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Britain to fund South African carbon trading experiment
Britain will expand funding for a programme to help coal-rich South Africa develop a carbon trading market in an attempt to rein in its rising greenhouse gas emissions.
The British High Commission in Pretoria last week said it will fund a pilot emissions trading programme from next year to help companies prepare for a 120-rand-per-tonne ($11.21) carbon tax that is expected to come into force in 2016.
The value of the grant was not disclosed.
The launch of South African’s carbon tax, which would apply to major emitters including steel giant ArcelorMittal, utility Eskom and petrochemical group Sasol was delayed by one year to allow more time for planning and consultation with stakeholders.
The South African government earlier this year said major emitters will be allowed to use carbon offsets, which could be generated by investment in domestic or possibly regional clean energy sources, to help meet their tax obligations.
The British High Commission’s grant, awarded through its Prosperity Fund, will for a second time go to Johannesburg-based Promethium Carbon.
“Funding from the Prosperity Fund will assist to fast track the development of a local carbon trading system in preparation for the carbon tax,” said Robbie Louw, a director at Promethium.
Promethium was first selected by the Commission to carry out a 2013 preliminary study as to whether a carbon offset market could complement the tax and help ease costs for industry.
Promethium said the first phase of the study found such a market could function, so a second phase, expected to conclude next February, will focus on how to start trade and on launching a pilot market on the Johannesburg Stock Exchange from 2015.
Promethium estimates South African offsets could reach prices of around 80-100 rand ($7.48-$9.35) per tonne in the first couple of years of the market’s existence – or nearly 20 times the value of credits offsets in the U.N. carbon market, the world’s largest and most liquid.
More than 80 percent of South Africa’s soaring greenhouse gas emissions come from its energy sector, which is heavily reliant on coal – one of the country’s major exports.
Expected to be phased in over time, the country’s carbon tax is one of several initiatives, including a biofuels production incentive and higher vehicle emission taxes, which South Africa wants to launch to help reduce its growing carbon footprint.
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CSOs want stable gas, oil extraction policies
Civil Society Organisations (CSOs) have suggested that there is a need to have a system of ensuring that policies on oil and gas are carried on even after the current government’s tenure lapses.
According to the CSOs, President Jakaya Kikwete’s government has done an impressive job as far as oil and gas sub sector is concerned.
However, their fear is that once the new government takes over after next year’s General Election, the new government might decide either to change the policies on oil and gas or simply drop the Tanzania Natural Resources Charter (TNRC) that is currently on the drawing board.
The CSOs were speaking at an event organised by Uongozi Institute in Dar es Salaam yesterday. The institute organises such events to collect views from stakeholders on natural resources (largely oil and gas).
The Coordinator for Interfaith Standing on Economic Justice and Integrity of Creation, Grace Masalakulangwa, said she was not sure if the new government would carry on with the developments that have been made so far on natural resources by the present government.
“We have seen a good number of development projects that are crucial to the nation being abandoned even before governments finish their office tenure. On natural resources, the current government has shown interest to improve the participation of its citizens in monitoring exploitation of resources, which is a good effort,” she said.
According to the coordinator, the current government has accepted to be monitored on how it exploits natural resources and it has hired a panel of experts on revenue management, environmental assessment and human rights and another for researchers who are required to complete their task by December this year.
“My worry is when these panels have completed their work. Will the new government allow such monitoring to continue or it will come up with its new plans?” she queried.
The Executive Director of Lawyers’ Environmental Action Team (LEAT), Dr Rugemeleza Nshala, said that in order to continue with the extraction processes of gas and oil for national development, policy and laws should be formulated.
Nshala said wananchi should be involved in the processes of coming up with the laws and policies for the benefit of many and not just the few wananchi or the so called investors. Nshala noted that the TNRC which was adopted from other countries like Nigeria has not included the views of crucial stakeholders including the CSOs.
“The TNRC we are discussing today did not take the views of the CSOs where experts are found but it has been adopted from abroad. However, we have a chance to add or subtract other articles, discuss, endorse and own it,” he said.
Meanwhile Uongozi Institute Chief Executive Officer Prof Joseph Semboje, said that law and policy makers should understand that investors’ expectations are different from the citizens.
He therefore cautioned that when signing different pacts and enacting laws and policies, there is a need to consider both the nation and its citizens and the investor on a win-win basis.
He noted that if the natural resources are well managed, they can lead to economic development while if they are mismanaged they can lead to ‘resource curse’. Semboja noted that the views which are collected are meant to identify the gaps, challenges and opportunities and the solutions.
So far Uongozi Institute has collected views from the parliamentary committees, development partners and Civil Society Organizations.
Later on it will get views from research institutions and universities and from district levels and finally those from the wananchi.
