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tralac’s Daily News Selection
The selection: Thursday, 6 October 2016
The Sixth Global Review of Aid for Trade on “promoting connectivity” will take place 11-13 July 2017: details
Lily Sommer, David Luke: ‘Priority trade policy actions to support the 2030 Agenda and transform African livelihoods’ (pdf, ICTSD)
UNECA modelling exercises indicate that establishing the CFTA would boost intra-African trade by $34.6bn (52.3%) from 10.2% of total African trade in 2010 to 15.5% in 2022, translating into real income gains of 0.2% ($296.7bn). Increases would be highest in industrial products (53.3% or $27.9bn), which demonstrates the role the CFTA can play in driving Africa’s diversification and structural transformation. Real wages for all categories of African workers would be positively affected, with unskilled workers benefiting most—the unskilled employed in non-agricultural sectors would obtain a 0.80% increase in real wages and those employed in agriculture would see a 0.74% increase. The distribution of CFTA gains are therefore supportive of inequality and poverty reduction efforts. Gains are even higher when the CFTA is implemented alongside trade facilitation measures.
Timely implementation of the CFTA is crucial, particularly in the context of MRTAs and shifts towards reciprocity (see section 4). Given the political nature of the CFTA, and with the short time frame that remains for negotiations, a political track is being put in place to complement the negotiating track. The 2016 African Union Summit authorised the appointment of an Eminent Persons Group to help address complex issues in the negotiations, build consensus and champion the CFTA. [Companion ICTSD think piece: The 2030 Agenda and the potential contribution of trade to gender equality]
Tackling "non-tariff measures", the new frontier for global trade (UNCTAD)
The real untapped potential for further trade growth lies in regulation. Some 96% of world trade is affected by at least one regulation, often referred to as a "non-tariff measure", or NTM. Meeting these formidable, complex and often opaque rules requires financial and technical resources, which means that the smallest and most vulnerable companies and countries pay the heftiest price. This is especially true for exporters from the 48 least developed countries, who lose an estimated $23bn a year – that’s 15% of their exports, which far exceeds the loss incurred by remaining tariffs – because they are unable to comply with non-tariff measures. While these measures and other regulations are legitimate, the sheer number of them continues to fragment trade. And we can expect the importance of regulation – particularly when related to public health, safety and the environment – to increase in the future, increasing costs to trade as they do so. This chart shows the percentage by which exports from each of the 48 least developed countries into advanced, G20 countries would increase if not affected by non-tariff measures (in red) and traditional tariffs (blue).
Concluding today, in Geneva: Expert meeting on Non-tariff Measures, and Productivity, Non-Tariff Measures and Openness (PRONTO) meeting
The two-day meeting will revise and further develop the classification, bringing together senior trade and development experts, policymakers, trade negotiators, academics and other stakeholders to examine challenges and progress made in the common understanding of NTMs and transparency. The event will be combined with a Productivity, Non-Tariff Measures and Openness (PRONTO) meeting on NTMs. The PRONTO project is a collaborative research project on regulatory barriers to trade.
Simon Barber: ‘US getting its second-hand knickers in a knot’ (Business Day)
The office of the US Trade Representative is conducting its annual review of AGOA beneficiaries to see if any are out of compliance with the act’s conditions. In 2015, SA was in the crosshairs for being difficult about American chicken, pork and beef. In 2016 the focus is on Kenya, Tanzania, Uganda, Rwanda and Burundi as members of the EAC. The problem is previously owned underpants and other such items. The Washington trade association that stands up for exporters of donated hand-me-downs calls itself Smart, an acronym for Secondary Materials And Recycled Textiles. The lobby has asked the US trade representative for an out-of-cycle review of EAC members’ AGOA eligibility unless there is a change of heart at its next heads of government meeting in November. US diplomats in EAC capitals have been busy badgering their hosts on Smart’s behalf.
