News
tralac Daily News
Dispute panels established to review EU measures on imports of South African citrus fruit (WTO)
South Africa submitted its second requests for two panels in disputes it initiated concerning European Union regulations governing the importation of citrus fruits which impact imports from South Africa. The measures in question concern import restrictions imposed by the EU to control spread of the insect Thaumatotibia leucotreta, or False Codling Moth, and the fungus P. citricarpa, known as “citrus black spot.” The EU said it was not ready to accept South Africa’s first requests at a DSB meeting on 24 July.
South Africa reiterated that it has many serious concerns regarding the WTO consistency of these EU measures, which have had a severe impact on South African citrus food exports. Moreover, they appear to be adopted in response to political pressure from the EU’s citrus fruit industry, South Africa said. While South Africa does not take this decision lightly, as it has not been a frequent user of the WTO dispute settlement mechanism and the EU is an important trading partner, it also needs to ensure that its rights are properly secured. South Africa added that it would be requesting that the same three individuals serve on the two panels.
The European Union said it regretted South Africa’s decision to pursue panel proceedings in the two cases but reiterated its belief that its pest control measures are entirely justified and that it was confident it would succeed in these disputes. The DSB agreed to the establishment of the two panels.
Big rewards and risks ahead as SA’s e-commerce sector nears billion-plus transactions yearly (Engineering News)
Amid a growing digital landscape characterised by increased Internet connectivity and smartphone use, as well as a pronounced shift towards online shopping, the South African e-commerce sector is undergoing significant development. In fact, it is projected to exceed R400-billion in value by 2025, driven by an anticipated one-billion-plus transactions a year, says Accenture sales and commerce lead for Africa Mushambi Mutuma.
As of 2023, almost 44-million South Africans were connected to the Internet, compared with 25-million in 2013. Mutuma says this surge has directly fuelled the growth of e-commerce users, with projections suggesting a further increase to 37.9-million by 2027.
In this regard, he says several notable trends and innovations are reshaping the local e-commerce landscape, arguing that the seamless integration of financial technologies and digital payments is enhancing customer experiences and conversion rates.
South Africa’s abundant biodiversity presents a golden opportunity to cultivate a thriving essential and vegetable oils industry. This was said by the Chief Director of Technical Infrastructure at the Department of Trade, Industry and Competition (the dtic), Dr Tshenge Demana. Dr Demana made these remarks during his address at the 3rd Southern African Essential and Vegetable Oils Conference which took place in Pretoria, today.
He outlined that the potential of this growing industry has been demonstrated, and in order to grow this sector, the South African industry stakeholders recently identified various needs that would add impetus to the growth of the sector. “These needs relate to production, namely volume, quality, and innovation, the procurement of raw materials and knowledge of regulatory requirements and internationally recognised testing facilities,” said Dr Demana. He listed some of the challenges facing the sector. These include production volumes, quality, innovation, raw material procurement, packaging, regulatory compliance, market access, pricing, distribution, and access to finance.
“You can’t wake up today and tell Africans to stop cooking with fire”: An interview with Namibia minister of trade and industrialisation (African Arguments)
Q: Namibia exports mostly unprocessed goods – like minerals, beef, and fish – and imports almost all its consumer goods. How is your ministry attempting to change this imbalance?
A: We are now looking at interventions to make sure much of what we process is grown locally, has value-added locally, and is distributed locally. For example, we have a school feeding programme, a drought relief programme, and green scheme projects that are producing wheat. All these products are now being processed, packaged, and distributed for local consumption.
We also passed a policy last year and are busy with a law that is about to be enacted for special economic zones. We will then be able to designate specific areas in specific regions for specific industrial activities in manufacturing and the biggest sectors of our economy – mining, fishing, agriculture. We have looked at the specific areas and designated them for their competitive advantage.
On mining, we recently passed a mineral beneficiation strategy to add value locally. In the past, everything was exported in raw form. Now we are saying let’s do the value addition at home. Even if we are not ending finished products, at least we’ve done the first level of value addition. We have large deposits of lithium and, last year, there was a moratorium on exporting raw products.
