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Divides run deep as Ministers arrive at Nairobi WTO meet
Trade ministers are arriving in Nairobi, Kenya to begin their latest biennial conference, set to be held from 15-18 December. Whether the WTO meet will indeed be able to yield substantive outcomes is, at this stage, anybody’s guess, given the deep divides that remained across the membership at the end of preparations in Geneva.
Members have spent the past several months negotiating the terms of a possible package of deliverables to present at the meeting, which marks the WTO’s Tenth Ministerial Conference, as well as language that will set the direction of the organisation’s future work.
However, talks in Geneva ultimately left much to be decided by ministers on all fronts once the conference officially gets underway on Tuesday afternoon, with WTO Director-General Roberto Azevêdo reporting to members on 7 December that at this stage, they “have no deliverables for Nairobi – either on the potential outcomes that we identified, or on the Ministerial Declaration.”
At the time, he urged members to use the remaining time in Geneva to advance their work as much as possible before Nairobi.
“We should aim to present ministers with documents for a yes/no decision – or if necessary with only a couple of outstanding issues to resolve,” Azevêdo urged. The days that followed, however, did not yield such a result, with members forwarding bracketed documents in some areas, while remaining divided in others on whether to continue pursuing negotiations at all.
More negotiating paralysis?
The ministerial – referred to in trade circles as MC10 – has been heralded by some trade watchers as a potential landmark event, marking both the first such conference to be held in sub-Saharan Africa, as well as the 20th anniversary of the WTO.
The gathering comes shortly after other major international events such as the UN climate talks in Paris and the Sustainable Development Summit in New York, where trade has been slated as a potential means for advancing sustainability goals.
However, the repeated setbacks in the Doha Round trade negotiations have loomed over this year’s ministerial preparations, as they have over many other meets before it. This time, however, the stakes have changed, particularly given the various evolutions in the global trade landscape, including among others the proliferation of regional and “mega-regional” trade deals – many of which are now addressing areas that do not feature in WTO negotiations.
How to ensure that the WTO remains relevant as a negotiating forum has therefore been a key focus for members, with some such as China, India, and the African Group, among others, advocating for language reaffirming the Doha Round and subsequent ministerial declarations and decisions. Others, such as the US, EU, and Japan have opposed such language and are pushing for discussing the same issues outside that context, alongside “new” ones.
Calling upon members to demonstrate flexibility and political will to resolve their disagreements, Amina Mohamed, Kenya’s Cabinet Secretary for Foreign Affairs and International Trade and the chair of the ministerial, noted in a piece for the Huffington Post that “the Tenth Ministerial in Nairobi is the last chance for some time to come for the WTO to dig itself out of its negotiating stasis.”
The updated draft of the ministerial declaration – dated 9 December and released by Bloomberg BNA – shows various bracketed areas that will need to be tackled by ministers over the coming days. Brackets are included in the preamble and all three parts of the ministerial declaration – which address the achievements and challenges over the WTO’s 20-year history, any decisions from the ministerial, and the future work of the organisation, respectively. The area with the most brackets, however, is the third and final part.
Various alternative paragraphs are put forward in that section, ranging from reaffirmations of the Doha Development Agenda and subsequent ministerial declarations and decisions; a recognition of different perspectives without any final agreement; or instead providing instructions to WTO members that they “continue deliberations” on how to address their disagreements with a view to agreeing a way forward by the end of next year.
Among these brackets is a paragraph on undertaking, “at least on an exploratory basis,” trade-related issues that would require discussion for the WTO to keep pace with the changing global trading system.
Agriculture
Over the past week, Azevêdo reportedly held Green Room meetings with ambassadors of key trading countries on the three areas that have lately commanded the attention of farm trade negotiators – specifically, agricultural export competition, the special safeguard mechanism (SSM), and public food stockholding – to see whether some of the existing gaps could be resolved.
However, farm talks chair Vangelis Vitalis of New Zealand reported at an informal meeting on Friday, 11 December that “this group did not succeed in bridging the significant gaps that still separate members,” noting that his 7 December report on the state-of-play in the agriculture negotiations “remains eerily and depressingly valid.”
Vitalis reportedly noted, however, that of the areas on the table, things were looking slightly more positive on export competition, expressing hope that ministers could provide useful guidance.
At the same meeting, members discussed a revised proposal from the G-33 coalition of developing countries regarding a special agricultural safeguard. The proposal co-exists with the earlier SSM proposal.
Currently, the special agricultural safeguard in the Agreement on Agriculture is only available to countries that converted non-tariff border measures into tariffs during the Uruguay Round of trade talks, and as a result is not available to most developing countries. The G-33 proposal would expand this to allow all developing countries access to this safeguard in the case of an import surge for products that have an SSM symbol in their schedules, among other provisions.
Sources say that the proposal has been welcomed cautiously in some quarters, such as the EU and Norway, as having more promise, while noting there was no time to discuss it ahead of Nairobi. Others, such as Brazil and Argentina, continue to question the viability of achieving a safeguard-related outcome without a result on market access.
LDC package, rules
Another lingering question is whether the event will be able to deliver substantive outcomes for the WTO’s poorest members, those classified as least developed countries (LDCs). In that context, four main areas have been discussed as items for a possible LDC “package” – duty-free, quota-free market access (DFQF), cotton, the LDC services waiver, and preferential rules of origin – with varying success.
Regarding the LDC package, while advances have been very limited in areas such as DFQF, some progress has been seen in rules of origin. Ambassador Steffen Smidt of Denmark – the talks’ chair – reportedly circulated a revised chairman’s text late last week which, he said, could serve as a potential opportunity for reaching consensus. MC10 negotiations will be based off of the bracketed draft text.
Another area where WTO members have been considering possible deliverables for Nairobi is under the “rules” negotiations, which address anti-dumping, subsidies and countervailing duties, fisheries subsidies, and provisions on regional trade agreements (RTAs).
Members have been debating possible transparency-related outcomes in these areas, as well as prohibitions on fisheries subsidies. Whether to take on more rules-related negotiations in Nairobi has nevertheless proven divisive, sources say, with no convergence on any proposals to date and no clear path forward for MC10.
While some members suggest that a lower-ambition outcome on rules may still be possible for Nairobi, others are less certain that a deal is still feasible and whether that would be the best use of ministers’ time, while still a third group opposes a rules outcome at the ministerial and is instead pushing for talks later on.
EIF pledging conference, LDC accessions
Some notable events related to LDCs are on the docket for Nairobi. For example, Monday 14 December, the day prior to the launch of the ministerial, will see the hosting of the pledging conference for the Enhanced Integrated Framework (EIF), a multi-donor Aid for Trade programme designed exclusively for least developed countries. The pledging conference marks the launch of the second phase of the EIF, which will run from 2016 to 2022.
Later in the week, two least developed countries – Liberia and Afghanistan – are set to be invited into the organisation, with the accession ceremonies scheduled for Wednesday and Thursday, respectively. The two countries would, once they ratify their accession terms, become the WTO’s 163rd and 164th members.
Possible ITA-II deal?
Another open question going into the ministerial would be whether a group of countries negotiating to expand the product coverage of the WTO’s Information Technology Agreement (ITA) – a tariff-cutting plurilateral pact for information and communication technology (ICT) products – will be able to wrap up a final deal.
A final product list was announced by the ITA-II expansion members – who are a subset of the original ITA’s membership – in July. In the months since, negotiators have been working to agree the “staging periods” for phasing out tariffs on those 201 products, with these product additions meant to reflect some of the new commercial realities of technology trade. Tariffs would be removed either upon the ITA-II’s entry into force, or within three, five, or seven years.
While advances have been reported in the latest talks, with some key participants reducing the number of goods they aim to put in the longer phase-out periods, the final hold-up is said to be the continued need for a revised national tariff schedule from China as well as for Beijing’s lifting of reservations on some members’ schedules.
“If things drag deeper into the week, this precious initiative risks being thrown into the less-than-savoury stew of the Doha Development Round discussions or misused as a negotiating chip against unrelated issues,” said John Neuffer, President and CEO of the Semiconductor Industry Association and a long-time watcher of the talks.
At the time of this writing, a press conference on the ITA, hosted by Japan, was scheduled for Wednesday 16 December, trade sources confirm. Whether an outcome will be ready by then remains uncertain at this stage.
E-commerce, TRIPS non-violation, TFA
Despite the uncertainty, there are some draft decisions already prepared for ministers to approve in Nairobi. These involve renewing the WTO’s long-standing e-commerce work programme and moratorium on e-commerce duties, as well as renewing a moratorium on non-violation and situation complaints under the Trade-Related Aspects of Intellectual Property Agreement (TRIPS), both regular items on ministerial conference agendas.
A draft decision on the WTO’s work programme on small economies has also been forwarded to ministers for approval. Separately, while WTO members are still far short of the number of ratifications needed to bring the Trade Facilitation Agreement (TFA) inked two years ago in Bali into force – with ratifications now numbering at 57 with Kenya’s submission – various events relating to the multilateral pact are scheduled to be held in Nairobi on the conference sidelines.
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WTO Ministerial: A time for reflection in Nairobi on the future of global trade
This week, trade ministers will gather together in the Kenyan capital city of Nairobi for the WTO’s Tenth Ministerial Conference, marking the first time that the global trade body’s highest-level meeting will be held in sub-Saharan Africa.
The occasion will also allow for a celebration of the WTO’s 20th anniversary, as well as giving ministers a chance to agree on a possible set of deliverables from the areas of agriculture, development and least developed country issues, and “rules,” as well as chart the course of the international organisation’s future work – particularly regarding the Doha Round and so-called new issues.
Beyond the fanfare, however, is the worry that months of preparations and negotiations may all be for naught. Headed into this year’s ministerial, disagreements among WTO members both over the content of various specific deliverables – as well as how to address the organisation’s future negotiating work – remained unresolved, leaving ministers with some very difficult decisions to make in the days ahead, as well as in the months and years to come.
Meanwhile, the structure of trade governance is changing rapidly, leaving questions over how – and if – the global trade club will be able to respond and appropriately adapt.
As the world turns, what role for WTO?
The Doha Round negotiations just hit the 14-year mark last month, having been launched in the Qatari capital in November 2001. At that stage, WTO members were aiming to wrap up this new round of negotiations – designed to have development at its core – by January 2005.
The years since, however, have taught WTO members a strikingly different lesson with multiple high-profile failures and stalls in the negotiations. The adjectives and metaphors used to describe the Doha talks in recent years have now become familiar in their negativity: the Round is struggling, stalled, moribund, a zombie, or just plain dead. The inability to update global trade rules has, in turn, fuelled fears that the challenges of the Doha Round would eventually drive the organisation into irrelevance, unable to adapt to changing realities.
Whether the original Doha mandate fully addresses the needs of the world of today – versus that of 2001 – is another question being raised in some trade circles. Abandoning it, however, has been referred to as untenable by others.
Global trade realities have indeed altered significantly in the WTO’s 20 year history. The WTO has gone from the 128 signatories of the General Agreement onTariffs and Trade (GATT) in 1994 to 162 members, with Kazakhstan the latest to enter the organisation on 30 November of this year.
China, which joined the WTO in 2001, has now become the world’s largest exporter. Developing countries, particularly emerging economies such as Brazil, Russia, India, China, and South Africa, are playing an ever-greater role in world merchandise trade, according to this year’s edition of the WTO’s International Trade Statistics.
Regional and bilateral trade deals are also on the rise, with 619 being notified to the international organisation as of this month, with over 400 of these in force. “Mega-regional” pacts, such as the recently-concluded Trans-Pacific Partnership (TPP) negotiations, have drawn particular notice for their potential commercial impacts and their forays into areas not traditionally dealt with in trade deals.
Average applied tariffs, meanwhile, have dropped in half – from 15 percent in 1995 to less than eight percent today. Trade volumes have doubled, though recent years have shown worrying signs of slowing trade growth in the wake of the global financial crisis. Meanwhile, the digital economy has taken off, with electronic commerce being credited for slashing trade costs and boosting cross-border trade, thanks to the advent of new technologies and the internet.
As the global economy continues to evolve, the Doha Round, otherwise known as the Doha Development Agenda or DDA, has meanwhile showed comparatively little progress, with some critics calling it a drag on the organisation’s work, reputation, and potential while criticising the scope of its mandate as either too broad to yield an outcome or too narrow to address the rapidly-changing trade scene.
As a result, the global trade body as a whole has repeatedly been said to be arriving at a crossroads, despite the fact that the organisation’s other key pillars – trade monitoring and the work of the WTO’s regular bodies, as well as the dispute settlement system – have been widely applauded for their success.
Trade monitoring, for example, played a significant role during and after the 2008 financial crisis in boosting transparency on the trade policy measures being taken by WTO members, while in the area of dispute settlement the global trade body hit a notable milestone in November with its 500th dispute.
However, questions on how to build upon and improve the work of these other pillars, have been raised. The pace of notifications by members across various areas has proven slower than what was originally envisioned. The dispute settlement system, for its part, has essentially been a victim of its own success, now facing a caseload that in both number and complexity calls for more resources than what are currently available, leading to significant delays. This is now the subject of discussions between the membership and WTO officials on how to address such challenges.
Even so, the pace of the Doha Round negotiations still seem to capture the bulk of the headlines when it comes to the WTO – as well as the harshest scrutiny.
From post-Bali to post-Nairobi
After a series of high-profile collapses and setbacks, the 2013 ministerial conference in Bali, Indonesia, provided a brief reprieve from these criticisms: ministers were able to announce that they had successfully negotiated the first global trade agreement since the WTO opened its doors in 1995.
This new deal, known as the Trade Facilitation Agreement (TFA), would ease customs procedures in order to speed up trade flows, while providing developing countries with technical assistance and capacity-building in order to implement these commitments. It also achieved a notable first for WTO agreements, in that the commitments adopted by members would be linked to their capacity to implement them.
Estimates on the economic impact of the agreement have widely varied, with this year’s World Trade Report placing the annual increase in merchandise exports at US$1 trillion once in force. When that entry into force occurs, however, is yet unclear, with only 56 WTO members having ratified the agreement at press time – just under half of the number required.
A handful of other deliverables relating to agriculture and development were also announced in Bali, although these were mainly non-binding. Perhaps most notable of all, however, was a commitment by ministers to reinvigorate the Doha Round trade talks, specifically by developing a “clearly defined” post-Bali “work programme.” Ministers agreed to prioritise areas that did not yield binding outcomes at the time and directed members to resume exploring options within WTO committees and negotiating groups for those issues not addressed at the conference.
