I.  Commercial Overview  (Executive Summary)

   U.S. direct exports to Botswana annually ranged from
USD 20 - 30 million over the last four years, reaching USD
24.6 million in 1993.  About half the U.S. goods sold in
Botswana were manufactured commodities.  This figure
represents only a two percent portion of the total trade
pie, the largest slices being reserved by South Africa
(with an 85 percent share of the market), and the European
Union, which contributed a 5.5 percent share of all
exports to Botswana.  Most exports from the U.S. are
primarily high-value, low-bulk items, and one-time sales
of high-priced items such as communications equipment,
construction/mining equipment, aircraft, and other
expensive items.  These account for "spikes" in the
year-to-year direct bilateral trade statistics.  (A USD
46.5 million export plateau reached in 1992 was the result
of the sale of one aircraft worth 25.2 million.)
Handicrafts, jewelry, and other low value-added goods make
up the bulk of Botswana's direct exports to the U.S.,
which totalled USD 8.5 million in 1993.

    However, direct trade statistics understate the value
of the U.S. goods and services sold in Botswana.  Most
U.S. - origin goods enter the Southern African Customs
Union (SACU -- comprising Botswana, South Africa, Lesotho,
Swaziland, and Namibia) through South Africa and are
recorded as imports into that country.  The goods are then
re-exported to Botswana by South African distributors and
dealers.  The U.S. Embassy estimates the total value of
U.S. goods and services sold in Botswana in 1993 to be in
excess of USD 110 million, or close to a six percent share
of Botswana's total imports.  Probably 20 percent of the
imported manufactured goods purchased in Botswana are
U.S. - origin goods.  Similarly, Botswana's major export
commodity -- diamonds -- enter the U.S. indirectly and do
not register in direct trade statistics.

A.  Challenges to Direct U.S. - Botswana Trade

   Distance, a small market size (Botswana's population is
1.44 million), and a lack of historical trading ties
between the U.S. and Botswana have contributed to the
relatively low level of trade between the two nations.
Other market barriers also exist:  Botswana's membership
in SACU means prohibitive customs penalties are levied on
certain goods entering from outside the Customs Union, up
to 100 - 120% for appliances, vehicles, and other high
value-added consumer goods.  These are precisely the
product categories in which U.S. manufacturers have a
competitive advantage.  Duty-free access and proximity
mean South Africa dominates the Botswana market.  However,
only about half of the "South African" goods and  services
exported to Botswana are actually produced in South
Africa.

   These factors notwithstanding, Botswana has maintained
a free-market philosophy since independence from Britain
in 1966.  Moreover, U.S. products and services are highly
regarded by both the public and private sectors.
Eagerness to diversify its economy away from dependence on
the mineral sector means that U.S. firms are ardently
courted to invest in the manufacturing sector of the
economy.  Government decision-making is deliberate, but
bureaucratic delays found in other developing countries
are sometimes also present in Botswana.  However, on
balance, Botswana remains a remarkably "user-friendly"
country for U.S. trade and investment.