Beef over veggies: Botswana and Namibia clash with Mzansi (Food For Mzansi)
The beef between Mzansi and two of its neighbours, Botswana and Namibia, is getting serious. Agbiz chief economist Wandile Sihlobo warns that trade restrictions imposed against South Africa is clashing with the spirit of regional cooperation. This, as the ongoing ban on South African vegetable imports continues to spark tensions within the Southern African Customs Union (SACU), a bloc that’s supposed to champion free trade and economic integration.
Earlier this month, Botswana’s president, Mokgweetsi Masisi, took to X (formerly Twitter) to celebrate his country’s decision to ban imported vegetables. He wrote, “Our ban on imported vegetables was a powerful move to boost our local farmers and economy. This initiative empowers Batswana by promoting self-sufficiency and improving livelihoods.”
Both Botswana and Namibia have implemented similar restrictions to encourage domestic vegetable production and reduce their reliance on South African imports. The target products include tomatoes, carrots, potatoes, cabbage, lettuce, garlic, onions, ginger, and fresh herbs.
Proposed 5% levy on companies for community project might lead to exits – Afreximbank (Nairametrics)
A new report by Afreximbank states that the proposed 5% tax on companies earning over N100 million for community development projects will result in the exits of multinationals from the country. The report titled, ”Monthly Developments in the African Macroeconomic Environment” noted that the proposal is coming despite opposition from members of the private sector.
It states, ”Nigeria’s National Assembly is considering a 5% levy on big companies to invest in community projects, despite opposition from companies and their supporters. Critics argue that companies already pay 20-30% of their profits in corporate taxes and the plan could prompt international companies to leave the market.” The report further reviewed developments in the Nigerian economy during the month of June such as the proposed injection of N2 trillion into the economy, increase in mining charges and fees and others.
Kenya: Give SMEs one year tax break (The Star)
The government should consider giving newly established small businesses at least a year before it starts levying taxes, the Kenya National Chamber of Commerce and Industry has proposed. This, it says, will help Small and Medium Enterprises (SMEs) stabilise and cut the high rate of closure where close to half a million small enterprises in Kenya dying annually on a tough operating environment.
According to the KNCCI, most entrepreneurs take up to one year to stabilise, with majority on loans whose repayment eats into their sales despite some operating in losses. This leads to tax evasion as the businesses seek survival. Kenya National Bureau of Statistics data indicates approximately 400,000 micro, small and medium enterprises (MSMEs) do not get to celebrate their second anniversary, raising concern over sustainability of the critical sector.
“What we are asking the government is that the small businesses, which majority are owned by the youth, be given a window of between six months and one year before they are brought into the tax bracket,” KNCCI chief executive Patrick Nyangweso said during an interview with the Star on Thursday. “They register their business today the next month you have brought them into the tax bracket, this is really undoing.”
Maximizing Returns to Human Capital in Mauritania for Increased Wealth and Shared Prosperity (World Bank)
The World Bank has released the seventh edition of its Economic Update for Mauritania, which highlights a slowdown in economic growth in 2023, despite strengthened macroeconomic stability. Economic growth declined in 2023 to 3.4% (0.7% in per capita), following a strong expansion of 6.4% (3.7% in per capita) in 2022. This deceleration is partly due to tighter monetary policy and fragile dynamics in some key sectors, such as rainfed agriculture and extractive industries. However, Mauritania’s growth performance remains higher than the world average of 3 percent and that of sub-Saharan Africa (2.9%).
The medium-term outlook remains favorable, with growth projected at 5.4%. In order to realize sustainable growth potential, it remains crucial to overcome structural challenges, including by improving public financial management, optimizing the use of existing labor, and creating a more stable tax base.
Boosting trade with open skies, ports, and streamlined visas in Africa (Bizcommunity)
At the recent African Continental Free Trade Area (AfCFTA) Conference, Alderman James Vos, the City of Cape Town’s Mayoral Committee Member for Economic Growth, made a compelling case for an open skies policy, expedited private sector involvement in Port of Cape Town operations, and a streamlined visa system. These initiatives are crucial for South Africa to unlock trade opportunities and create a more business-friendly environment.
The conference, held at the Durban International Convention Centre, brought together trade experts, civil society representatives, and leaders from both the private and public sectors to explore ways to integrate SMMEs into AfCFTA. Covering 1.3 billion people with a combined GDP of $3t, AfCFTA stands as the world’s largest free trade area by population.