The results from Bali were widely heralded as a shot in the arm for the organisation. Now, two years later, the momentum from the 2013 ministerial has been replaced by frustration in many quarters, as trade negotiators have struggled to overcome their differences, both old and new.
Earlier this year, members had attempted to return to the toughest issues of the Doha Round – agriculture, non-agricultural market access (NAMA), services, and rules – as they worked to craft the work programme mandated in Bali. These efforts, however, were unsuccessful, after members were unable to resolve disagreement over issues such as whether to use the 2008 draft texts in agriculture and NAMA – and if so, to what extent – as well as what ambition to aim toward in time for a 31 July 2015 work programme deadline.
With such a troubled history and low expectations, what are the actual stakes for the upcoming Nairobi meeting? Will ministers be able to reach an outcome that can draw back the interest of those stakeholders who have largely written off the WTO’s negotiating function, or will the global trade body’s 162 members instead be entering uncharted waters, without a clear course to follow or significant deliverables to applaud?
Key in answering these questions, at least partially, is how members address in their planned “ministerial declaration” the Doha Round, the future work of the organisation, and so-called new issues that do not currently fall within the scope of the negotiations’ mandate.
Some major traders, such as the US, EU, and Japan, have been opposing specific language referring to the reaffirmation of the Doha ministerial declaration and subsequent ministerial outcome documents, as well as language regarding the continuation of the Doha Round, expressing an interest instead in discussing those same topics outside of that framework, together with exploring newer issues.
Meanwhile, various emerging economies and some developing countries, such as China, India, South Africa, Ecuador, Venezuela, and Indonesia, have publicly proposed language in the declaration that would include a reaffirmation of the Doha Round and the ministerial declarations and decisions taken since. Similar language has also been backed by the African Group.
New members, possible plurilateral outcomes
While most eyes will be on the multilateral discussions in Nairobi, some interesting signals could come from the “plurilateral” front. For one, a group of WTO members that has been working to expand the product coverage of the Information Technology Agreement (ITA) – a tariff-eliminating deal on various information and communication technology (ICT) goods – in order to bring it up to date with the times and commercial realities could be formally completed in Nairobi.
That group of members had already announced in July that they had reached agreement on a “product list” of over 200 goods to add to the ITA’s coverage. Since then, they have been negotiating to finalise the scheduling of the tariff phase-outs for these products, with a view to having an outcome ready to forward to ministers from that group in Nairobi.
Another tariff-cutting initiative, focusing specifically on environmental goods trade, has also been working toward reaching a finalised product list in the near-term, though sources indicate that this will not be ready in time for Nairobi and may instead be delivered at some stage in the coming year. This proposed pact, known as the Environmental Goods Agreement, was launched in the Swiss ski resort town of Davos in January 2014, with negotiations kicking off later that same year.
Two countries are also expected to be invited into the WTO during the Nairobi meeting, with both being least developed countries (LDCs). These are Afghanistan and Liberia, whose accession packages were approved ad referendum earlier this autumn.
The following set of briefings are designed to provide an overview of the negotiations that have taken place in Geneva, Switzerland, throughout 2015 in preparation for the Nairobi ministerial conference. These notes provide a brief recap of the relevant history of these negotiating areas, their respective mandates, and the state of play shortly prior to the ministerial.
This article is published under Bridges, Volume 19 - Number 42, by the ICTSD.
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African Consultations on Migration: Factoring in outcomes of the Valletta Summit
The African Consultations on Migration kicked-off on Monday, 14 December 2015. The Consultations were officially opened by Dr. Olawale I. Maiyegun, the Director of Social Affairs Department; Mr. David Clapp, the Coordinator of Sub-Regional Platform for East and Southern Africa, UNDP on behalf of the UNDG; and the Deputy Assistant Minister of Foreign Affairs of Egypt, H.E. Mohamed Ghoneim.
Dr. Maiyegun spoke about the programmes of African Union that address various migration related issues in the most comprehensive way. He underlined the AU Commission Initiative against Trafficking (AU.COMMIT) Campaign, the African Union Horn of Africa Initiative (AU-HOAI) on human trafficking and smuggling of migrants, the African Institute for Remittances (AIR), and the Labour Migration Governance for Integration and Development in Africa (also known as the Joint Labour Migration Programme-JLMP).
The general objective of the Nairobi consultations are designed to provide a forum for all 54 AU Member States and Regional Economic Communities (RECs) to discuss the Migration Agenda and identify key priority areas that require immediate action in the short and medium term within the framework of AU policies and programs and Assembly Declaration on Migration at the 25th African Union Summit in Johannesburg in June 2015, as well as other relevant instruments such as the Valletta Action Plan.
The following presentations, among others, took place on Monday: Valletta Action Plan and AU Initiatives; AU Response to Human Trafficking and smuggling of migrants from the AU COMMIT to the Horn of Africa Initiative; Boosting Intra-African Trade and Migration; Outcomes of the Valletta Summit on Migration; Study on the African Protocol on Free Movement of Persons Implementation Plan; Joint AUC/ILO/UNECA Labour Program (JLMP).
The key priorities of the Valletta Declaration and Action plan adopted during the summit have been linked with the work of AUC during AU presentations. It is worth mentioning that Action Plan also identified 16 priority projects to be implemented in 2016.
The expected outcomes from the Consultation are to:
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Agree on a set of actions at national, regional and continental levels that would give effect to or operationalize the key AU instruments, programs and decisions;
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Identify high impact projects that could be realistically implemented in 2016 in the management of migration;
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Enhance a common understanding of all available funding instruments – including the EU Trust Fund for Migration – that can be used to advance the AU migration agenda.
Senior policy officials responsible for migration issues from AU Member States, Experts from AUC, the United Nations Development Programme (UNDP), the International Organization for Migration (IOM), the International Labour Organization (ILO), UNHCR, AfDB as well as the diaspora organisations in Europe shared their insights and experiences with the participants and other independent experts.
Background
Mixed migration flows from and within Africa have become growing phenomenon occupying policy makers in and outside the continent. These flows triggered by various socio-political factors have various destinations and are characterized by their complex nature. However, it is important to note that the vast majority of African migrants still move within Africa and this dynamics has expanded significantly over the last decades with even more impressive rates within the AU RECs.
For more than a decade, the African Union Commission (AUC) has been engaged in providing policy guidance on Migration and working closely with its Member States to address critical migration issues. The various AU policy frameworks and instruments on the issue contain recommendations on how to promote the benefits of migration, improve capacity for migration management and enhance mobility on the continent as well as address the challenges of irregular migration.
As recently as the 25th AU Summit in Johannesburg, AU leaders deliberated extensively on how to effectively manage migration by committing to achieve a comprehensive range of issues by 2018, including to: speed up the implementation of continent wide visa free regimes including issuance of visas at ports of entry for Africans; expedite the operationalization of the African Passport that would as a start facilitate free movement of persons that will be issued by Member States; improve labour mobility by establishing harmonized mechanism thereby ensuring that higher education in Africa is compatible, comparable to enable recognition of credentials that will facilitate transferability of knowledge, skills and expertise; and operationalize existing action plans to combat Human trafficking and smuggling of migrants.
Key flagship programs have been introduced by the African Union to address various migration related issues in the most comprehensive way. These include:
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The ‘AU Commission Initiative against Trafficking (AU.COMMIT) Campaign’ launched in 2009: with the Ouagadougou Action Plan at the centre of its objective the campaign reached out to Member States, the Regional Economic Communities (RECs) and Civil Society Organisations in taking serious measures against combating trafficking in human beings, while encouraging all actors to use the Ouagadougou Action Plan as a reference to develop and reform their policies, laws and interventions on trafficking in human beings, especially women and children.
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Building on the AU COMMIT, the Commission established the African Union Horn of Africa Initiative (AU-HOAI) on Human trafficking and smuggling of migrants in 2014 in response to the irregular Migration flows within and from the Horn of Africa to different destinations. The initiative aims to enhance cooperation among concerned Member States and other entities in addressing the challenges of human trafficking and smuggling of migrants within and from the Horn of Africa region to destinations including the Middle East, Europe and Southern Africa. The initiative also creates a forum for cooperation among Member States in the Horn of Africa as well as other transit and destination countries.
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Within the framework of migration and development, the Commission has established the African Institute for Remittances (AIR). Launched in November 2014, the AIR will work towards reducing the transaction cost of remittances while encouraging member states and migrants to leverage remittances for socio-economic development of the continent.
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Similarly, the 24th Assembly adopted the Labour Migration Governance for Integration and Development in Africa (also known as the Joint Labour Migration Programme-JLMP). Developed with the support of ILO, IOM and UNECA, the JLMP builds on conclusions and key recommendations by Member States and RECs to facilitate implementation of relevant policy frameworks on Labour Migration and the transformational Agenda 2063 towards continental integration. The objectives and actions set out in the JLMP are designed to address the challenges of labour migration and mobility on the continent by enhancing the capacity of Member States and RECs to, among others: achieve wider elaboration, adoption and implementation of harmonized free movement regimes and coherent national labour migration policy in the RECs, and extend social security to migrants with access to portability regimes compatible, resolve skills shortages and skills–education mismatches while increasing recognition of harmonized qualifications across Africa. Enhancing mobility and free movement regimes would provide alternative legal channels of migration and help to reduce irregular migration.
The political events in some North African countries in the recent past has had an impact on the patterns of irregular migration through the Mediterranean. The resulting influx of migrants into Europe in the past months has created a heightened security oriented approach to migration in destination countries. It has also resulted in humanitarian tragedy of significant proportion with the death of thousands of young people who are trying to seek better lives. The EU Valletta Summit on Migration that took place from 11-12 November brought together 28 EU Member States and 35 African countries and 2 RECs (ECOWAS & IGAD) plus Norway and Switzerland to discuss ways of addressing the current irregular migration flows into Europe.
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Greater inclusion of women and youth in work will spur human development in Sub-Saharan Africa
Reducing inequalities and the creation of work are critical for human development in the region, says the 2015 Human Development Report.
Significant gains have been made in human development in Sub-Saharan Africa, to strengthen progress there is an urgent need to address wide inequalities and gaps in opportunities, including in work. This is a critical message in the 2015 Human Development Report launched on 14 December 2015 in Ethiopia by Ethiopian Prime Minister Hailemariam Dessalegn, the Administrator of the United Nations Development Programme (UNDP) Helen Clark, and UNDP’s Director of the Human Development Report Office, Selim Jahan.
The report, ‘Work for Human Development’, promotes sustainability and equitable and decent work for all, through encouraging governments to consider work beyond jobs – such as unpaid care, voluntary, creative work and more. Only by taking a broader view can the benefits of work be truly harnessed for human development, the report says.
Since 2000, Sub-Saharan Africa has experienced the fastest annual growth rates in the Human Development Index (HDI) among all regions – growing at an annual rate of 1.7 percent between 2000 and 2010 and 0.9 percent between 2010 and 2014. Twelve countries in the region, including Botswana, Cabo Verde, Congo, Equatorial Guinea, Gabon, Ghana, Mauritius, Namibia, Sao Tome and Principe, Seychelles, and Zambia have levels that put them in the high or medium human development group, individually. However Sub-Saharan Africa, on average, remains in the low human development category and HDI levels are still low: a shortage of good work opportunities is preventing many from reaching their full potential and making decent livelihoods.
The region’s overall official employment rate is 66 percent but 74 percent of working women and 61 percent of working men in Sub-Saharan Africa are in informal employment and nearly 25 percent of children between the ages of 5 and 14 work as child labour. Those in vulnerable work and the informal economy often lack decent work conditions and have lower earnings than other workers, the report highlights.
“Africa is experiencing higher levels of wellbeing and economic growth. Now governments must focus on better working conditions to improve lives and livelihoods, supporting the creation of jobs to sustain people and communities, and providing preconditions for greater labour participation by women and young people,” said Abdoulaye Mar Dieye, Assistant Administrator and Director of UNDP’s Regional Bureau for Africa.”
Widening inequality in work threatens human development progress
The creation of work and the expansion of choices in the region are crucial for tackling inequality, according to the 2015 report.
Sub-Saharan Africa has 500 million of people living in multidimensional poverty – that is three of every five in the region. In addition, gains in human development, especially in health and education, are more unevenly distributed in Sub-Saharan Africa than in any other region in the world, as recorded by the Inequality-adjusted HDI. The region is facing a high cohort of young people in Africa due to population growth, addressing low literacy rates and building skills can help young people secure work opportunities.
“Fast technological progress and deepening globalization are changing what work means today and how it is done,” said Selim Jahan, lead author of the report. “In a changing world, enhancing human development through work requires policy interventions. Unless action is taken, many people, particularly those already marginalized, might be left behind.”
Sub-Saharan Africa has been particularly innovative in harnessing modern technology for financial activities. Mobile phone and internet-based economic activities are likely to continue expanding, according to the report. But the region is far from achieving equitable access to these technologies: today, only one fifth of the population in Sub-Saharan has access to internet. Greater access could help provide new opportunities to youth in the region.
Services and agriculture are where many jobs in the region will be in the near future, according to the report. Expanding social safety nets, investing in teachers and health professionals, preparing youth for a high-skill job market, and supporting opportunities for collective bargaining, unemployment insurance and minimum wages are critical for protecting workers and expanding their opportunities.
Addressing gender imbalances in paid and unpaid work
According to the Gender Inequality Index, women in Sub-Saharan Africa are severely disadvantaged.
There has been progress in women’s political representation in the region – they hold more than 22 percent of seats in national parliaments, the second highest among developing regions. However, women still face glaring inequalities in healthcare access and in educational attainment.
Women also have fewer opportunities for paid work – their labour force participation rate is lower than for men (65.4 percent versus 76.6 percent) – and on average they earn 21 percent less than men. Conversely, women in the region shoulder the burden of unpaid work – typically responsible for more than three quarters of the time their households dedicate to unpaid care.
The report urges efforts to improve women’s lives by ensuring equal pay, tackling the harassment and the social norms that exclude so many women from paid work. Only then can the burden of unpaid care work be shared to help women to enter the labour force, the report suggests.
In Sub-Saharan Africa, a greater provision of care and basic services like improved water supply would reduce domestic time commitments. Investments in women’s reproductive health services are critical for informed choices, the report states.
