB: I imagine there may be interest. During the extension of the African Growth and Opportunity Act (AGOA), the United States made it clear that it intended to negotiate a bilateral free trade agreement when this law was renewed, given that this law provides benefits for eligible countries in Sub-Saharan Africa.

So, possibly, when this law is renewed, there may be negotiations with a view to it also benefiting the United States.

Source: Deutsche Welle