“Only about 16% of African trade occurs within the continent, compared to 63% in Europe and 55% in Asia. AfCFTA has the potential to boost production and the movement of African-made goods, leading to faster, inclusive economic growth and employment for millions more Africans,” said Alderman Vos.
Despite these efforts, Alderman Vos stressed that substantial economic and employment growth hinges on the efficient operation of key systems and structures. “Transnet must expedite private sector involvement in our port operations and the development and maintenance of a liquid bulk terminal at the Port of Cape Town. The port’s performance impacts a diverse range of critical products, from agricultural goods to high-value exports like wine, agriculture products, and seafood,” he emphasised. Alderman Vos also called on the National Government to fulfil its commitment to the Single African Air Transport Market, an African Union initiative promoting trade, travel, and connectivity through open skies.
Removal of non-tariff barriers to trade will deepen AfCFTA — Dr Fareed Arthur (Graphic)
The removal of non-tariff and some technical trade barriers will ensure the effective implementation of the African Continental Free Trade Area (AfCFTA), the National Coordinator of the AfCFTA Coordination Office, Dr Fareed Kwesi Arthur, has stated.
He explained that the barriers include excessive delays and ad hoc fees being charged at some borders, cumbersome document requirements and restrictive regulations on product standards, including other legal requirements, that countries enact to ensure that products are safe to protect the environment or for reasons of national security.
Dr Arthur acknowledged that though some of the barriers, including movement checks for purposes of ensuring national security, may be difficult to remove, a lot needed to be done to remove the barriers to ensure full and effective AfCFTA implementation on the ground.
“I always say that AfCFTA will not be implemented in the boardrooms. AfCFTA is going to be implemented on the borders with the women who cross the border with their goods, the men who cross the border with their goods and so on. And the only way we can get governments to push and remove some of the barriers is by getting civil society advocacy properly and purposefully targeted,” he stressed.
EABC lauds commencement of Tripartite Free Trade Area following ratification by Angola (HapaKenya)
The East African Business Council (EABC) has applauded the commencement of the Tripartite Free Trade Area (TFTA), following the ratification by Angola on 25th June this year. This brings the total number of Instruments of Ratification deposited to fourteen, meeting the number required for the Agreement to enter into force out of the 29 member states. Lauding the new developments, Adrian Njau, EABC Acting Executive Director, stated, “Our dream is to see businesses start trading under the TFTA preferential tariff.”
Njau further explained that in 2022, EAC exports to SADC amounted to USD 3.79 billion, while imports totaled USD 3.9 billion. EAC exports to COMESA were USD 6 billion, with imports at USD 4.7 billion, according to the EAC Trade and Investment Report 2022. EAC Partner States trade more with Tripartite member states compared to the rest of Africa due to overlapping membership in SADC and COMESA, where they benefit from preferential tariff treatment. Tanzania and DRC are in SADC, while Kenya, Uganda, Burundi, and Rwanda are in COMESA.
Statistics show that Tripartite countries import more than 99% of similar products exported by the EAC, indicating that the EAC has a considerable market opportunity to grow its exports under the TFTA preferential tariff regime. This is for products such as vegetables, meat, bovine, pasta, among others.
The Member States that have deposited their Instruments of Ratification include Kenya, Angola, Botswana, Burundi, Egypt, Eswatini, Lesotho, Malawi, Namibia, Rwanda, South Africa, Uganda, Zambia and Zimbabwe.
Sadc Industrialisation week: A chance to thrive (The Zimbabwe Independent)
The upcoming Sadc Industrialisation Week and Exhibition, set to take place in Harare from July 28 to August 2, presents a unique opportunity for various sectors of the economy, including the government, to showcase their potential, foster collaboration, and drive growth. It will run under the theme Promoting innovation to unlock opportunities for sustainable economic growth and development: Towards an industrialised Sadc.
The event brings together leading private sector experts, regional and global policymakers, development finance institutions, Sadc officials, donors, civil society, and prominent industrialists and captains of industry in Sadc and the continent. Their goal is to identify investment opportunities, address industrialisation bottlenecks, and jointly recommend solutions.