Setting the new agenda for work
While policy responses to the new world of work will differ across countries, three main clusters of policies will be critical if governments and societies are to maximize the benefits and minimize the hardships in the evolving new world of work. Strategies are needed for creating work opportunities and ensuring workers’ well-being. The report therefore proposes a three-pronged action agenda:
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A New Social Contract between governments, society, and the private sector, to ensure that all members of society, especially those working outside the formal sector, have their needs taken into account in policy formulation.
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A Global Deal among governments to guarantee workers’ rights and benefits around the world.
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A Decent Work Agenda, encompassing all workers, that will help promote freedom of association, equity, security, and human dignity in work life.
Global Launch of 2015 Human Development Report
For the very first time, The Human Development Report is available in a unique web version.
The web version of the Human Development Report 2015: Work for Human Development contains interactive features that provide enhanced functionality and enable information sharing in our interconnected world. Access the web version here ».
Launch speeches
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UNEP launches Environment and Trade Hub to support countries in sustainable development goals implementation
Global partnership will focus on sustainable trade
The United Nations Environment Programme (UNEP) on 14 December 2015 launched the Environment and Trade Hub, an initiative which will assist countries to use sustainable trade as a vehicle for achieving the 2030 Agenda for Sustainable Development.
UNEP Executive Director Mr. Steiner said, “UNEP is already working directly with many governments and other stakeholders to implement an inclusive green economy in countries across all continents.
“The Hub holds enormous potential to build on this experience and help unlock the true capabilities of developing countries, using trade as a motor for sustainable development and environmental protection, and benefitting every single one of us.”
The Hub was formally launched at an event on the sidelines of the World Trade Organization’s (WTO) 10th Ministerial Conference in Nairobi. UNEP co-hosted the plenary session entitled “Trade and the 2030 Sustainable Development Agenda” with the International Centre for Trade and Sustainable Development (ICTSD) at the opening of ICTSD’s Trade and Development Symposium.
Trade is a key means of implementation for the Sustainable Development Goals (SDGs) and Mr. Steiner underlined the many ways in which cross-border trade, not to mention investment, now drive global economic growth.
Sustainable trade can impact positively on goals across the board, in areas such as food security and sustainable agriculture, sustainable management of water and sanitation, access to modern energy, and mitigating and adapting to climate change.
“We need to ensure that the 2030 Agenda for Sustainable Development, including the SDGs and the Financing for Development Action Agenda, are fully incorporated into national trade policies and trade agreements that are negotiated at bilateral, regional and international levels,” said Mr. Steiner.
Many countries are unable to make effective use of international markets, gain access to sustainable global value chains to equitably grow their economies, and attract overseas investment to build modern, sustainable industries and contribute to global value chains. African countries, for example, account for less than 2 per cent of international trade.
Countries need support to change this – not only from UNEP and other international organizations, but from multiple partners around the world dedicated to working with countries to build their capacity to engage in sustainable trade.
The Hub aims to enhance the capacity of countries to design and implement trade policies that foster environmental sustainability and human well-being; to assist countries in the realization of trade opportunities arising from a transition to greener economies; to strengthen the sustainability aspects of cross-border trade and investment agreements in negotiations; and to realize a shift of trade practices and trends to more sustainable pathways.
The Hub offers:
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Capacity building services for developing countries such as tailored technical trainings to support international, regional and national design and implementation of sustainable trade and investment policies;
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Targeted stakeholder trainings; technical assistance in designing trade and environment related agreements; development of tools, methodologies and indicators for sustainable trade;
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Identification and dissemination of best practices; support to stakeholder consultations and national, regional, and international dialogues on advancing sustainable trade;
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The identification of sector- or region-specific sustainable production and trade opportunities.
» Visit the UNEP Environment and Trade Hub
About
The UNEP Environment and Trade Hub is a demand-driven mechanism offering capacity building and related policy advice on sustainable trade and investment. Through its Hub, UNEP as the leading global environmental authority offers to assist countries in their capacity building towards using sustainable trade as a driver for achieving the 2030 Agenda.
By working through a network of national, regional, and international partners, the Hub is able to offer interdisciplinary services that are tailored to local needs and circumstances while being delivered in an effective and demand-oriented manner. The specific objectives of the Hub are to:
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Enhance capacity of countries to design and implement trade policies that foster environmental sustainability and human well-being;
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Assist countries in the realization of trade opportunities arising from a transition to greener economies;
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Strengthen the sustainability aspects of cross-border trade and investment agreements in bilateral, plurilateral and multilateral negotiations;
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Realize a shift of trade practices and trends to more sustainable patterns.
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AfDB launches Development Effectiveness Review on Sierra Leone
Sierra Leone recognized as a success story among states emerging from conflict, but underlying drivers of fragility still remain
The African Development Bank (AfDB) launched its Development Effectiveness Review 2015 on Sierra Leone on Wednesday, December 9, 2015 in Freetown. The Development Effectiveness Review 2015 for Sierra Leone provides a comprehensive report on the Bank’s performance in the country and tracks how the Bank’s operations have contributed to Sierra Leone’s development results. The review also assesses how the Bank has performed as an organisation with a presence in Sierra Leone.
The publication shows Sierra Leone’s achievements over its post-conflict transition. “Sierra Leone is a success story among states emerging from serious conflict. Since the conflict ended in 2002, it has successfully embarked on a peace-building and state-building agenda, re-establishing democratic government and institutions, conducting three successful elections and managing peaceful political transitions,” said Janvier Litse, AfDB Acting Vice-President of Operations, in charge of Country and Regional Programs.
Sierra Leone’s economic growth over the past five years has been remarkable, averaging 8% and reaching 20.1% in 2013. Over the past ten years, the poverty ratio has fallen from 66% to 53% – an important result, but one that masks significant inequality between urban and rural areas. Unfortunately, the Ebola Virus Disease outbreak and the dramatic fall in iron ore prices have reversed this positive growth trajectory with a 21.5% contraction of economic output anticipated in 2015.
The Bank has supported Sierra Leone’s national priorities of promoting peace, stability and economic development in the years since the civil war. The country programme was put on hold during the conflict from 1991 to 2002, but since the end of the conflict, the Bank has supported Sierra Leone in its journey of recovery, helping to rebuild state institutions, restore basic services and promote growth and employment. Overall, AfDB has contributed US $350 million in grants and concessional lending between 2005 and 2014. This year, the Bank responded quickly and flexibly to the Ebola crisis, providing $60 million as part of a wider regional package of US $223 million.
Sierra Leone has made remarkable progress in consolidating a peaceful democracy and moving from post-war humanitarian support and reconstruction towards laying the foundation for long-term inclusive growth. However, serious drivers of fragility still remain. The Bank remains committed to supporting Sierra Leone’s post-Ebola recovery and building the country’s resilience, to help it achieve the ambitious goal of becoming a middle-income country by 2035 as set out in the Government’s Agenda for Prosperity.
The report launch was hosted by the Bank’s Resident Representative in Sierra Leone, Yero Baldeh, and included a keynote address by Sierra Leone’s Minister of Finance and Economic Development, Kaifala Marah.
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G-33 Ministerial Communiqué: Nairobi, December 2015
1. We, Ministers and Representatives of the G-33 Members met in Nairobi, Kenya, on 14 December 2015, on the occasion of the 10th WTO Ministerial Conference to assess the current state of play of the agriculture talks and exchange views on future course of actions for a comprehensive conclusion of the Doha Development Agenda (DDA).
2. We welcome the 10th WTO Ministerial Conference as an important opportunity to renew the collective commitment of all WTO Members to a robust, fair, and predictable rules-based multilateral trading system. We express our sincere appreciation to the Government and people of Kenya for their hospitality and excellent work in hosting this Conference.
3. We reiterate the importance of agriculture for ensuring food security, livelihood security, and rural development in developing Members including Least-Developed Countries (LDCs) and Small, Vulnerable Economies (SVEs) as enshrined in Doha and Hong Kong mandates. We emphasize the need for taking into consideration of the development component of the agriculture negotiations and the importance of delivering on the on-going reform in agriculture and the completion of the DDA including the elimination of global trade distortions that hinder productivity and competitiveness of hundreds of millions of poor farmers in the developing world.
4. In the face of increased volatility of food productions and prices on the global market since the food and financial crises in 2008, we underline the importance of protecting the small and resource-poor producers from market volatilities through public stockholding for food security purposes and Special Safeguard Mechanism (SSM) in the developing country Members’ food security, livelihood security and rural development strategy. We also urge members to remain cognizant of the subsistence nature of agriculture in most developing country Members including LDCs and SVEs.
Nairobi Deliverables
5. We recognize the Members’ collective resolve to advance negotiations where concrete progress can be achieved including focusing on elements of the DDA and with a view to achieve an outcome that would among others rectify some of the gross imbalances in the existing WTO rules on agriculture. To this end, the G-33 is making its utmost efforts through its active engagement and proposals on SSM, as part of its quest for an effective tool agreeable for all Members in the context of achieving meaningful, development-centered balanced and credible deliverables of MC10.
The G-33 also remains committed to implement the Bali Ministerial Decision of 7 December 2013 on Public Stockholding for Food Security Purposes (WT/MIN(13)/38-WT/L/913) by putting forward a proposal on this issue with a view to engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution by December 2015 as mandated by the General Council Decision WT/L/939, dated 27 November 2014. We underline that any permanent solution should cover the current and future programs of developing country Members.
6. We recognize the Members’ engagement in discussing the G-33 proposals on SSM and on public stockholding for food security purposes. While we fully respect each Member’s rights and positions in the negotiation, we express our deep disappointment that in the Geneva process, Members failed to make meaningful progress for convergence, despite all the constructive engagement and flexibilities that have been demonstrated by the G-33 members. We, thus, strongly urge Members to find ways to address the impasse, based on the Doha Ministerial Declaration and subsequent Declarations and Decisions thereafter. Any political will to resolve the impasse must be reflected through flexibilities in the negotiations. All the WTO Members must be cognizant of the the negative impact of failure to deliver concrete outcomes in Nairobi on the credibility of the WTO as the negotiating forum for multilateral trade rules that could address development challenges faced by developing country Members.
7. We reiterate the importance of maintaining special and differential treatment in the areas of export competition. Negotiations in this area should be conducted by taking into account the need for balanced, development-centered and credible outcomes in Nairobi.
Post Nairobi and the G-33
8. We are of the view that WTO Members shall continue seeking a comprehensive conclusion of the DDA after Nairobi. We underline that the special and differential treatment for developing country Members including LDCs and SVEs in the agriculture negotiations must be operationally effective to enable them to effectively take account of their development needs. We urge Members to continue discussing critical tools for addressing food security, livelihood security and rural development concerns in the Post-Nairobi works. We, therefore, commit ourselves and strongly urge other WTO Members to continue delivering the DDA in the area of agriculture based on the Draft Agriculture Modalities of December 2008.
9. In the broader Doha agricultural reform, we call Members to resume negotiation on the domestic support and market access pillars and continue to seek a level playing field in global agricultural trade. We underscore the need to secure Special Products (SP) for developing country Members whenever discussions on tariff reduction on agriculture products resume in the market access pillar.
10. The G-33 shall remain resilient and a dynamic group representing the evolving needs of the hundreds of millions of subsistence farmers in the developing world. Thus, we reaffirm our critical and the complementary role in facilitating and ensuring that the global agricultural reform are attuned to needs of all developing country Members as well as in establishing a strong, fair, and market oriented rules-based multilateral trading framework through meaningful and effective special and differential treatment for the food security, livelihood security and rural development of the developing world. We are open to explore future cooperation on other areas in WTO agriculture negotiations where group Members see common interests and shared objectives.
11. Finally, we renew our commitment to engage actively and constructively in the negotiations, with the aim of addressing the remaining DDA issues. In doing so, we will continue to respect the Doha mandate and its development dimension.
Nairobi, 14 December 2015
Members of the G-33 are Antigua and Barbuda, Barbados, Belize, Benin, Botswana, Plurinational State of Bolivia, China, Côte d’Ivoire, Congo, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, India, Indonesia, Jamaica, Kenya, Republic of Korea, Madagascar, Mauritius, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, the Philippines, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Suriname, Chinese Taipei, Tanzania, Trinidad and Tobago, Turkey, Uganda, Bolivarian Republic of Venezuela, Zambia and Zimbabwe.
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Enhancing the contribution of Export Processing Zones to the Sustainable Development Goals
An analysis of 100 EPZs and a Framework for Sustainable Economic Zones
Over the past decade, the popularity of Export Processing Zones (EPZs) has grown in many countries across the global south. There are now over 4,000 EPZs, which is over 3,000 more than 20 years ago. Some countries have made the promotion of such zones central to their economic development strategies, while others have questioned their contribution to national development. Meanwhile, the increasing implementation of international trade rules mean that some of the traditional incentives for EPZs, such as tax breaks for exports, are no longer in line with WTO rules. In that context EPZs, also called Special Economic Zones (SEZs), need to innovate new means of maintaining and developing their competitiveness.
Factory collapses and fires, worker unrest and pollution-related industrial tragedies in developing countries provide stark reminders of the need for high standards of environmental and worker protections around the world, and for multinational enterprise (MNEs) to exercise corporate social responsibility (CSR) throughout their supply chains. In a rapidly changing global marketplace, how can EPZs located in developing countries best position themselves to remain attractive and relevant over the longer term to MNEs and their suppliers?
Building on UNCTAD’s recognition of the role of EPZs in the World Investment Report of 2013, this report explores the proposition that EPZs positioned and structured as centres of excellence and innovation both in terms of conventional commercial performance, and also with respect to performance in support of environmental and social objectives, may respond better to the evolving global marketplace.
This work fits into the broader context of the launch of the Sustainable Development Goals (SDGs) and UNCTAD’s Investment Policy Framework for Sustainable Development. Across a wide range of investment promotion practices, a new generation of policies is emerging that pursues a broader and more intricate development policy agenda, while building or maintaining a generally favourable investment climate. “New generation” investment policies place inclusive growth and sustainable development at the heart of efforts to attract and benefit from investment. In this context, the present report is intended to stimulate further discussion and exploration of the proposition that a “new generation” of EPZ policies could viably reposition EPZs as centres of excellence in corporate sustainability, attracting investment and contributing to the SDGs.
