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tralac’s Daily News Selection
The selection: Tuesday, 5 July 2016
Trade-Related Developments: report to the Trade Policy Review Body from the Director-General (WTO)
The number of trade remedy investigations initiated by WTO Members has increased during the review period. Metal products, and in particular steel products, chemicals and plastics and rubber account for the largest shares of these initiations. As for previous review periods, more initiations were recorded than terminations, and anti-dumping measures made up the overwhelming majority of trade remedy actions. The analysis of sunset reviews of anti-dumping and countervailing measures initiated in 2008 and 2009 seems to indicate that there is no discernible change in extensions versus expiry of measures coinciding with the financial crisis.
During the review period, the Committees on Sanitary and Phytosanitary measures and on Technical Barriers to Trade saw significant developments. The share of SPS notifications from developing countries remained high, accounting for about two-thirds of all notifications, and confirming the increased participation of developing countries in the total number of notifications since 2007. An increase in the number of notifications does not, however, automatically imply greater use of measures taken for protectionist purposes. In the TBT area, the Committee has recorded a significant increase in the number of specific trade concerns. The 116 new and previously-raised STCs discussed during review period confirm the upward trend, observed over the past years, of a greater number of STCs being raised in the TBT Committee. [Download, pdf]
Namibia: Standards of cattle production (The Namibian)
The furore over the new import regulations imposed by South Africa on Namibian livestock is surprising. A long time ago already, Namibian farmers decided that our internal market was too small and our farming environment too inhospitable to support mass-production of livestock and meat. Insufficient production capacity would inhibit us competing at regional level with other SADC countries whose populations numbered tens of millions of people, especially with the 55 million South Africans; let alone compete in a rapidly globalising world. We therefore decided to concentrate on the quality of our livestock and meat rather than its quantity, as this would give us a competitive advantage.
COMESA: ‘Let’s harmonise sanitary, food regulation’ (Daily Mail)
There is need to harmonise sanitary and phyto-sanitary regulatory frameworks aimed at addressing food security, food health and trade and industrial development in the region, COMESA assistant secretary general Nagla El Hussainy has said. During the seventh COMESA technical meeting on SPS, Ms El Hussainy said trade within COMESA, Southern African Development Community and East African Community grew from $30.6bn in 2004 to $102.6bn. And Ministry of Agriculture permanent secretary Julius Shawa said investments in SPS capacity is still low with most countries lacking coherence in the establishment of SPS priorities and related investments.
Kenya and Rwanda’s manufacturing sector: AfDB reports examine technology, innovation and productivity policy issues
Rwanda (pdf): This approach of leapfrogging technology transfer would also allow Rwanda to participate in global value chains which in general is problematic because of its landlocked status and resulting high transport costs in both time and money to major ports. Air transport is hence the only feasible option and that is only feasible for high value components such as electronics. The likely target areas would be global technology for local markets, where Rwanda could seek to capture industrial activity in emerging consumer or industrial goods for sale into the EAC. Buying relocaters would fit well with this since, for example, the acquisition of failing refrigerator plant in, say, Europe would provide the basis for a partnership deal with European suppliers of that firm to continue to provide the inputs that Rwanda would turn into fridges for the EAC market. Rwanda should experiment in the art of quantum leaps in technology by setting up a state-owned industrial holding company that buys select failures in the industrialised world. The criteria for selecting losers should be roughly as follows:
Kenya (pdf): Tax incentives remain an important strategy for attracting foreign investors wishing to exploit the natural resource base in Kenya and those viewing Kenya as an export platform for EAC and Eastern and Southern Africa regional markets. Recent manufacturing incentives schemes in Kenya have, however, been ineffective. Reform of the incumbent incentives including those related to export zone processing, manufacturing under bond, and other incentives involving tax refunds is therefore necessary to address the challenges reducing their utilization. Review should target ensuring quick tax refunds and tight control of the refund process to reduce cases of abuse of the schemes including elimination of corruption. As these are potentially contradictory objectives, improved monitoring technology and institutional reforms will be necessary. The current schemes also need to be reviewed to reward more use of high technology and research and development.