Dozens of finance and foreign ministers met this week to call for radical action to reform the international financial architecture, empower developing countries in international institutions and channel trillions of dollars towards sustainable development in Africa and other developing countries. Nine years after the historic agreement on financing for development, the Addis Ababa Action Agenda, United Nations Member States once again convened in Addis Ababa, Ethiopia, to renew the push for sustainable development financing and the Sustainable Development Goals (SDGs).
“Faced with sky-high debt burdens and costs of capital, developing countries have limited prospects of financing the Sustainable Development Goals,” stated António Guterres, Secretary-General of the United Nations in a video message to the conference. He continued: “The Fourth International Conference on Financing for Development provides a unique opportunity to tackle these challenges head on. It opens the door for world leaders to adopt ambitious reforms to deliver affordable long-term financing at scale – and deliver the SDG Stimulus. And it presents a unique opportunity to reform an international financial system that is outdated, dysfunctional and unfair.”
After four years of a series of global shocks – including the COVID-19 pandemic, geopolitical conflicts and economic instability – the SDG financing gap for developing countries has ballooned to USD 4 trillion annually. The financing gap and accompanying debt challenges have worsened poverty and inequality, putting the world off track to meet international targets set in 2015. The challenges countries face in raising sufficient resources have laid bare structural flaws in the international financial architecture and accelerated calls for reforms.
“We’re all in as a genuine partner. Partnering for an open and fair society. Partnering for economic empowerment and inclusive prosperity — for all our people. AGOA has played an instrumental role in realizing this vision, and the AGOA Forum this week allowed us to have constructive discussions on how we can get there.
“We heard from labor, civil society, and private sector leaders. We explored barriers that women, youth, MSMEs, and the African Diaspora face in accessing trade and investment opportunities and how we can use the AGOA more effectively to drive inclusive and sustainable economic growth. We explored how to better use the multilateral trading system to benefit more people, particularly underserved communities.
“We also discussed opportunities to modernize the AGOA program to realize its full potential as a tool for development and regional economic integration. And we discussed how the United States and AGOA partners can collectively create and promote stronger high-standard investment opportunities.
“We have a lot of work ahead of us, but as we bring this Forum to a conclusion, Ambassador Tai and I leave optimistic and hopeful. I am heartened by our conversation with the U.S. Members of Congress and their commitment to reauthorization and willingness to explore how we can modernize the legislation to the benefit of people across Africa and in America.
“Let us move forward with enthusiasm and a commitment to the work ahead of us as we write the next chapter of our AGOA story together.”
“The Congress of South African Trade Unions (COSATU) welcomes the successful African Growth and Opportunities Act (AGOA) Forum held from 24 to 26 July in Washington D.C. We support the South African government’s efforts to extend South Africa and other African countries’ membership in AGOA and craft a new and enhanced AGOA that will increase the scope of products covered to further boost Africa and South Africa’s economic and industrial development, job creation and decent work.
“Following the progressive precedence set by South Africa’s 2023 AGOA Forum where Organised Labour, including COSATU and our sister unions from Africa and the US actively participated, the 2024 AGOA Forum upheld this progressive inclusion of the voice of workers at AGOA. This is important to ensure the cause of decent work, fair labour practices and sustainable development are placed firmly on the AGOA agenda.
“A renewed AGOA needs to include provisions to support compliance with fair labour practices and penalise employers who flout labour laws. COSATU is heartened by the positive support we have received from the US labour movement which has a long history of solidarity with South African working-class struggles. The Federation is inspired by the active participation and clear sense of unity displayed at the AGOA Forum by the trade union movement across Africa and the US in support of a new AGOA which places decent work and fair labour practices, job creation and economic development at its heart.”
African trade ministers call for renewal of Agoa by end of 2024 (IOL)
African trade ministers have urged the US government to do away with the annual reviews of the African Growth and Opportunity Act (Agoa) and expressed concerns over the unilateral removal of eligible members from the trade agreement by the US.
The ministers also expressed the importance of an expeditious renewal of Agoa by the end of 2024, with non-controversial enhancements and amendments for a minimum of 16 years to provide the required predictability and certainty to the trade and investments relationships between the two sides and to address graduation side by side with the extension of Agoa to preserve existing regional value chains.