Key messages
This exploratory report suggests that changes taking place in the global market mean that Export Processing Zones (EPZs), and Special Economic Zones (SEZs) more generally, can be restructured as centres of excellence for sustainable development. Such restructuring would increase the appeal of EPZs to multinational enterprises (MNEs) and their suppliers, while simultaneously contributing to the implementation of the Sustainable Development Goals (SDGs), also known as ‘Global Goals’.
The report argues:
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EPZs face a strategic challenge as traditional tax incentives for attracting companies into zones become incompatible with international trade law and exemptions for developing countries expire.
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EPZs can enhance competitiveness through a ‘role reversal’: switching from a narrow focus on cost advantages and lower standards to become champions of sustainable business. EPZs can find new grounds for competitiveness through meeting the growing expectations on MNEs and their suppliers to exercise good social and environmental practices. “Next generation” EPZs can gain a competitive advantage by not only providing conventional commercial benefits (such as modern infrastructure and expedited permitting), but by also providing cost-effective support for good environmental and social practices for firms operating within their boundaries.
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Although some EPZs are making the transition to more of a sustainable development orientation (demonstrating proof of concept), an UNCTAD survey of 100 EPZs’ public information undertaken as part of this report suggests that most EPZs are not promoting prominent environmental and social features. Given changes to conventional means of attracting investment into EPZs, this lack of engagement with corporate sustainability could become a missed opportunity for both sustainable development and for EPZ investment promotion.
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EPZ management agencies can develop services to help firms’ cost-effective compliance with international Corporate Social Responsibility (CSR) standards, including provision of training and monitoring, as well as health, safety and waste management services to enable a circular economy.
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Governments and investment promotion strategies should promote competitiveness through enabling efficient performance on all issues that matter to business success, including economic, social and environmental issues, rather than exempting zones from their own national laws on labour practices or the environment. They could require zones to promote economic linkages with their wider economies of host countries and assess progress towards that aim.
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EPZs operating as centres of excellence for sustainable development could act as pilot projects. Lessons learned from these “Sustainable Economic Zones” could be applied and scaled up by developing country governments at a regional and national level. This can be part of the development of backward and forward linkages to the wider economy so that zones are catalysts of wider development. In that way, EPZs could play a catalytic role in helping nations achieve, inter alia, SDG 8, on employment and decent work, 9, on sustainable production, and 12, on sustainable industrialization.
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A ‘Framework for Sustainable Economic Zones’ is offered to guide consideration of EPZ standards, infrastructure and administrative assistance to enhance sustainability performance.
Key elements for promoting sustainable EPZs
![Fig 2](http://unctad.org/en/NewsImages/webdiaepcb2015d5_fig2.gif)
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tralac’s Daily News selection: 14 December 2015
The selection: Monday, 14 December
MC10: a compendium of resources, news items, commentaries
Official websites: Kenya MC10, WTO
Twitter: @MC10Nairobi
tralac's MC10 Resource Box
tralac is hosting a session at TDSNairobi on the Continental Free Trade Area
UNCTAD side events: a listing, background documentation
Profiled MC10 news items: Push for good deal at WTO, Kituyi tells African ministers (The Standard), Africa’s trade issues off agenda, less divisive items remain (The East African), What Africa ought to target at WTO talks in Nairobi (Business Daily), G-33 demands outcome on special safeguards (Livemint), WTO failure to adapt to trade shifts could hamper Nairobi talks (Bloomberg), Nairobi meeting faces questions on WTO’s ability to deliver deals (Livemint)
Profiled MC10 commentaries: 'The WTO turns 20, but will it make it to 30?' (15 Initiative), 'Leveraging trade for development - an agenda for the Nairobi WTO Ministerial' (ECIPE)
Deepening the US-Africa trade and investment relationship: comments invited (USTR)
USTR invites written comments and/or oral testimony of interested persons on issues including, but not limited to, the following: (a) why a deeper trade and investment relationship is critical both for African growth and for U.S. interests; (b) which trade and investment policy areas should serve as building blocks to deepen this relationship; (c) what goals should the US and African partners establish with respect to each building block; and (d) what mechanisms and approaches could be used to best achieve these goals. Written comments must be received no later than 11:59 p.m., Tuesday, January 19, 2016.
Addis set to host US-Africa February 2016 business summit
America's security deficit: addressing the imbalance between strategy and resources in a turbulent world (RAND Corporation)
Africa is auto’s final frontier (IOL)
When Nigeria first unveiled incentives for carmakers to set up plants, its auto industry had ground to a standstill. Fast forward two years, and there are at least 36 automakers with production licenses in the continent’s biggest economy, with Volkswagen, Nissan Motor and Ford Motor already making vehicles with local partners. The country is seeking to join South Africa as the only manufacturing base for the car industry in sub-Saharan Africa, with countries from Ethiopia to Uganda hoping to follow suit. Vehicle ownership on the continent is estimated by the International Organisation of Motor Vehicle Manufacturers at less than 50 per 1 000 people, compared with about 800 in the US.
Namibia and beneficiation policy issues: two perspectives
Fading viability of beneficiation (Insight)
Government’s dream of stimulating local beneficiation of minerals might take even longer to materialise as there is still no policy in place. And a team of foreign experts has apparently compiled yet another study on the economic viability of further processing of minerals in Namibia. This time dimension stone, fluorspar, graphite, manganese, phosphates, salt and silica sand were looked at. The first study of 2014 focussed on copper, gold, iron ore, diamonds, lead, uranium and zinc. The Ministry Trade and Industry commissioned London-based SNL Metals & Mining to carry out the second study, which was completed early this year.
Roman Grynberg: 'After the diamond omungong - now what?' (The Namibian)
Namibia, like Botswana and South Africa, all want to "beneficiate" their diamonds as well as base metals. But the problem is that the middle of the value chain whether it is diamonds or copper, is controlled by India and China. In both diamonds and copper, these producers have squeezed the margins so hard there is no room for anything other than cost effective efficiency.
Mozambique’s new industrial strategy: update (Club of Mozambique)
Industries prioritised in the new Policy and Industrial Strategy (PEI) include food and agribusiness, clothing, textiles and footwear, non-metallic minerals, wood and furniture manufacturing, chemicals, metal product manufacturing and drinks. Achieving the new PEI industrial sector goals will entail the implementation of a transport and communications infrastructure program to ensure the integrated development of industrial zones. The proposed revision of the PEI notes that the country does not have an integrated development strategy, lacks infrastructure and depends on imported raw materials. High operating costs, irregular water and electricity supply and difficulties in supplies of raw materials are other constraints.
Mozal Aluminium again considered the largest company in Mozambique (MacauHub)
In addition to Mozal Aluminium, re-elected as the largest company, the report points to the Mozambican subsidiary of South African group Grindrod as the best company in the country, with a growth of 43.14% between 2013 and last year. The 100 largest companies in the country account for 26% of GDP, according to the report by KPMG, one of the main auditing firms operating in Mozambique.
Illicit financial flows cost Zimbabwe $500m (The Herald)
Illicit financial flows have this year cost Zimbabwe more than $500m, which is enough to buy about over half of the season’s supply of grain for the country. Zimbabwe requires about 1,8 million tonnes of maize annually at a total cost of about $702m at the Grain Marketing Board. Reserve Bank of Zimbabwe governor Dr John Mangudya said authorities are dealing with the cancer. He said some companies are taking advantage of the opening up of the exchange controls to drain money out of the country. “That shows lack of confidence. How can you be confident that you love to live in Zimbabwe without your money? “So you send your money to Mauritius, China or Pakistan or other parts of the world but your business is in Zimbabwe,” he said.
Namibia and SADC's FIP: 'Anti-money laundering – substantial progress made' (New Era)
Addressing the illicit trade in Africa’s natural resources: 'illicit trade in African oil' consultancy (AfBD)
The economic power of tourism: World Bank forum update
Travel and tourism accounts for about 10% of global GDP, generates one out of eleven jobs worldwide (about 277 million total), and is an increasingly vital component of developing economies. “In Kenya, tourism produces 14% of national economic output and 12% of total employment,” World Bank Group President Jim Yong Kim said in remarks opening the forum. “In 2013, tourists spent $413bn in developing countries, about three times the amount of official development assistance that year. In 2015, for the first time in history, more people will travel to the developing world than to the developed world - about 550 million people overall.”
Tourism players, media warn Kenya and Tanzania over tug of war (The Standard)
Ethiopia is welcoming the investors Kenya has frustrated (Daily Nation)
Kenya: Urgent policy shift needed to create jobs says Mwiria (Daily Nation)
EAC states move to harmonise fisheries development policies (New Times)
The draft policy seeks to promote co-operation regarding fisheries management in transboundary waters, and ensure traceability, quality and safety of traded fish and fishery products, and reduce illegal unreported and unregulated fishing across borders. It also aims to promote the development of responsible aquaculture, enhance coherence in policy implementation with linkage to African Union fisheries policy framework, as well as ensure accurate and regular update of fisheries data, and advocate for improved governance.
Identifying policy synergies on aid for fisheries and food security (The Fish Site)
African Union hails ECJ annulment of EU-Morocco trade deal over Western Sahara (AU)
Document de stratégie d’intégration régionale pour l’Afrique centrale (AfDB)
ILO: draft report of the 13th African Regional Meeting
COP21 Summit - selected postings: Historic Paris agreement on climate change (UNFCC), UN chief hails new climate change agreement as 'monumental triumph' (UN), Shock waves: managing the impacts of climate change on poverty (World Bank)
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Historic Paris Agreement on Climate Change
195 nations set path to keep temperature rise well below 2 degrees Celsius
An historic agreement to combat climate change and unleash actions and investment towards a low carbon, resilient and sustainable future was agreed by 195 nations in Paris on 12 December 2015.
The Paris Agreement for the first time brings all nations into a common cause based on their historic, current and future responsibilities.
The universal agreement’s main aim is to keep a global temperature rise this century well below 2 degrees Celsius and to drive efforts to limit the temperature increase even further to 1.5 degrees Celsius above pre-industrial levels.
The 1.5 degree Celsius limit is a significantly safer defense line against the worst impacts of a changing climate. Additionally, the agreement aims to strengthen the ability to deal with the impacts of climate change.
To reach these ambitious and important goals, appropriate financial flows will be put in place, thus making stronger action by developing countries and the most vulnerable possible, in line with their own national objectives.
“The Paris Agreement allows each delegation and group of countries to go back home with their heads held high. Our collective effort is worth more than the sum of our individual effort. Our responsibility to history is immense,” said Laurent Fabius, President of the COP 21 UN Climate change conference and French Foreign Minister.
The minister, his emotion showing as delegates started to rise to their feet, brought the final gavel down on the agreement to open and sustained acclamation across the plenary hall.
French President Francois Hollande told the assembled delegates: “You’ve done it, reached an ambitious agreement, a binding agreement, a universal agreement. Never will I be able to express more gratitude to a conference. You can be proud to stand before your children and grandchildren.”
UN Secretary General Ban Ki-moon said: “We have entered a new era of global cooperation on one of the most complex issues ever to confront humanity. For the first time, every country in the world has pledged to curb emissions, strengthen resilience and join in common cause to take common climate action. This is a resounding success for multilateralism.”
Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), said: “One planet, one chance to get it right and we did it in Paris. We have made history together. It is an agreement of conviction. It is an agreement of solidarity with the most vulnerable. It is an agreement of long-term vision, for we have to turn this agreement into an engine of safe growth.”
“Successive generations will, I am sure, mark the 12 December 2015 as a date when cooperation, vision, responsibility, a shared humanity and a care for our world took centre stage,” she said.
“I would like to acknowledge the determination, diplomacy and effort that the Government of France have injected into this remarkable moment and the governments that have supported our shared ambition since COP 17 in Durban, South Africa,” she said.
Agreement Captures Essential Elements to Drive Action Forward
The Paris Agreement and the outcomes of the UN climate conference (COP21) cover all the crucial areas identified as essential for a landmark conclusion:
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Mitigation – reducing emissions fast enough to achieve the temperature goal
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A transparency system and global stock-take – accounting for climate action
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Adaptation – strengthening ability of countries to deal with climate impacts
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Loss and damage – strengthening ability to recover from climate impacts
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Support – including finance, for nations to build clean, resilient futures
As well as setting a long-term direction, countries will peak their emissions as soon as possible and continue to submit national climate action plans that detail their future objectives to address climate change.
This builds on the momentum of the unprecedented effort which has so far seen 188 countries contribute climate action plans to the new agreement, which will dramatically slow the pace of global greenhouse gas emissions.
The new agreement also establishes the principle that future national plans will be no less ambitious than existing ones, which means these 188 climate action plans provide a firm floor and foundation for higher ambition.
Countries will submit updated climate plans – called nationally determined contributions (NDCs) – every five years, thereby steadily increasing their ambition in the long-term.
Climate action will also be taken forward in the period before 2020. Countries will continue to engage in a process on mitigation opportunities and will put added focus on adaptation opportunities. Additionally, they will work to define a clear roadmap on ratcheting up climate finance to USD 100 billion by 2020
This is further underlined by the agreement’s robust transparency and accounting system, which will provide clarity on countries’ implementation efforts, with flexibility for countries’ differing capabilities.
“The Paris Agreement also sends a powerful signal to the many thousands of cities, regions, businesses and citizens across the world already committed to climate action that their vision of a low-carbon, resilient future is now the chosen course for humanity this century,” said Ms Figueres.
Agreement Strengthens Support to Developing Nations
The Paris Agreement underwrites adequate support to developing nations and establishes a global goal to significantly strengthen adaptation to climate change through support and international cooperation.
The already broad and ambitious efforts of developing countries to build their own clean, climate-resilient futures will be supported by scaled-up finance from developed countries and voluntary contributions from other countries.
Governments decided that they will work to define a clear roadmap on ratcheting up climate finance to USD 100 billion by 2020 while also before 2025 setting a new goal on the provision of finance from the USD 100 billion floor.
Ms. Figueres said: “We have seen unparalleled announcements of financial support for both mitigation and adaptation from a multitude of sources both before and during the COP. Under the Paris Agreement, the provision of finance from multiple sources will clearly be taken to a new level, which is of critical importance to the most vulnerable.”
International cooperation on climate-safe technologies and building capacity in the developing world to address climate change are also significantly strengthened under the new agreement.