Kenya: Diaspora remittances increase slightly in May 2016 (Central Bank)
Remittance inflows to Kenya increased by 2.3% in May 2016 compared with 1.7% growth in April 2016. The increase in May 2016 is reflected in inflows from Europe and the rest of the world. Cumulative inflows in the 12 months, to May 2016, increased by 11.1%, to $1,636 million, from $1,472 million in the year to May 2015. [Multinationals, tea pickers lock in fight that threatens the industry (Daily Nation)]
Ugandan investors negotiate tough junction into EAC (Daily Monitor)
Contrary to what their counterparts who have raised their respective national flags high making use of the freedoms through investing into other member states, Uganda is taking baby steps. Uganda has witnessed an influx of Kenya’s blue print brands such as KCB, Equity Bank, Fina Bank, Insurance Company of East Africa, chain retail supermarkets like Nakumatt and Tuskys, Brookside Dairies which bought off the country’s largest dairy corporation. Tanzania, the region’s second economic power, has also established foot prints in Uganda through Bakhresa Group with brands like Azam Television, mineral water, confectionaries and soft drinks. Uganda’s presence in other member states is hard to trace apart from a few Simba Telecom outlets which have spread wings into Kenya and Tanzania. This begs the big question: Is Uganda more porous compared to her neighbours?
RSA citrus trade sees Brexit opportunities (Fruitnet)
South Africa’s citrus industry says the UK Brexit vote could see a "normalisation" of citrus trade between Southern Africa and the UK, unencumbered by protectionism, tariffs and technical barriers to trade. The South African Citrus Growers Association says at present UK plant health regulations are the same as those of the EU, as these were harmonised in 1992. Entry requirements for citrus shipped from Southern Africa to UK are the same as entry requirements for citrus shipped to the mainland European member states of the European Union. “An independent UK will in all likelihood introduce its own plant health regulations, or at least remove or rescind those regulations that have no impact on the UK. Since the UK does not have any citrus (produce any citrus), plant health regulations on citrus imports should be easier to comply with than present EU regulations.”
Kenya’s forex reserves dip by Sh28bn as CBK fights to stabilise shilling after Brexit (Business Daily)
Kenya’s foreign currency reserves plunged by Sh28 billion last week as the Central Bank of Kenya used its fire power to stabilise the market in the wake of financial markets’ turmoil that followed Britain’s recent vote to leave the European Union. The CBK’s reserves stood at $7.237 billion (Sh732.45 billion) at the end of last week, equivalent to 4.73 months of import cover, having declined by $280 million from the previous week’s $7.517 billion (Sh760.8 billion) or 4.91 months of import cover, according to weekly official data. [Brexit chaos pushes Kenya to back burner (Daily Nation)]
Brexit makes SABMiller deal sweeter (IOL), Headwinds for India: Brexit and its impact via other countries (LiveMint)
Lesotho: Country Partnership Framework 2016-2020 (World Bank)
The World Bank Group Board of Executive Directors on 30 June endorsed a five-year Country Partnership Framework for Lesotho, expected to deliver $154m over 2016 to 2020 to projects in support of the Mountain Kingdom’s efforts to improve public sector efficiency and effectiveness and promote private sector job creation. Government spending in Lesotho is highly correlated with volatile SACU revenues (see Figure 1(b)). In the last decade, Lesotho shifted from an export driven economy to one driven by government spending. In the past four years, the government maintained public spending above 60% of GDP. The biggest contributor to this spending was the wage bill, which grew from 18.9% of GDP in 2012 to 23.1% in 2015/16 – among the highest in the world. However, such growth in public expenditure, which is dependent on volatile SACU revenues, has made the macroeconomic environment less stable, and cannot sustainably drive economic growth to address Lesotho’s extreme poverty and shared prosperity needs. Lesotho urgently needs to restore fiscal sustainability, focusing in particular on public spending. Lesotho is facing three adjustment scenarios - back-loaded, insufficient and ordered adjustment. [Download]
A selection of postings on Zimbabwe’s economy, trade prospects:
Rand might save the Zim economy (IOL)
The deVere Group, a global adviser on specialist global financial solutions, is one of those championing Zimbabwe’s adoption of the rand. As its manager for Zimbabwe, Botswana and Mozambique, Shane Helberg, recently said: “Whilst the rand perhaps isn’t as weighty as the US dollar for international trade - as it’s more volatile against major currencies - it must be noted that the dollar has not been effective in arresting the freefalling economy in recent times. Using one primary currency, the rand, for commerce, is likely to be beneficial for several key reasons.” For one thing, using just one semi-convertible currency rather than the present basket, reduces confusion and uncertainty and creates stability and certainty, which foreign investors want. Adopting the rand should also boost trade links with South Africa, Zimbabwe’s major trading partner. One could add, in particular, that it would boost Zimbabwean exports to South Africa. [Prioritise addressing policy inconsistency: IMF (NewsDay)]
Govt to set up standards regulatory authority (The Herald)
Zimbabwe’s Minister of Industry and Commerce Mike Bimha has said the appointment of Bureau Veritas as an import inspection agent is an interim measure and Government is working towards setting up a standards regulatory authority. Government last year signed a four-year Consignment-Based Conformity contract with the French global company. Minister Bimha said the Ministry of Industry and Commerce is in the process of identifying staff for the new regulatory authority.