This was expressed in a read-out statement of African ministers under the AU yesterday at the 21st Agoa Forum in Washington DC, where they are seeking an early renewal of the trade deal.
The legislation, which was first enacted in 2000, is scheduled to expire in September 2025, but there is a new bill seeking to extend the preferential trade agreement by 16 years, pushing out the programme’s expiry date from 2025 to 2041. “We take note that the annual reviews contribute to uncertainty and unpredictability, and urge the US Administration to adjust the Agoa eligibility review from the current practice of annual review to a three-year cycle, in alignment with other US preference schemes,” read the statement.
“We call upon the US Administration to reassess the impact of annual and out of cycle reviews, which reduces investor appetite. “We urge the US Administration to refrain from using non-trade considerations in determining Agoa eligibility criteria and to ensure the developmental dimension of the Agoa programme, particularly in relation to infrastructure, industrial development, and technology transfer. We stress the importance of addressing graduation in order not to jeopardise the achieved gains. “A review of Agoa conditionalities should ensure the prioritisation of continued mutual benefits.”
See also:
Lethabo Sithole: Key provisions of the US’s Agoa improvement act (BusinessLIVE)
Spotlight on Trade Act Renewal at the 2024 AGOA Forum in DC (allAfrica)
Remarks:
Remarks by APNSA Jake Sullivan at the African Growth and Opportunity Act (AGOA) Forum (The White House)
Remarks at the 2024 AGOA Forum by Jose W. Fernandez, Under Secretary For Economic Growth, Energy, And The Environment (US Department of State)
Standard Bank Highlights Mutual Partnerships, Economic Opportunities At AGOA Private Sector Forum (Africa.com)
Speaking on Tuesday at the AGOA Private Sector Forum, Anne Aliker, Head Client Coverage, Corporate and Investment Banking, Standard Bank extolled the value of international trade and infrastructure investments, highlighting the vast potential for mutual partnerships and prospects for economic development. She went on to say that agreements such as the African Growth and Opportunity Act (AGOA) have driven growth on both continents, providing qualified African countries duty-free access to the U.S. market for many goods.
While challenges exist, immense opportunities exist for investors who approach with diligence and adaptability.
Hosted by the Corporate Council on Africa (CCA), the AGOA Private Sector Forum drew more than 300 attendees. Speakers included Antony Blinken, Secretary of State – State Department, Hon. Parks Tau, Minister of Trade, Industry and Competition, Republic of South Africa and H.E. Albert Muchanga, Commissioner for Economic Development, Tourism, Trade and Mining, African Union as well as corporate executives and entrepreneurs. The public and private sector leaders are looking to burnish economic investments, especially in diverse sectors such as technology, energy, agriculture and health care.
Aliker said AGOA approaches its current expiry date of 2025, an important moment to explore what steps the U.S. and African countries can take to deepen relations and lay the foundation for enhanced cooperation and mutual benefit. “In an environment where not everything is consistent, we see the industry relying on consistency,” she said. “If there is something that can be done for AGOA that creates dependable protocols, it would be extremely beneficial.”
African, U.S. Unions Champion Worker Rights In Agoa Trade Agreement Renewal (Solidarity Center)
Trade agreements, including the sub-Saharan region’s African Growth and Opportunity Act (AGOA), must create economic growth that benefits working people and their communities, said U.S. and African labor representatives at a labor stakeholder event and civil society and labor forum this week in Washington, D.C. Labor and other civil society organizations met ahead of Thursday’s U.S. Trade Representative (USTR) 21st AGOA Forum, which solicits feedback from stakeholders in anticipation of the agreement’s renewal next year.
Welcoming presenters and participants to the U.S. “House of Labor,” which represents 14.5 million union members through AFL-CIO affiliation, AFL-CIO Secretary Treasurer and Solidarity Center Board Member Fred Redmond said labor is taking a united stand on worker-centered trade agreements and economic growth. The AFL-CIO supports a renewed AGOA program that strengthens labor standards and includes effective monitoring and enforcement mechanisms.
“Your work here doesn’t just lift up workers in Africa: It lifts up workers all around the world,” said Redmond, adding that AGOA renewal is an opportunity for labor to promote “a new vision for an economic and trade agenda that spurs inclusive growth to benefit African workers for generations to come. “The engine of growth should be decent work,” said Redmond.