Signing the Paris Agreement
Following the adoption of the Paris Agreement by the COP (Conference of the Parties), it will be deposited at the UN in New York and be opened for one year for signature on 22 April 2016 – Mother Earth Day.
The agreement will enter into force after 55 countries that account for at least 55% of global emissions have deposited their instruments of ratification.
Cities and Provinces to Companies and Investors Aligning
Saturday’s landmark agreement was reached against the backdrop of a remarkable groundswell of climate action by cities and regions, business and civil society.
During the week of events under the Lima to Paris Action Agenda (LPAA) at the COP, the groundswell of action by these stakeholders successfully demonstrated the powerful and irreversible course of existing climate action.
Countries at COP 21 recognised the enormous importance of these initiatives, calling for the continuation and scaling up of these actions which are entered on the UN-hosted NAZCA portal as an essential part in the rapid implementation of the Paris Agreement.
The LPAA and NAZCA have already captured climate actions and pledges covering:
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Over 7,000 cities, including the most vulnerable to climate change, from over 100 countries with a combined population with one and a quarter billion people and around 32% of global GDP.
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Sub-national states and regions comprising one fifth of total global land area and combined GDP of $12.5 trillion.
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Over 5,000 companies from more than 90 countries that together represent the majority of global market capitalisation and over $38 trillion in revenue.
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Nearly 500 investors with total assets under management of over $25 trillion
Christiana Figueres said: “The recognition of actions by businesses, investors, cities and regions is one of the key outcomes of COP 21. Together with the LPAA, the groundswell of action shows that the world is on an inevitable path toward a properly sustainable, low-carbon world.”
More Details on the Paris Agreement
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All countries will submit adaptation communications, in which they may detail their adaptation priorities, support needs and plans. Developing countries will receive increased support for adaptation actions and the adequacy of this support will be assessed.
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The existing Warsaw International Mechanism on Loss and Damage will be significantly strengthened.
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The agreement includes a robust transparency framework for both action and support. The framework will provide clarity on countries’ mitigation and adaptation actions, as well as the provision of support. At the same time, it recognizes that Least Developed Countries and Small Island Developing States have special circumstances.
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The agreement includes a global stocktake starting in 2023 to assess the collective progress towards the goals of the agreement. The stocktake will be done every five years.
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The agreement includes a compliance mechanism, overseen by a committee of experts that operates in a non-punitive way.
The COP also closed on a number of technical issues.
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Under the Kyoto Protocol, there is now a clear and transparent accounting method for carry-over credits for the second commitment period, creating a clear set of rules.
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The first round of international assessment and review process (IAR) that was launched in 2014 was successfully completed.
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A number of technical and implementation issues related to the existing arrangements on technology, adaptation, action for climate empowerment and capacity building were also successfully concluded.
About the UNFCCC
With 196 Parties, the United Nations Framework Convention on Climate Change (UNFCCC) has near universal membership and is the parent treaty of the 1997 Kyoto Protocol. The Kyoto Protocol has been ratified by 192 of the UNFCCC Parties. The ultimate objective of both treaties is to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system.
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Key Statistics and Trends in International Trade and Trade Policy 2015
Key Statistics and Trends in International Trade 2015
As of 2014 the trends in international trade were largely driven by the sluggish economic growth and the persisting economic and political turmoil in various part of the world. From 2011 to 2014 world trade grew at a rate of less than 2 per cent per year, notably slower than in the pre-recession period. World trade has further slowed down during the last year with only marginal growth and mostly related to an increase in the trade of services.
The trade slowdown has affected all geographic regions, but by varying degrees. In general, while trade flows among major economies have continued to increase, albeit at a very low pace, trade relating to smaller countries has been generally stagnant and has often shrunk. South-South trade performance has also been anemic, except for trade relating to East Asia and in particular China. In terms of export performance, countries in East Asia, Central America and East Africa generally fared better than their peers. At the sectoral level, trade in manufacturing has grown relatively faster than agriculture since 2011. During the same period, the value of trade in natural resources has declined. Similarly, trade growth in consumer products has outperformed growth in intermediates and in primary products.
This report is structured in three parts. The first part presents an analysis of the extent, causes and implications of the ongoing trade slowdown. The second part provides illustrative statistics on international trade in goods and services covering the last 10 years. Trade statistics are provided at various levels of aggregation illustrating the evolution of trade across economic sectors and geographic regions. The third part of this report presents some of the most commonly used trade indicators at the country level, so as to illustrate trade performance across countries.
The Trade Slowdown
One of the stylized facts of the last few decades is that international trade has been growing at a very fast pace. Driven by favorable policies, technological innovation and business models bringing down the costs of cross-border transactions, international trade in goods and services added about 20 trillion US$ during the last 25 years, going from about 4 trillion US$ in 1990 to about 24 trillion US$ in 2014. Such expansion in world trade was both the result of sustained economic growth and of the strong increase in economic interdependence among countries. The consequence is that world trade increased at a much faster pace than global output or gross world product (GWP) going from about 20 percent of GWP in the early 1990s to more than 30 percent nowadays. This statistic possibly represents the clearest indicator of the globalization process experienced by the world economy in the last few decades.
The trade slowdown of the last three years has been widespread across most of the developing and developed countries. Average trade growth rates for
all regions are now very low and just a fraction of what they were in the pre-crisis period. Among developing countries the trade slowdown reached all regions including the Asian powerhouses as well as more peripheral regions such as Sub-Saharan Africa. Trade growth rates have been generally negative for the Transition Economies and on average close to zero for South Asia and Sub-Saharan Africa. The weak trade performance is reflected in the much lower trade elasticities for all regions. For instance, while trade was growing 60 percent faster than GDP in East Asia before the recession, it grew 40 percent slower than GDP after 2011. Latin America is the only region where trade outpaced GDP growth in the post-crisis period, although at a substantially lower rate.
» Download: Key Statistics and Trends in International Trade 2015 (PDF, 3.2 MB)
Key Statistics and Trends in Trade Policy 2015
In focus: Preferential Trade Agreements
During the last decade international trade has been characterized by a progressive shift in the use of trade policy instruments. While tariff protection remains an important instrument only in certain sectors and/or for a limited number of countries, the use of other, non-tariff trade restrictive, measures has become more widespread. The years after the latest global economic and financial crisis have also been characterized by movements in the exchange rates and episodes of competitive devaluation, which have had important repercussions on international trade flows.
As of 2014, around one-third of world trade was free under most-favoured-nation (MFN) regimes, with an additional third exempt from tariffs due to preferential access. Still, tariffs remain relatively high and tariff peaks continue to affect important sectors, including some of key interest to low income countries such as agriculture, apparel, textiles and leather products. Tariffs also remain quite restrictive for most South-South trade.
International trade is increasingly regulated and influenced by a wide array of policies and instruments reaching beyond tariffs. Technical measures and requirements regulate about two-thirds of world trade, while various forms of sanitary and phytosanitary measures (SPS) are applied to almost the totality of agricultural trade. The past few years have also seen a general increase in the use of trade defence measures within the WTO framework.
In spite of the economic crisis, the process of deeper economic integration has remained strong at a regional and bilateral level, with an increasing number of preferential trade agreements (PTAs) being negotiated and implemented. PTAs increasingly address not only goods but also services and often deal with rules beyond reciprocal tariff concessions to cover a wide range of behind the border issues. One effect of the proliferation of PTAs is that they distort international competitiveness by providing different trading partners with different market access conditions. This has repercussions for many lower income countries as their preferential margins erode and their competitiveness in international markets declines.
The economic turbulence of recent years has been reflected in exchange rate markets, both for developing and developed countries’ currencies. Exchange rate movements are playing an important role in shaping international trade in the post crisis period, as they have influenced countries’ external competitiveness.
This report is structured in two parts. The first part presents an overview of the extent, causes and implications the proliferation of preferential trade agreement. The second part provides illustrative statistics on trade policy instruments. The second part is divided in five chapters: tariffs, trade agreements, non-tariff measures, trade defence measures, and exchange rates. Trade statistics are provided at various levels of
aggregation illustrating the use of the trade policy measures across economic sectors and geographic regions.
» Download: Key Statistics and Trends in Trade Policy 2015 (PDF, 5.69 MB)
Key Statistics and Trends in International Trade 2015 and Key Statistics and Trends in Trade Policy 2015 are the third edition of a series initiated in 2013. The reports are a product of the Trade Analysis Branch (TAB), Division on International Trade in Goods and Services, and Commodities (DITC), UNCTAD Secretariat. The series is part of a larger effort by UNCTAD to analyze trade-related issues of particular importance for developing countries, as requested by the Doha Mandate of UNCTAD XIII.
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UNCTAD events on the margins of the 10th WTO Ministerial Conference in Nairobi
In partnership with the Government of Kenya, UNCTAD has organized a series of high-level events on the margins of the 10th Ministerial Conference of the World Trade Organization (MC10) in Nairobi.
The African Union Commission, the Commonwealth Secretariat and the World Free Zones Organization will also partner in some of the events.
These events will bring together leading voices of the international trade community and serve as a conduit for enriching debates on relevant trade and development issues.
A selection of background documents prepared by UNCTAD are summarised below. Additional documents may be downloaded here.
The Continental Free Trade Area: making it work for Africa
In June 2015, at the 25th Summit of the African Union (AU) held in South Africa, African Heads of Government agreed to the creation of the Continental Free Trade Area (CFTA) by 2017 through negotiations on liberalization of trade in goods and in services.
The initiative presents major challenges as well as opportunities to boost intra-African trade. While strengthening the multilateral trading system remains vital, a parallel negotiating process to expeditiously launch the CFTA and monitor the implementation of the agreement is also important. Also in order to multiply the benefits of the CFTA and promote development regionalism in Africa, a comprehensive vision of trade and development needs to be in place.
Expanded markets for African goods and services, unobstructed factor movement, and reallocation of resources should promote economic diversification, structural transformation, technological development and enhancement of human capital.
The CFTA must be ambitious in dismantling barriers and reducing costs to intra-African trade, and improving productivity and competitiveness. The intraregional trade liberalization needs to be contextualized in a broader developmental framework that will provide benefits in terms of realizing Africa’s Agenda 2063 and the UN 2030 Agenda for Sustainable Development.
Development oriented regionalism will contribute spearheading Africa’s achievement of development goal, build resilience to external financial and economic crises, and foster inclusive growth. It would have spill-over benefits in terms of helping foster peace, security and political stability in the continent.
UNCTAD, working in partnership with the African Union Commission, African States and other development partners is committed to supporting the attainment of these objectives embodied under the CFTA.
» The Continental Free Trade Area: making it work for Africa (PDF, 297 KB)
Enhancing the Contribution of Export Processing Zones to the Sustainable Development Goals
Over the past decade, the popularity of Export Processing Zones (EPZs) has grown in many countries across the global south. There are now over 4,000 EPZs, which is over 3,000 more than 20 years ago. Some countries have made the promotion of such zones central to their economic development strategies, while others have questioned their contribution to national development. Meanwhile, the increasing implementation of international trade rules mean that some of the traditional incentives for EPZs, such as tax breaks for exports, are no longer in line with WTO rules. In that context EPZs, also called Special Economic Zones (SEZs), need to innovate new means of maintaining and developing their competitiveness.
This exploratory report suggests that changes taking place in the global market mean that Export Processing Zones (EPZs), and Special Economic Zones (SEZs) more generally, can be restructured as centres of excellence for sustainable development. Such restructuring would increase the appeal of EPZs to multinational enterprises (MNEs) and their suppliers, while simultaneously contributing to the implementation of the Sustainable Development Goals (SDGs), also known as ‘Global Goals’.
EPZs can enhance competitiveness through a ‘role reversal’: switching from a narrow focus on cost advantages and lower standards to become champions of sustainable business. EPZs can find new grounds for competitiveness through meeting the growing expectations on MNEs and their suppliers to exercise good social and environmental practices. “Next generation” EPZs can gain a competitive advantage by not only providing conventional commercial benefits (such as modern infrastructure and expedited permitting), but by also providing cost-effective support for good environmental and social practices for firms operating within their boundaries.
A ‘Framework for Sustainable Economic Zones’ is offered to guide consideration of EPZ standards, infrastructure and administrative assistance to enhance sustainability performance.
Addressing Regulations and Non-Tariff Measures to Strengthen Regional Integration and Sustainable Growth
Exporters need to comply with extensive product requirements: tolerance limits for pesticide residues, hygienic practices during production, processing methods, microbiological criteria of the final product and certification, among others. These regulations, found in all developed countries and increasingly in developing countries, represent an immense challenge for exporters, importers and policymakers. UNCTAD research found that the aggregate restrictiveness of regulations is two to three times higher than tariffs. Furthermore, regulations are particularly concentrated in sectors of export interest for developing countries.
Due to their impact on trade such technical regulations are considered as non-tariff measures (NTMs). NTMs are policy measures, other than ordinary customs tariffs, that can have an economic effect on international trade. NTMs thus include a wide and diverse array of policies that countries apply to imported and exported goods equally to domestic producers but still have important restrictive and distorting effects on international trade. However, these measures cannot simply be eliminated. These regulations can however become non-trade barriers if the trade restrictiveness, whether or not deliberate, exceeds what is needed for the measure’s non-trade objectives.
This can and should be addressed although it may be difficult to be clearly identified. An exporting country may perceive the hygienic production requirements for apple juice as too strict, while the importing country could argue that these requirements legitimately pursue the highest level of consumer safety.
» Addressing Regulations and Non-Tariff Measures to Strengthen Regional Integration and Sustainable Growth (PDF, 3.81 MB)
Building the African Continental Free Trade Area
Some suggestions on the way forward
The formation of the CFTA would be a timely initiative. It will provide a framework for national and regional coordination in the trade and economic sphere to spearhead Africa’s implementation of the new development agenda in the post-2015 period. As pointed out by UNCTAD, achieving an economic integration process in Africa that is people-centred and development-oriented is a key to building up the continent’s resilience in addressing and recovering from global financial and economic crises, as that of 2008. Such “developmental” regionalism brings added benefits of peace, security and political stability on the continent.
Once fully implemented, the CFTA would offer African countries considerable benefits, and gains would be even higher if trade liberalization is complemented by trade facilitation measures, elimination or reduction of non-tariff barriers, strengthening of regulatory frameworks and improved infrastructure. A recent statement by the AUC articulates succinctly the expected gains while pointing out that “Africa’s integration is not a matter of choice. It is rather imperative”.