South Africa: Cape business, government meet to minimise the effect of Brexit (Wesgro)
The UK was the second most important export market for the Western Cape last financial year and the province’s largest investor. Last year the Cape exports to the UK were valued at R8.9bn we and had a positive trade surplus of R877m. Exports to the entire European Union were valued at R33bn in 2015, with the United Kingdom accounting for 36% of these purchases. The UK has long been a major market for Western Cape agribusiness. Last year it bought R1.5 billion worth of wine, R1.2bn worth of apples and pears, and R4.8bn of citrus from the Cape. The seminar’s chairperson, Western Cape Economic Opportunities Minister, Alan Winde, has been liaising with the British Consul General, Ed Roman, since Brexit became a prospect and despite the unexpected referendum result, is "excited by the opportunities for engagement and renegotiation regarding the trade agreements between SA and the UK. After all our competitors in the rest of the developing world are having the same discussions and we cannot sit back - we have to be proactive."
Bankole calls for stronger trade relations between Nigeria, Britain (Vanguard)
Former speaker of the House of Representatives, Dimeji Bankole, has called on Nigeria and Britain to discuss modalities that would help strengthen trade relations between the two countries. Bankole, who was earlier announced as the new voluntary Honorary Vice President of Africa House and the Africa for Growth Initiative, made the call at the United Kingdom Houses of Parliament, where he addressed VIPs from the world of politics and commerce.
Ethiopia: First International Agro-Industry Investment Forum (UNIDO)
"With foreign direct investment flows to the country amounting to over $2bn in 2015 alone, Ethiopia is becoming a hot spot for investors, especially in textiles and garments,” said Li Yong, Director General of UNIDO, during the opening of the First International Agro-Industry Investment Forum. Minister of Industry, Ahmed Abtew, on behalf of Prime Minister Hailemariam Desalegn, said: “With our Government’s unreserved commitment and strategic leadership, we are to build on our global competitive advantages in agriculture-based light manufacturing to realize our vision of becoming Africa’s light manufacturing hub by 2025.” The forum will discuss Ethiopia’s investment climate and private financing, and present a total of 58 investment profiles in food processing, textiles and garments, and leather and leather products.
Angola: study estimates extent of post-harvest loss (FAO)
FAO, the government of Angola and the AUC, with funding from the government of Norway, recently facilitated a comprehensive study on the socio-economic impacts of post-harvest losses and presented alternatives to minimize waste in Angola and guarantee the food and nutrition security for the population of the country. This was the first study of this nature in Angola. It found that post-harvest loss of cereals (maize) in Angola are estimated at 3.4 trillion Kwanzas, (about $20.5bn) while the tubers is over 7.5 billion Kwanzas (about $45m) annually. The FAO project sought to restore the institutional capacity of Angola regarding the reduction of post-harvest losses through national awareness of institutions and bodies for the formulation of policies, strategies and specific investment programs to mitigate the effects and impacts of these losses to household income. The workshop also proposed the development of the second phase of the project. [Tinashe Kapuya, Wandile Sihlobo: ‘Africa needs a future farming strategy’]
Dar, DRC for stronger trade ties (Daily News)
Trade volumes between Tanzania and the DRC have significantly surged from 23.1 billion/- in 2009 to 393.6 billion/- last year with the latter pledging to continue using the Dar es Salaam Port for transportation of its imports and exports. It is against the backdrop of the booming business that the government, through the Tanzania Ports Authority, has extended the grace period for DRC-destined cargo from 14 to 30 days in which cargo at the port will be exempted from storage charges. “Almost 50% of our businesses in Eastern DRC are conducted through the Dar es Salaam Port and we will continue using the facility. The Government of Congo is equally happy that some challenges faced the harbour in past years have been solved in recent months,” DRC President Joseph Kabila assured President John Magufuli in Dar es Salaam yesterday.