“We are a rich continent with poor people,” said COSATU President Zingiswa Losi at the July 24, 2024, Civil Society and Labor Forum. “Worker rights and collective bargaining must be [at] the center of all trade agreements.”
Remarks by Ambassador Katherine Tai at the 2024 AGOA Civil Society and Organized Labor Forum
Dr Thani Al Zeyoudi joins BRICS trade ministers to call for greater cooperation (WAMa)
During the 14th BRICS Trade Ministers Meeting, attended by Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, the UAE renewed the call for enhanced trade cooperation among member nations and firm opposition to stimulate the flow goods and services around the world
Dr. Al Zeyoudi signed a Joint Communique with the participating ministers to reaffirm the commitment to comprehensive cooperation among member countries in several key areas of common interest, including strengthening their cooperation in the multilateral trading system, supporting Joint value chains; facilitating agricultural trade; promoting special economic zones as engines of cooperation, fostering e-commerce while protecting consumer rights; supporting MSMEs through technology and export cooperation.
The communique also underscored how investment and collaboration are key toward the enhancement of intra-BRICS global value chains (GVCs), in addition to advancing the potential of BRICS members’ special economic zones, both of which would help to increase competitiveness in new industries, for example in renewable energy.
In addition to the Joint Communique, the 14th Trade Ministers Meeting adopted a BRICS Cooperation Framework on Special Economic Zones, an agreement aimed at harnessing the potential of Special Economic Zones (SEZs) in BRICS countries and utilising them as established mechanisms to enhance trade and industrial cooperation.
G20 Nations Take ‘Important Step’ Toward Fair Taxation of Ultra-Rich (Common Dreams)
Despite pushback from the United States delegation, finance ministers at a meeting of the G20 countries in Rio de Janeiro on Thursday agreed on the need to develop a global taxation system in which the richest in the world are taxed at a higher rate—potentially unlocking hundreds of billions of dollars annually to help close the international wealth gap.
Ahead of the G20 Summit scheduled for November, which Brazilian President Luiz Inácio Lula da Silva’s government will host, the finance officials met this week to discuss economic issues and ultimately agreed to start a “dialogue on fair and progressive taxation, including of ultra-high-net-worth individuals.”
“With full respect to tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed,” the ministers wrote in a declaration that was viewed by Politico. “Finally, the richest people are being told they can’t game the tax system or avoid paying their fair share. Governments have for too long been complicit in helping the ultra-rich pay little or zero tax.”
Although the agreement only states that countries will discuss the need for the wealthy to pay their fair share to help fight poverty and fund public education and other services, the global anti-poverty group Oxfam International said the meeting represented “serious global progress.”
Susana Ruiz, tax policy lead for Oxfam called on G20 heads of state to “go further than their finance ministers” at the G20 Summit in November “and back concrete coordination: agreeing on a new global standard that taxes the ultra-rich at a rate high enough to close the gap between them and the rest of us.”
Steenhuisen urges G20 members to collaborate on policies alleviating food insecurity (Engineering News)
In addressing delegates of a ministerial meeting of the Group of Twenty (G20) Task Force, in Brazil, this week on behalf of South Africa, newly elected Agriculture Minister John Steenhuisen congratulated the South American country on its efforts to fight food insecurity and malnutrition.
He referred to the establishment of the Task Force for a Global Alliance against Hunger and Poverty that was proposed by Brazil’s G20 presidency. The alliance aims to gather funds and knowledge towards implementing public policies and social technologies that are effective in reducing global hunger and poverty.
“South Africa’s point of emphasis on the identified issues and solutions for prioritisation by the global alliance include investment in agriculture, which is key to sustainable development. Current global crises have widened investment gaps, especially in African agriculture, thereby leaving smallholder farmers behind in the development trajectory,” Steenhuisen explained.
Quick links
Infrastructure Development Key To EAC Leaders’ Ambitions (Africa.com)
Time to cede loyalty to supranational African ideals (The East African)
Bumpy road ahead as battery fears hit global EV rollout (SciDev.Net)
Informal Working Group on Trade and Gender welcomes new member, launches online policy tool (WTO)