According to most estimates, the opening of the regional market to African goods and services will increase intra-African trade significantly. It has been estimated, for instance, that the removal of tariffs on intra-African trade could raise their share in total African trade from about 10.2 per cent to 15.5 per cent from 2010-2022. With enhanced trade facilitation measures the gains would double to reach 21.9 per cent. Moreover, most of the increase in trade from the removal of tariffs would be felt in the manufacturing sector, as intra-African trade has a relatively higher industrial content than trade of African countries with the rest of the world. A further boost to intra-African trade would arise from the removal of non-tariff barriers, and gains would be augmented if informal traders are better integrated into the formal trade channels.
The path towards an accelerated pan-African economic integration, however, presents formidable political, economic, legal and functional challenges. These need to be tackled efficiently, using efficiently scarce resources. To multiply the benefits of the CFTA – expanded markets for goods and services, unobstructed factor movement, new investment opportunities, and the like – an ample vision of trade, investment and business facilitation needs to prevail.
» Building the African Continental Free Trade Area: Some suggestions on the way forward (PDF, 6.04 MB)
If you care about Least Developed Countries, care about Non-Tariff Measures
The sustainable development goals call for a doubling of least developed country (LDCs) export. Two main elements to achieve this goal are to increase productive capacity and improve market access conditions for LDCs. These two elements are closely related as even the best market access conditions cannot be exploited if productive capacity is unable to meet increasingly demanding international markets. Although DFQF treatment remains essential for LDCs, actual market access is increasingly determined by other requirements many of which are more linked to productive capacity. These requirements are generally referred to as Non-Tariff Measures (NTMs) to trade and include a wide range of requisites from technical standards (TBTs) and sanitary and phytosanitary (SPS) measures to antidumping, rules of origin and other administrative provisions.
All these measures add to the cost of trading for all exporters. However, the costs of compliance with many of these measures are asymmetrical across exporters because compliance depends on technical know-how, production facilities, and an infrastructural base that, while usually available in developed and emerging markets, is often lacking in many LDCs. In short, the presence of NTMs often makes LDCs exporters unable to compete in international markets. Moreover, the presence of NTMs is particularly large in sectors of fundamental importance for LDCs growth potential such as textile and apparel and many agricultural sectors. All considered, about two-thirds of LDC exports are subject to some form of NTMs. A concern for LDCs is that the trade regulatory framework makes a substantial part of LDCs products uncompetitive or even unmarketable and therefore diverted to less profitable markets.
Policy responses are important. Least developed countries package at MC10 should go beyond DFQF to include technical cooperation and trade facilitation mechanisms to help them comply with the asymmetric and increasing costs associated with NTMs. Global regulatory convergence towards international standards to the extent possible is important so that LDCs do not face different regulations in each market. Furthermore, ensuring effective and coherent regulations within LDCs is important to strengthen participation in regional and global value chains.
» If you care about Least Developed Countries, care about Non-Tariff Measures (PDF, 1.4 MB)
Modalities for tariff negotiations towards a Continental Free Trade Area (CFTA)
Some key issues for consideration
The CFTA project started from the premise on the necessity to boost intra-African trade by fast-tracking continental FTA to support development in the continent. At the root lies the observed low level of intra-African trade, which hovered around 10 per cent of total African merchandise trade over the recent past.
There is a large disparity in trade flows among different RECs. SADC’s strong propensity to import from Africa is largely a reflection of its large intra-REC trade with 80 per cent of SADC’s total intra-African imports originating in other SADC countries. This is followed distantly by COMESA and ECOWAS while its trade with UMA is marginal. Generally all RECs import most intensively from the same REC partners with notable exceptions of ECCAS and COMESA. For both regions, SADC is the largest source of imports reflecting their proximity, the level of market integration achieved and complementarity. UMA registers a high rate of intra-REC imports, as well as imports from the neighboring COMESA. ECOWAS appears to enjoy a high level of reliance on its own regional sources. In general, the intra-African trade linkage appears to follow geographical congruity (e.g., UMA-COMEAS, COMESA-SADC, ECCAS-SADC) but weak essentially between remote areas, on the North-South, EastWest, and North-Central-West axes.
One of the critical issues in the CFTA negotiations is to ascertain the adequate level of ambition for CFTA. This should be ideally informed by possible economic gains and losses that may be expected from the continental CFTA liberalization. As the objective of the endeavor is to boost intra-African trade, including with a view to doubling the share of intra-African trade by 2020, and to foster the continent’s broadbased development, the assumption of the negotiations is to aim at a highest level of ambition to realize zero tariffs for a large share of products.
» Modalities for tariff negotiations towards a Continental Free Trade Area (CFTA): Some key issues for consideration (PDF, 3.95 MB)
The oceans economy: a formidable asset for the advancement of sustainable development
The 2030 Sustainable Development Agenda contains for the first time a specific goal dedicated to the role and conservation of oceans. Sustainable Development Goal 14 aims at conserving and sustainably using the oceans, seas and marine resources for sustainable development. UNCTAD is contributing to the advancement of this goal by supporting developing countries, and particularly Small Island Development States (SIDS), in developing their own oceans economy and trade strategies. UNCTAD is also supporting developing countries in building consensus in multilateral trade negotiations that are relevant to sustainable fisheries, designing sustainable trade in fish national and regional policies and in addressing harmful incentives to conservation such as fishing and fuel subsidies.
The value of the oceans economy sectors, such as fisheries, maritime transport, coastal tourism, off-shore energy and marine bio prospecting, has been estimated at about 3 trillion USD annually. These would equal the size of the fifth economy in the world. The top fifth economies in the world, according to GDP size in 2014 were the United States of America, China, Japan, Germany and the United Kingdom.
» The oceans economy: a formidable asset for the advancement of sustainable development (PDF, 473 KB)
Non-tariff measures and Sustainable Development Goals: Direct and indirect linkages
Trade creates employment opportunities, generates income, reduces costs for industries and consumers, motivates entrepreneurs and attracts investment in essential infrastructure. Trade and economic development can generate substantial private and public financial means to pursue the social and environmental dimensions of sustainable development.
Certainly, the development impact of trade is not unconditional. Firstly, economic development requires an appropriate sequencing of trade openness as well as an enabling environment of other policy and non-policy factors. Secondly, for economic development to become inclusive, sustained and sustainable, another layer of conditions applies. For example, a positive effect on poverty reduction relies on favourable sectorial growth patterns and inclusive employment and social policies. The latter are important to address potential inequalities within economies as a result of trade.
In this context, and with falling tariffs, non-tariff measures have moved to the forefront of trade policymaking. This policy brief argues that the proliferation of non-tariff measures plays a crucial role in shaping global trade patterns and their sustainability.
» Non-tariff measures and Sustainable Development Goals: Direct and indirect linkages (PDF, 255 KB)
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10th WTO Ministerial Conference – Nairobi: Resource box
WTO members concluded their Tenth Ministerial Conference in Nairobi on 19 December by securing an historic agreement on a series of trade initiatives. The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.
The WTO’s Tenth Ministerial Conference was held in Nairobi, Kenya, from 15 to 19 December 2015, the first such meeting hosted by an African nation. The Conference was chaired by Kenya’s Cabinet Secretary for Foreign Affairs and International Trade, Amina Mohamed.
The Conference was opened on 15 December by Kenya’s President, Uhuru Kenyatta. During the opening session, the Conference was also addressed by Ms Mohamed, DG Azevêdo and the Chair of the WTO’s General Council, Fernando de Mateo. They were joined at the Opening Ceremony by President Ellen Johnson Sirleaf of Liberia, whose country concluded its WTO membership negotiations on 16 December.
The closing session was held on 19 December.
“This marks the first time our Ministerial Conference is being held in Africa and it is clear to me that all WTO members want to ensure that trade plays its full role as a force for growth and development in Africa and beyond. Africa has 43 WTO members – more than any other continent. So what is good for Africa is good for the WTO.”
Roberto Azevêdo, WTO Director-General
Nairobi Package
The Nairobi Package contains a series of six Ministerial Decisions on agriculture, cotton and issues related to least-developed countries. These include a commitment to abolish export subsidies for farm exports, which Director-General Roberto Azevêdo hailed as the “most significant outcome on agriculture” in the organization’s 20-year history.
The other agricultural decisions cover public stockholding for food security purposes, a special safeguard mechanism for developing countries, and measures related to cotton. Decisions were also made regarding preferential treatment for least developed countries (LDCs) in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences.
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Ministerial Decision on Special Safeguard Mechanism for Developing Country Members
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Ministerial Decision on Public Stockholding for Food Security Purposes
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Ministerial Decision on Preferential Rules of Origin for Least-Developed Countries
Ministers also welcomed the adoption of three Decisions concerning the Regular work under the General Council:
Download the complete Nairobi Package as a single document:
“Two years ago in Bali we did something that the WTO had never done before – we delivered major, multilaterally-negotiated outcomes. This week, here in Nairobi, we saw those same qualities at work. And today, once again, we delivered.”
DG Azevêdo
Background papers
Perspectives on African Trade Performance and Policy and the Role of the Multilateral Trading System - Policy Brief (Patrick Low, Chiedu Osakwe and Maika Oshikawa)
The Agriculture Negotiations at the World Trade Organization (WTO) - tralac Trade Brief (Miriam W. O. Omolo)
News
WTO Members clinch agriculture export competition deal, weigh next steps for negotiating future - ICTSD Bridges Daily Update #5
WTO members secure “historic” Nairobi Package for Africa and the world - 19 December 2015
WTO delivers ground-breaking deal for development - 19 December 2015
As clock runs down, WTO Nairobi talks kick into gear - ICTSD Bridges Daily Update #4
Azevêdo welcomes efforts to help implement Trade Facilitation Agreement - 17 December 2015
Technology trade deal reached at Nairobi WTO Ministerial - ICTSD Bridges Daily Update #3
WTO members conclude landmark $1.3 trillion IT trade deal - 16 December 2015
President Kenyatta hails approval by ministers of Liberia’s WTO membership - 16 December 2015
WTO members urged to crown successful year of multilateral diplomacy with Nairobi deal - 15 December 2015
WTO negotiating function under scrutiny as Ministerial begins - ICTSD Bridges Daily Update #2
Divides run deep as Ministers arrive at Nairobi WTO meet - ICTSD Bridges Daily Update #1
Ministerial statements
Fisheries Subsidies: Ministerial Statement, Revision | 19 December 2015
ACP Ministerial Communiqué on the Tenth Session of the WTO Ministerial Conference | 18 December 2015
G90 Ministerial Communiqué on the Tenth Session of the WTO Ministerial Conference | 18 December 2015
Arab Ministerial Meeting: Communiqué | 15 December 2015
Statement of the 39th Cairns Group Ministerial Meeting | 14 December 2015
LDC Trade Ministers’ Meeting: Ministerial Declaration | 14 December 2015
G-33 Ministerial Communiqué | 14 December 2015
Ministerial Conference documents and submissions
Draft Decision on Regional Trade Agreements: Communication from Brazil | 18 December 2015
Services transparency in domestic regulation: Submission by Australia and Canada | 11 December 2015
Statement on Export Competition: Submission by the Philippines | 9 December 2015
Kenya’s President, Uhuru Kenyatta, letter to WTO Director-General Roberto Azevêdo | 9 December 2015
Joint Communication from 29 developing and developed Members | 7 December 2015
The three facilitators appointed by Director-General Roberto Azevêdo to support members to develop a Ministerial Declaration for the WTO’s 10th Ministerial Conference presented their draft Declaration text at a meeting of all members on Friday, 27 November.
The facilitators (Ambassador Gabriel Duque of Colombia, Ambassador Harald Neple of Norway and Ambassador Stephen Karau of Kenya) prepared this text at the request of members, after an intensive period of consultations on the shape, structure and content of a potential Ministerial Declaration. The facilitators used textual proposals made by members to develop their draft. At the request of members, they also excluded the most contentious issues from their draft, leaving them to be addressed via a separate process.
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African Group Proposed Language on NFIDCs: Part III of the Facilitators’ Text | 3 December 2015
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African Group Additions to the Facilitators’ Room W Document | 2 December 2015
Submission by Egypt on Part III of the Nairobi Declaration | 12 November 2015
Draft Inputs into MC10 Declaration from the ACP Group | 10 November 2015
ACP Group Declaration on the Tenth WTO Ministerial Conference (MC10) | 21 October 2015
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Global climate talks stumble near finish line; Obama and Xi talk
Efforts to craft a global accord to combat climate change stumbled on Friday with China and many other nations refusing to yield ground, forcing host France to extend the U.N. summit by a day to overcome stubborn divisions.
After a night of often fraught discussions on issues including a proposed goal to phase out net greenhouse gas emissions in the second half of the century, French Foreign Minister Laurent Fabius conceded the two-week summit would not end on Friday as planned.
He said a final text, meant to chart a way to far wider use of greener energy such as wind and solar power, would now be presented to nearly 200 nations for review only on Saturday, a day later than planned.
Delegates said China was resisting calls, led by the United States and the European Union, for all nations to review and update their national plans for curbing greenhouse gas emissions every five years.
President Xi Jinping has already promised that carbon dioxide emissions from China’s rapidly developing economy will start falling from around 2030, and does not want to revisit the target. Delegates said China had also reasserted demands that developed nations do far more to curb greenhouse gas emissions, mostly the result of burning coal, gas and oil.
Gao Feng, the Chinese Foreign Ministry’s special representative on climate change, played down differences between China and the United States, saying: “There are no special differences... A deal is getting closer.”
“In fact, we have been pushing all kinds of countries, whether it is the EU or others. We wish they can all be more ambitious,” he said.
Red lines
Many other countries were also holding their ground.
Saudi Arabia said it would resist a new 27-page draft text calling for a rise in global temperatures to be limited to “well below” 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels – a plan that it fears could jeopardise oil production.
The draft text, released on Thursday night, also sets a target of “greenhouse gas emissions neutrality in the second half of the century” – more ambitious than previous drafts in shifting to cleaner energy sources.
“Major countries have entrenched behind their red lines instead of advancing on compromise,” said Matthieu Orphelin, spokesman for the Nicolas Hulot Foundation. Hulot is French President Francois Hollande’s envoy on climate change.
