By SVEN LUNSCHE

ZIMBABWE has hit back hard at South Africa by excluding it from a new liberalised tariff regime aimed at boosting its sickly manufacturing sector.

Finance Minister Herbert Murerewa on Friday announced the abolition of import duties on capital goods and deep cuts in tax on industrial spares, Reuters reports. The long-awaited tariffs, which were welcomed by commerce and industry, take effect on March 1.

Murerewa says the new tariffs and taxes will not apply in cases where Zimbabwe had preferential trading pacts, including South Africa, with which it is negotiating a crucial economic agreement.

Zimbabwe has been highly critical of the SA approach towards the trade talks, pointing out that while it had opened its borders to SA imports, Pretoria continues to protect its industries via high tariffs and other import duties. Over the past few years Zimbabwe has emerged as one of the country's largest markets in Africa. Harare claims South Africa is dumping its goods.

Trade and Industry Minister Alec Erwin said this week that the two countries were close to finalising an agreement on trade in textile and clothing, but said a trade treaty covering agricultural and manufacturing items was still some time off.

Zimbabwe has signed an agreement in principle with South Africa requiring Pretoria to restore to about 30% duty on Zimbabwean textile and clothing exports, which it trebled in 1992 to protect its own industry. The SA move crippled Zimbabwe's industry.

Murerewa said the tariff regime was not aimed at retaliating against any of Zimbabwe's trading partners. "They are part of our economic reforms to boost manufacturing and industrial growth."

Murerewa said the new duties should not affect Zimbabwe's trade talks with South Africa or the agreement in principle on textiles and clothing.

Murerewa announced in Harare that duties on raw materials for manufacturing and on books would be slashed to 5% from 40%; on spares to 15% from 56% and on partly processed inputs to 15% from 55%. Finished imported goods would attract duty of between 40% and 85%, with the highest tariffs applying to electronics, batteries, luggage, textile and clothing.