Egypt, Sudan sign cooperation agreements: highlight need for free trade (Aswat Masriya)
Egypt’s President Abdel Fattah al-Sisi and Sudan’s Omar al-Bashir signed a "comprehensive strategic partnership" document along with other agreements on Wednesday at the Presidential Palace in Cairo. Sisi inaugurated on Wednesday the first round of the presidential-level committee between Egypt and Sudan "in an effort to consolidate partnership in all fields." The Egyptian president also affirmed the need to remove the obstacles standing in the way of free trade between Egypt and Sudan. "The free movement of goods and the full liberalisation of trade come in the context of efforts to activate the Greater Arab Free Trade Area and COMESA" Sisi said.
The path to partnership: the way forward for IGAD and the AU (ISS)
In principle, regional economic communities are an integral part of the African Peace and Security Architecture , as demonstrated by the APSA Roadmap 2016–2020, and a vital element in larger global peacebuilding structures and processes. In practice, however, collaboration is not that easy, often due to capacity constraints. This policy brief argues that to become more effective, the Intergovernmental Authority on Development must consider its comparative advantages in relation to the African Union across the conflict spectrum, and focus its engagements more effectively. It looks at practical ways to do so by examining concrete best practices and lessons from IGAD’s peace and security engagements.
Illicit financial flows: Zambia losing $3bn annually (Daily Mail)
Zambia is losing $3bn annually due to illicit financial flows mainly perpetrated in the minerals sub-sector, Financial Intelligence Centre assistant director Clement Kapalu has said. During a Deloitte and Touché hosted panel discussion yesterday under the theme ‘Combating financial crimes – building our nation’, Mr Kapalu said there is need to enforce regulatory compliance and reduce illegal money trails in cash-based economies such as Zambia. Deloitte South Africa partner Anthony Smith said people are not getting essential services from their respective governments due to illicit financial flows that benefit only few people. And Deloitte Zambia managing partner Chisanga Chungu said compliance with legislation on anti-money laundering and proceeds of crime as well as financing of terrorism have focused on banks. “However, with increased sophistication in financial crime, more sectors have become subject to scrutiny by regulators,” he said.
South Africa: State corruption and private cartels corrode public trust – Patel (Fin24)
Cartel behaviour in the private sector and corruption within the public sector are “corrosive of public trust, they unfairly distribute economic resources and they undermine legitimate enterprise”, Minister of Economic Development Ebrahim Patel said on Thursday. Patel was speaking at the Competition Commission’s annual competition law, economics and policy conference focusing on competition policy and economic growth in Cape Town.
2016 SME Competitiveness Outlook (ITC)
In addition to 35 country profiles detailing strengths and weaknesses in SME competitiveness performance, this year’s SME Competitiveness Outlook includes regional snapshots highlighting product lines with unexploited export and diversification opportunities. The Outlook finds that most regions could tap into significant unexploited export potential by directing regulatory efforts to boost SME competitiveness. In sub-Saharan Africa, the fresh food sector accounts for over 30% of the region’s unexploited export potential; metal and basic manufacturing for another 20%. The main diversification opportunities lie within the latter sector. A factor undermining the region’s diversification potential is the relatively weak adoption of international management standards, as these standards imply transferable managerial expertise.
Economic integration across Latin America: evidence from labor markets, 1990-2013 (World Bank)
Combining macroeconomic and microeconomic data and three indicators of international market integration, this paper assesses the degree to which Latin American labor markets are integrated. The results suggest that relative to East Asia, Latin American labor markets are somewhat more integrated, but considerable differences across countries persist. In addition, the evidence indicates that the degree of labor market integration across Latin American borders is significantly less than that of labor markets within Mexico and within the United States in two of the three indicators.
Global talent flows (World Bank)
A remarkable and underappreciated component of this high-skilled migration surge is the role of females. Figure 1 shows that the stock of high-skilled female immigrants in OECD countries grew by 152% between 1990 and 2010, from 5.7 to 14.4 million. Indeed, in 2010, the stock of high-skilled female migrants surpassed the stock of high-skilled male migrants. The root causes of this surge have yet to be traced out fully. Africa and Asia experienced the largest growth of high-skilled female emigration, indicating the potential role of gender inequalities and labor market challenges in origin countries as push factors.
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