Delegates said the talks were also split on who should pay for developing nations to move to low-carbon economies and to mitigate the effects of global warming, which scientists say will raise sea levels and accelerate desertification as well as triggering more intense and frequent storms, floods and droughts.
One source said the “night was very hard”.
But Fabius, speaking on French BFMTV, maintained an optimistic tone. “The atmosphere is good, things are positive, things are going in the right direction,” he said.
U.N. climate talks almost always run into overtime at the weekend and one senior European official praised Fabius.
“Everybody’s to blame – there are no good guys or bad guys. It’s going well. The French are allowing everyone to have their say,” he said.
Xi spoke with U.S. President Barack Obama by telephone, Chinese state television reported.
It was unclear what they had discussed, or whether the call signalled new divisions between the world’s largest emitters, who struck a landmark climate accord last year.
Xi said the two nations “must strengthen coordination with all parties and work together to ensure the Paris climate summit reaches an accord as scheduled”, according to state television.
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tralac’s Daily News selection: 11 December 2015
The selection: Friday, 11 December
Today, in Nairobi: 7th Northern Corridor Transport Observatory Report validation workshop. For highlights: @NorthernCoridor
Today, in Gaborone: Sub-regional coordination mechanism for Eastern and Southern Africa (UNECA)
Gaborone discussion update: 'Why African-based institutions should operate coherently' (UNECA)
A trade facilitation strategy for Africa (AU)
The main objectives of the forum [being held in Libreville] is to appraise participants on new developments and endeavours in Trade Facilitation, to share best practices in the scheduling and implementation of Trade Facilitation Measures, to validate Terms of reference for Studies on the Gap Analysis of the implementation of the WTO Trade Facilitation Agreement in Africa and Development of Draft African Union engagement Strategy on the Agreement. The implementation of both the BIAT Action Plan and the WTO Trade Facilitation Agreement is expected to bring numerous benefits to the African Continent through improvements in the areas of transparency and fairness, good governance and modernization of the trade supply chain: This is key for poverty alleviation in Africa. Mr Aly Ibouroi Moussa called upon African WTO members to ratify the Trade Facilitation Agreement so as to be able to access the assistance facilities provided by the WTO and the WCO to implement the Agreement.
Kenya ratifies Trade Facilitation Agreement in advance of MC10 (WTO)
Kenya has ratified the new Trade Facilitation Agreement, less than a week before it hosts an important high-level WTO trade meeting. The WTO Secretariat received Kenya’s instruments of acceptance on 10 December. Kenya is the 57th WTO member and sixth African nation to ratify the TFA. The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement. In addition to Kenya, the following WTO members have also accepted the TFA:
WTO Nairobi summit: what’s in for East Africa? (Daily Nation)
COMESA urges Member States to ratify the Tripartite FTA (COMESA)
Sixteen countries have so far signed the Tripartite FTA. The Council encouraged Member States to ensure that the outstanding issues from Phase I negotiations are finalized within the 12 months from June 2015 as decided by the Tripartite Council of Ministers. “Negotiations continue in parallel to Phase II negotiations covering trade in services, competition policy, intellectual property rights and other trade related issues,” according to progress report presented to the Council.
With regard to movement of business persons: the Council noted that although the negotiation process could not be finalized, it was on course on a separate but parallel track with the Phase II negotiations. A draft tripartite Agreement has been developed and more work on this track is set to continue in phase II negotiations. The Council urged Member States to adopt more liberal provisions for the movement of business persons to facilitate trade and investment across borders. The Council also noted that seven of the 10 annexes that contain issues under negotiation have been finalized. The outstanding issues are tariff elimination schedules (annex I) trade remedies (annex II) and rules of origin (annex IV).
NCIP Kigali summit: joint communique (New Times)
On Single Customs Territory: The Summit noted the integration of the Regional Customs Transit Guarantees system and the improvement in its functionality. The Summit further noted the report of the time release study by the Northern Corridor Transit Transport Coordination Authority which has recorded increased efficiency on the time it takes to move cargo from the Port of Mombasa to the inland destinations along the Northern Corridor. The Summit further directed the Ministers of Finance together with Heads of Revenue Authorities to expeditiously resolve the challenges presented by diversion of transit cargo and the need to harmonise the respective warehousing regimes. The Summit further directed the procurement process of the Electronic Cargo Tracking System and address the issue of cash deposits and overstayed cargo in Mombasa.
Ethiopia’s entry into NCIP signals start of new trade bloc (Daily Nation)
The formal entry of Ethiopia into the Northern Corridor Integration Projects initiative is likely to reshape the regional economy and politics, creating a new trading bloc. In the 12th Head of States meeting on Thursday in Kigali, Rwanda, Ethiopia applied to join Kenya, Rwanda, South Sudan and Uganda, in the initiative, which is slowly transforming into more than just an infrastructure oriented group.
EA Grain Council to link regional grain businesses to improve trading (New Times)
Cross-border shares trading pact between Kenya, Nigeria signed (Daily Nation)
What EAC can learn from Nordic countries (Daily Monitor)
IGAD regional fisheries and aquaculture strategy: update (IGAD)
Most of the current fishery activities in the IGAD region are focused on inland waters located in the highlands and populated areas. The fish resource potential and its contribution to resilience, food security and livelihood diversification in Arid and Semi-Arid Lands (ASALs) are often overlooked by Member States and development partners because the huge rivers with high potential for fisheries are mainly found in the lowlands most of which are trans-boundary rivers. The workshop shared challenges and recommendations that apply to all Member States, such as:
Competitive cities for jobs and growth: what, who, and how (World Bank)
Of particular interest is the evidence from Africa: The top 10% of African cities in the dataset achieved an annual growth rate of 11.0%, strengthening hopes for the continent’s growth story. Unfortunately, the bottom 10% suffered from a fall in GDP per capita of 1.7% each year, underscoring the severity of Africa’s competitiveness challenge and the need for growth-focused interventions in Africa’s urban centers to fully reap the benefits of urbanization.
The report looks at global and regional trends, comparing different types of cities—by income, sector, region, and industrial mix. It found that competitive cities include more than capital cities, or global centers of commerce. They are often secondary cities that are experiencing rapid industrialization, such as Saltillo, Mexico; Meknes and Tangier, Morocco; Coimbatore, India; Gaziantep, Turkey; Bucaramanga, Colombia; Onitsha, Nigeria; and Changsha, China. [Download the report, companion papers]
Understanding urban land markets in West Africa (World Bank)
Making Moroccan cities safer and more livable (World Bank)
UN World Economic Situation and Prospects 2016 (UN)
Global growth is estimated at a mere 2.4% in 2015, a downward 0.4 percentage-point revision from forecasts presented six months ago, according to the UN World Economic Situation and Prospects 2016 report. Given the anticipated slowdown in China and persistently weak economic performances in other large emerging economies, notably Russia and Brazil, the pivot of global growth is partially shifting again towards developed economies. The global economy is projected to grow by 2.9% in 2016 and 3.2% in 2017, supported by generally less restrictive fiscal and still accommodative monetary policy stances worldwide, according to the report.
Extract: Developing economies in general would need to find new sources of growth domestically or regionally to escape the potential downward spiral emanating from commodity-price- and exchange-rate-related shocks. This would require Governments to pursue comprehensive structural transformation and industrial policies that would mobilize domestic savings and investment, improve institutions and corporate governance and reduce transaction costs and increase competitiveness. Sustained and sustainable improvement in labour productivity would allow many developing countries to create more decent jobs, increase the labour share of income and reduce income inequality both within and between countries. [Chapter 1 is available for download]
Swaziland: IMF concludes 2015 Article IV Consultation
SACU revenues are expected to decline markedly in 2016/17, putting pressures on fiscal and external balance. Furthermore, tighter or more volatile global financial conditions and weaker growth in South Africa could have negative spillovers to Swaziland. The recent weakening of the South African economy, together with the expected revision to the revenue sharing formula, point to downside risks for SACU revenues.
Swaziland: Mbabane-Manzini corridor dam feasibility study project (AfDB)
Zimbabwe: Cabinet to adopt diaspora policy (The Herald)
Cabinet is expected to adopt the country’s National Diaspora Policy which will encourage Zimbabweans in the diaspora to invest back home and make use of the expertise they would have gained over the years in other countries for economic development. In 2014, diaspora remittances amounted to more than $1,8bn to contribute about 15% of the country’s GDP. The Herald Business understands that Government has lined up Diaspora Engagements Conferences in South Africa, Australia and United Kingdom to engage more than 2 million Zimbabweans resident in those countries.
Zimbabwe: Resolve looming trade dispute (editorial comment, Financial Gazette)
The complaint raised by South Africa gives the first possible cue of a looming trade war. Yet it is important to note that South Africa has always had its cake and eaten it. In his 2014 budget statement, Finance Minister Patrick Chinamasa said South Africa was no longer observing a 1964 bilateral trade agreement, which provided for preferential rates of duty, rebates and quotas on certain goods traded between the two countries.
Zimbabwe: To ban or not to ban secondhand clothes imports? (Financial Gazette)
Mozambique: Fraught relationships (Financial Mail)
Relations between foreign-owned enterprises and local communities are often difficult in Mozambique. Many of the companies are struggling to turn a profit in the current commodities downturn, while local communities complain that promised investments in health and education have not materialised, and workers complain over pay and employment conditions. The incident in Muiane is not the first situation in which the Mozambican police appear to have worsened tensions. [The author: Tom Bowker]
AfDB's 'lessons learned' database is now open to the public (AfDB)
The database brings together more than 500 lessons and 1500 recommendations extracted from sector, thematic, corporate, country, impact and project performance evaluations, evaluation syntheses, and other reviews. Users can search for lessons, recommendations and documents using a variety of search parameters like keyword(s), sector, country, theme, date range and type of document.
Credit rating agencies: junk status? (UNCTAD)
Risk assessment is critical to well-functioning capital markets. Yet reliance on the “big three” credit rating agencies has increased with the rise of international capital flows. Their assessments have been strongly pro cyclical and have missed systemic risks. Insufficient competition, conflicts of interest and ideological bias are some of the reasons for this, says UNCTAD Policy Brief. The wide-spread use of their ratings has now come to be recognised as a potential threat to financial stability. Concerted reform of credit rating agencies is therefore urgently needed.
Extract: With the likelihood of increased debt distress across companies and countries, and at all levels of development, further reform of credit rating agencies should be an urgent priority of the international community, beginning with the next Group of 20 agenda under the leadership of China.
Asian, China's industrialization experience pivotal to Africa: DG UNIDO (Xinhua)
AU Commission discusses KIPPRA’s role in Agenda 2063 (KIPPRA)
Chinese devaluation is a bigger danger than Fed rate rises (The Telegraph)
Banking on Asean banks to step up with AEC (Straits Times)
Christopher Cramer: 'Industrialising freshness in global agriculture' (SOAS)
India: Job creation unlikely to pick up soon, courtesy weak exports (Livemint)
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World economic growth falls below last forecast, only modest improvement foreseen – UN
The world economy has fallen below forecasts of even six months ago and will grow only modestly over the next two years due to “cyclical and structural headwinds,” including low commodity prices and stagnant investment, the United Nations reported today, urging steps to ensure stronger growth.
“Stronger and more coordinated policy efforts are needed to ensure robust, inclusive and sustainable economic growth, which will be a key determinant for achieving the 2030 Sustainable Development Goals,” UN Assistant Secretary-General of the UN Department of Economic and Social Affairs, Lenni Montiel said of the ambitious sustainability goals adopted at a UN summit in September.
Global growth is estimated at a mere 2.4 per cent in 2015, a downward 0.4 percentage-point revision from forecasts presented six months ago, according to the UN World Economic Situation and Prospects (WESP) 2016 report launched on 10 December 2015.
Amid lower commodity prices, large capital outflows and increased financial market volatility, growth in developing and transition economies has slowed to its weakest pace since the global financial crisis of 2008-2009, it noted.
Given the anticipated slowdown in China and persistently weak economic performances in other large emerging economies, notably the Russia and Brazil, the pivot of global growth is partially shifting again towards developed economies.
The global economy is projected to grow by 2.9 per cent in 2016 and 3.2 per cent in 2017, supported by generally less restrictive fiscal and still accommodative monetary policy stances worldwide, according to the report.
“The expected timing and pace of normalization of the [United States] monetary policy will help reduce some policy uncertainties and provide impetus to revive investment,” Hamid Rashid, Chief of the UN’s Global Economic Monitoring Unit said in presenting the report.
But preventing excessive volatility and ensuring an orderly adjustment in asset prices also depends on commodity price stabilization and no further escalation in geo-political conflicts, the report noted.
Identifying five major headwinds, it cited persistent macroeconomic uncertainties; low commodity prices and diminished trade flows; rising volatility in exchange rates and capital flows; stagnant investment and productivity growth; and a continued disconnect between finance and real sector activities.
Weak growth is also adversely impacting labour markets in developing and transition economies, with unemployment on the rise, especially in South America, or stubbornly high, as in South Africa. At the same time, job insecurity is often becoming more entrenched amid a shift from salaried work to self-employment.
With persistent output gaps, modest wage growth and lower commodity prices, global inflation is at its lowest level since 2009. Deflation risks in developed economies have diminished, but not disappeared, particularly in Japan and the euro area.
Growth in developed economies will gain some momentum in 2016, surpassing the 2 per cent mark for the first time since 2010, the report notes. Economic growth in developing and transition economies is expected to bottom out and gradually recover, but the external environment will continue to be challenging and growth will remain well below its potential.
Monetary authorities need to make concerted efforts to reduce uncertainty and financial volatility, striking a delicate balance between economic growth and financial stability objectives, it stresses.
Given the massive build-up of private debt in many emerging economies, policymakers need to fine-tune their policy mix – more active fiscal policies, macro-prudential instruments, targeted labour market policies, among others – amid volatile global financial conditions.
The report highlights that monetary policies did most of the heavy-lifting since the global crisis to support growth but the time has come for fiscal policies to play a greater role. Well-designed and targeted labour market strategies are needed to complement fiscal policies to re-invigorate productivity, employment generation and output growth.
In a positive note on recent trends in environmental sustainability, it noted that global energy-related carbon emissions showed no growth in 2014 for the first time in 20 years, with the exception of 2009 when the global economy contracted. This suggests the possibility that the world might start to see some de-linking between economic growth and carbon emission growth.