Zimbabwe explores Tanzania to grow exports (NewsDay)
Zimbabwe's trade facilitation body, ZimTrade has called on local companies to consider growing exports to Tanzania’s pharmaceuticals, construction and leather products sectors to improve the country’s trade position and ease the cash crisis. Official figures show that Tanzania’s import bill for 2015 stood at $9,7bn, with China being the largest supplier, contributing 44%. Regionally, South Africa has a 5,6% share, while Zimbabwe contributes less than 1%. In 2015, 79% of Zimbabwe’s exports to Tanzania were construction and mining equipment, with the remaining 21% being mainly clothing and textiles, paper and printing services, as well as tobacco.
Egypt's BoP deficit jumps 260% in Jul-Mar on falling tourism revenues, transfers (Ahram)
Egypt’s balance of payments deficit leaped a whopping 260% in the first nine months of the current fiscal year due to ongoing fall of tourism receipts, services income and transfers, the Central Bank of Egypt said Sunday. The overall BoP deficit reached $3.6bn from July to March in the fiscal year 2015-2016, compared to $1bn in the same period of the previous year as the current account deficit rose by around 75% to reach $14.5bn from $8.3bn.
SA-India trade update (GCIS)
India is now SA 6th largest trade partner. Trade in 2015 was almost R95bn. Trade with India represented 4.9% of SA imports and 4.1% of exports. South Africa’s Trade statistics shows that India’s exports to South Africa increased from R29bn in 2011 to R54bn in 2015, while South Africa’s exports to India increased from R24bn in 2011 to R41bn. The trade surplus is in favour of India. Efforts are underway to promote SA exports of especially value-added products. In order to deal with the trade imbalance, the dti has undertaken outward missions to India including: [SA-France trade update (GCIS)]
Zanzibar Declaration on timber trade: update on implementation (TRAFFIC)
East African member states will establish a Secretariat to oversee the effective implementation of the Zanzibar Declaration and Bi-Lateral Timber Trade Agreements, with Zambia also requesting to become a signatory. The announcements came following a meeting hosted by the Kenya Forest Service and WWF Kenya to build on the commitments made in the Zanzibar Declaration on Illegal Trade in Timber and Forest Products that was finalized and signed in September last year at the XIV World Forestry Congress in Durban, South Africa.
OECD-FAO Agricultural Outlook 2016-2025
This year’s Outlook includes a special focus on the prospects and challenges facing agriculture in sub-Saharan Africa. The rise of the middle class, rapid urbanisation, as well as increased commercial interest in Africa’s resources and farmland, will all shape the sector’s development. As the region faces rapid population growth, agriculture will continue to be the single largest source of employment for many young people. The Outlook foresees a further increase of food imports into sub-Saharan Africa, because demand for food is expected to grow at more than 3% over the coming decade, while total agricultural production is projected to rise by only 2.6% a year, despite improvement in productivity.
Africa Carbon Forum 2016 closes in Kigali
US and WTO partners begin implementation of the Expansion of the Information Technology Agreement (USTR)
Namibia’s Competition Commission appoints acting CEO, Vitalis Ndalikokule (The Namibian)
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