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Kenya ratifies Trade Facilitation Agreement in advance of Nairobi Ministerial Conference
Kenya has ratified the new Trade Facilitation Agreement (TFA), less than a week before it hosts an important high-level WTO trade meeting. The WTO Secretariat received Kenya’s instruments of acceptance on 10 December.
Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.
Kenya is the 57th WTO member and sixth African nation to ratify the TFA. Representatives from the WTO’s 162 members will meet in the Kenyan capital Nairobi from 15-18 December for the organization’s 10th Ministerial Conference, the first WTO ministerial to be held in Africa.
The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement.
In a 1 July address to the WTO’s 5th Global Review of Aid for Trade, Amina Mohamed, Kenya’s Minister of Foreign Affairs and International Trade said that high trade costs have been identified as a brake on trade integration, growth and development.
“Trade Facilitation is a policy good for countries in an integrated and competitive global economy,” she declared.
In addition to Kenya, the following WTO members have also accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d'Ivoire, Grenada, and Saint Lucia.
The TFA broke new ground for developing and least-developed countries in the way it will be implemented. For the first time in WTO history, the requirement to implement the Agreement was directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity.
A Trade Facilitation Agreement Facility (TFAF) was also created at the request of developing and least-developed country members to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members.
Implementation of the WTO Trade Facilitation Agreement (TFA) has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO’s flagship World Trade Report released on 26 October. Significantly, the Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains.
More information on trade facilitation and the TFA can be found at www.wto.org/tradefacilitation. The World Trade Report 2015 is available here.
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COMESA Member States urged to ratify the Tripartite FTA
The COMESA Council of Ministers has urged Member States that signed COMESA-EAC-SADC Tripartite Free Trade Area Agreement (TFTA) to start the process of ratification and those that have not signed to do so.
The Tripartite FTA was launched on 10 June 2015 in Sharm El Shiekh, Egypt, setting the stage for the establishment of a single market for the 26 African countries in the Eastern and Southern African Region. So far, 16 countries have signed the Tripartite FTA but are yet to ratify. At least 14 Tripartite Member/Partner States are required to ratify the Agreement to enter into force.
In its 35th meeting in Lusaka, Zambia this week the Council appreciated the progress made in the negotiations process that include finalizing the outstanding work in Phase I relating to Rules of Origin, elimination of import duties and trade remedies.
At the launch, Heads of State and Government directed the Member/Partner States to expedite the process towards the operationalization of the COMESA-EAC-SADC Tripartite Free Trade Area by finalizing outstanding issues. These included the Elimination of Import Duties, Trade Remedies and Rules of Origin, which will form part of the COMESA-EAC-SADC TFTA Agreement.
The Council encouraged Member States to ensure that the outstanding issues from Phase I negotiations are finalized within the 12 months from June 2015 as decided by the Tripartite Council of Ministers.
“Negotiations continue in parallel to Phase II negotiations covering trade in services, competition policy, intellectual property rights and other trade related issues,” according to progress report presented to the Council.
With regard to movement of business persons, the Council noted that although the negotiation process could not be finalized, it was on course on a separate but parallel track with the Phase II negotiations. A draft tripartite Agreement has been developed and more work on this track is set to continue in phase II negotiations.
The Council urged Member States to adopt more liberal provisions for the movement of business persons to facilitate trade and investment across borders.
The Council also noted that seven of the 10 annexes that contain issues under negotiation have been finalized. The outstanding issues are tariff elimination schedules (annex I) trade remedies (annex II) and rules of origin (annex IV).
“The main TFTA Agreement and the following annexes have undergone legal scrubbing: annex V on customs cooperation; annex III on non-tariff barriers; annex VI on trade facilitation; annex VII on transit trade and transit facilitation; annex VIII on technical barriers to trade; and annex IX on sanitary and phyto-sanitary measures,” the report says.
A total of 20 tariff offers have been tabled and the Tripartite Task Force is in the process of populating annex I of the TFTA Agreement based on the offers made so far.
Work on the Tripartite Dispute Settlement mechanism has also been finalized while that on trade remedies will continue as part of the Built-In Agenda.
Work on the Tripartite Industrial Development Pillar is on-going and the relevant committee has, among other things, developed the modalities for co-operation in industrial development.
As a way forward, the Council urged COMESA Member States to offer the COMESA Free Trade Area tariff concessions to other Tripartite Member/Partner States on reciprocal basis.
Further, the Council decided that private sector should take part in the Tripartite FTA negotiations.
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Joint communiqué on the 12th Summit of the Northern Corridor Integration Projects
The 12th Summit of the Northern Corridor Integration Projects took place in Kigali, Rwanda on 10th December, 2015. H.E. Paul Kagame, President of the Republic of Rwanda, host of the Summit welcomed H.E. Yoweri Kaguta Museveni, President of the Republic of Uganda, H.E. Uhuru Kenyatta, President of the Republic of Kenya, and Mr. Aggrey Tisa Sabuni, Presidential Advisor on Economic Affairs, Republic of South Sudan.
In attendance were Hon. Dr. Tedros Adhanom Ghebreyesus, Minister for Foreign Affairs of the Federal Democratic Republic of Ethiopia, Mr. Justin Kamwanya-Kalemuna, National Coordinator for the Democratic Republic of Congo, Amb. Alexis Ntukamazina, Ambassador of the Republic of Burundi to Rwanda, and Amb. Ali Idi Siwa, High Commissioner of the United Republic of Tanzania to Rwanda, Dr. Richard Sezibera, Secretary General of the East African Community (EAC), Mr. Gabriel Negatu, Regional Director, African Development Bank and Mr. Donat Bagula, Executive Secretary of the Northern Corridor Transit and Transport Coordination Authority (NCTTCA). The Private Sector Representatives from the Partner States and the East African Business Council were also in attendance.
The Heads of State noted with appreciation progress made since the last Summit in the implementation of the projects under the Northern Corridor Integration initiative and re-affirmed their unwavering commitment to the realization of the set goals. The Heads of State reiterated their determination to continue fast-tracking the implementation of the key projects that facilitate regional integration. The Heads of State agreed and emphasised the need for regular monthly meetings at Ministerial level as well as for the National Coordinators to work more closely together to coordinate institutions in their respective countries and speed up implementation of NCIP projects.
The Summit welcomed the growing collaboration between Governments and the Private Sector for the successful implementation of the Northern Corridor Integration Projects, noting that the collaboration will go a long way in attracting financing and enhancing capacity in the sectors earmarked for fast-tracking. The Summit underscored the need for key players in the Private Sector to form joint ventures and consortia necessary to enhance their capabilities and expertise that allow the infusion of local finance and content in projects being implemented.
The Summit warmly welcomed the announcement by the Federal Democratic Republic of Ethiopia to join the Northern Corridor as a Partner State as of this 12th Summit, an indication of the growing importance of integration in regional development.
The Heads of State considered the Report of the 12th Ministerial meeting, endorsed the recommendations contained therein and directed as follows:
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On Standard Gauge Railway (SGR) Development, the Summit took note of the steady progress in the construction works of the Mombasa-Nairobi section which has reached sixty percent completion. The Summit further noted the signing of the funding agreement for the Nairobi-Naivasha section with EXIM Bank of China. On the remaining sections of the SGR, the Summit was appraised that Kenya had received the draft commercial contracts for the Naivasha-Malaba section and the same were under review. The Heads of State directed the Ministers to finalise preparation of bankable project proposals for the remaining sections on the Eastern, Western and Southern routes and Mirama-Kigali section.
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On ICT Infrastructure Development, the Summit noted the considerable progress made in ICT sector and commended the signing of an MOU between NCIP and the Northern Corridor Technology Alliance (NCTA), for collaboration of Governments and the private sector in the field of ICT. The Heads of State witnessed the launch of POSITIVO-BGH computer assembled in Kigali and welcomed the production of affordable devices necessary to increase penetration of ICT.
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On Oil Refinery Development, the Summit noted progress on incorporating the Refinery Holding Company, through which Partner States shareholding in the project will be channelled and urged the remaining Partner States to confirm their level of shareholding participation in the project.
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On Project Financing, the Summit directed the Ministers in charge of infrastructure to expedite conclusion of the bankable project proposals to pave way for commencement of Financing mobilisation.
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On Power Generation, Transmission and Interconnectivity, the Summit took note of the completion of the Mirama–Shango Transmission line and the installation of voltage control equipment in Western Kenya. The Summit further took note of the signing of an MOU between NELSAP, Uganda and South Sudan for the 400kV Olwiyo-Juba Transmission line. The Summit directed the Ministers to ensure that steady progress is maintained and power trading commences by April 2016.
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On Refined Petroleum Products Pipeline Development, the Summit directed Ministers to continue exploring alternative financing options including Public Private Partnerships to raise funds for the development of the project and that the Cluster be merged with the Private Sector Cluster.
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On Air Space Management, the Summit welcomed the signing of Bilateral Air Service Agreements between Rwanda and South Sudan; Rwanda and Uganda; and Uganda and South Sudan and the conclusion of MOUs on Search and Rescue and on Incident and Accident Investigation. The Summit reiterated the need to conclude the Multilateral Air Services Agreement Studies and to implement by April 2016.
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On Human Resource Capacity Building, the Summit noted the continuous engagement of the Ministers in developing alternative funding for Centres of Excellence to complement Government support.
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On Land for the Infrastructure Corridor, the Summit noted the importance of securing land for the infrastructure projects and directed responsible Ministries to hasten the process of land acquisition.
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On Single Customs Territory (SCT), the Summit noted the integration of the Regional Customs Transit Guarantees system and the improvement in its functionality. The Summit further noted the report of the time release study by the Northern Corridor Transit Transport Coordination Authority (NCTTCA) which has recorded increased efficiency on the time it takes to move cargo from the Port of Mombasa to the inland destinations along the Northern Corridor. The Summit further directed the Ministers of Finance together with Heads of Revenue Authorities to expeditiously resolve the challenges presented by diversion of transit cargo and the need to harmonise the respective warehousing regimes. The Summit further directed the procurement process of the Electronic Cargo Tracking System and address the issue of cash deposits and overstayed cargo in Mombasa.
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On Immigration, the Heads of State welcomed the signing of the bilateral agreement on One Stop Border Post between Kenya and Uganda and directed the Ministers to operationalise the completed One Stop Border Posts at Malaba, Busia and Mirama Hills/Kagitumba. The Summit further directed the implementation of the Agreement on Total Liberalization of Free Movement of Labour, starting with finalisation of Mutual Recognition Agreements (MRAs) among professional bodies, such as Lawyers, ICT and Engineers.
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On Defence, Peace and Security Cooperation, the Heads of States welcomed the depositing of the Instruments of Ratification and directed the Ministers to finalise the accession procedures to Mutual Defence and Security Pacts for approval by Heads of State and deposit of the Instruments at the United Nations and the African Union. Furthermore, the Summit noted that Partner States have signed Cooperation Agreement on the transfer of prisoners and offenders and directed the implementation of this Agreement. The Heads of State directed the Ministers in charge of Internal Affairs to harmonise road safety strategies to reduce road accidents in Partner States.
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On Private Sector participation, the Summit directed the creation of the Private Sector Cluster to be coordinated by the Ministries of Finance.
The Heads of State thanked their host, H.E. Paul Kagame, President of the Republic of Rwanda, for the very warm welcome and courtesies extended to respective delegations during their stay in Kigali.
The next Summit will be held in Kampala, Uganda, at a date to be communicated.
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African Union Customs Experts meet to develop a Trade Facilitation Strategy for Africa
The 1st Meeting of the African Union Customs Experts on the Development of a Trade Facilitation Strategy for Africa, commenced on 9 December 2015 in Libreville. The Meeting is organized in line with the Action Plan for Boosting Intra-African Trade (BIAT), and fast tracking the establishment of the Continental Free Trade Area (CFTA) by 2017 and also taking into account the conclusions of the 9th World Trade Organization (WTO) Ministerial Conference held in Bali, Indonesia in December 2013.
The main objectives of the Forum is to appraise participants on new developments and endeavours in Trade Facilitation, to share best practices in the scheduling and implementation of Trade Facilitation Measures, to validate Terms of reference for Studies on the Gap Analysis of the implementation of the WTO Trade Facilitation Agreement in Africa and Development of Draft African Union engagement Strategy on the Agreement.
The implementation of both the BIAT Action Plan and the WTO Trade Facilitation Agreement is expected to bring numerous benefits to the African Continent through improvements in the areas of transparency and fairness, good governance and modernization of the trade supply chain: This is key for poverty alleviation in Africa.
On behalf of Mrs. Treasure Maphanga, Director of Trade and Industry of the African Union, Mr. Aly Ibouroi Moussa, Head of Customs Division thanked the Government and people of the Gabonese Republic for hosting the meeting and for the excellent facilities put at the disposal of the participants. He pointed out the correlation between the BIAT Program and the WTO Trade Facilitation Agreement which the High Level African Trade Committee made up of Heads of State and Government called for expeditious implementation.
He indicated that research shows that by implementing the WTO Trade Facilitation Agreement, the cost of doing business is expected to decrease significantly. “Research points that by implementing the WTO Trade Facilitation Agreement, businesses can expect to see trade costs decrease by between 10 to 15 %, and a boost to the world economy by more than US$1 trillion”, he emphasized.
In conclusion, he called upon African WTO Members to ratify the Trade Facilitation Agreement so as to be able to access the assistance facilities provided by the WTO and the Word Customs Organization (WCO) to implement the Agreement.
In his opening remarks, the Director General of Customs of the Republic of Gabon, Mr. Alain Paul Ndjoubi Ossamy, recalled the WTO Trade Facilitation Agreement and observed that it imposes an innovatory approach to the administration of International Trade. He indicated that Africa has to adjust itself to the new standards to be able develop its economic and social growth. The Director General also pointed out that to implement the Agreement, Africa must harmonize its procedures in order to boost the integration process through the started reforms and involvement of the Private Sector. Before declaring open the meeting, he urged the participants to share best practices that will enable the meeting to establish a favorable framework for the Trade Facilitation in Africa and for the establishment of the Continental Free Trade Area by 2017.
The meeting is attended, among others, by Customs/Trade Facilitation Experts from African Union Member states, Customs Department of Regional Economic Communities (RECs), International organizations dealing with issues of Trade Facilitation such as the World Trade Organization, World Customs Organization, the United Nation Conference of Trade and Development, and The Trade Policy Training Centre in Africa (TRAPCA).