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Angola economy back on track, non-oil sector expands
Despite a slight deceleration in 2013 due to lower oil revenues, Angola’s economy appears to be back on track with real GDP growing by 4.4%, according to the World Bank’s latest Angola Economic Update. This is well above the 2009-2011 average of 3.5%, although still below the 5.2% growth in 2012. The country’s non-oil sector also expanded rapidly last year, with non-oil GDP growth reaching 6.3% in 2013 as a result of a recovering agricultural sector, as well as investments in the electricity sector.
The expanded agricultural output and lower food import prices have also helped curb inflation rate to a single digit. “Angola’s inflation is projected to remain on a downward trend as we expect global agriculture price indexes to decrease, and domestic agriculture production to continue its recovery from the 2012 drought,” said Gregor Binkert, World Bank Country Director for Angola.
The drop in oil revenue, coupled with an increase in expenditures, is estimated to have led to a fiscal deficit for the first time since 2009. The 2014 budget (adopted in December 2013) is expansionary relative to 2013, with capital expenditures expected to increase by about 3 percentage points of GDP to about 13% of GDP. If fully implemented, the 2014 budget would imply a fiscal deficit of 4.9%.
At the same time, lower oil related export earnings and higher imports have narrowed the resource-rich country’s current account surplus. While Angola continues to run a significant surplus, the current account remains vulnerable to external shocks. Oil export revenues, which dominate foreign-exchange earnings, declined as global oil prices fell 2013. The correlation between the current account and fiscal balance magnifies the effect of fluctuations in global oil prices on economic activity in Angola, further highlighting the need to diversify the economy and decouple public finances from the oil sector.
“Although the outlook for 2014 is favorable in light of an expected increase in oil production, absent new discoveries, oil production is unlikely to further accelerate GDP growth,” said Elisa Gamberoni, World Bank Economist and lead author of the report. “Non-oil GDP would thus need to expand rapidly to bring Angola back to the strong performance observed before the 2009 crisis. Refocusing public expenditures on capital investment could positively affect Angola’s economic outlook, but only if execution capacity can be increased and the quality of public investment can be ensured.”
One way to do this is to strengthen the export competitiveness of the non-oil sector (including non-oil extractive industries) to help maintain a stable current account surplus, and reduce Angola’s exposure to terms-of-trade volatility. On the fiscal side, there is a need to reform the tax system in order to reduce the exposure to fluctuations in oil related revenues, since non-oil tax revenue as a percentage of non-oil GDP has consistently decreased in recent years. While the non-oil economy expands, maintaining the observed level of international reserves will also help shield the country from potential oil price fluctuations.
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EU welcomes new UN Convention on transparency for investor-state dispute settlement
The European Union welcomes the agreement reached on 9 July 2014 on a new United Nations convention to strengthen transparency in investor-state disputes.
The Convention on Transparency in Treaty-based Investor-State Arbitration will make it easier to apply the UN’s transparency rules to investor-state dispute settlement (ISDS) carried out under existing investment treaties.
“Improving transparency in ISDS is crucial,” said EU Trade Commissioner Karel De Gucht, welcoming the development. “Yesterday’s agreement shows that more and more countries are committed to transparency in ISDS. It also shows that we can improve existing investment treaties by working together.”
Last year, the United Nations General Assembly adopted a set of new rules for the conduct of arbitration proceedings which make such dispute settlement procedures much more transparent. The public will have access to the documents submitted, hearings will be open to the public, and interested parties will be able to make submissions to the proceedings.
The EU played a key role in drawing up these new transparency rules in the responsible Working Group of the UN Commission on International Trade Law (UNCITRAL). The EU will also be the main funder of the repository, the system by which documents are made publicly available on the internet.
The new transparency rules apply to investor-state dispute settlement in treaties concluded after 1 April 2014 and which contain a reference to the UNCITRAL arbitration rules. However, they do not apply automatically to existing investment treaties, such as the more than 1300 bilateral investment treaties concluded by EU Member States or to the Energy Charter Treaty to which the EU has been a party since 1998.
The new UN Convention approved this week will make it much easier to apply transparency rules to existing treaties. As a framework convention, it will allow countries and regional economic integration organizations like the EU to declare their willingness to apply the transparency rules to cases brought under their existing investment treaties. The more countries and organisations adhere to the Convention, the more the rules will apply to the more than 3000 investment agreements currently in force worldwide, including the Energy Charter Treaty. This means the convention will make it faster and easier to improve transparency of investor-state arbitration than a one-by-one renegotiation of the existing investment treaties.
The convention will now go for final adoption within the UN system and will be open for signature in March 2015.
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Documented Immigrants in South Africa, 2013
This statistical release on Documented immigrants in South Africa, 2013 (P03051.4) presents information on immigrants into South Africa that were issued with temporary and permanent residents permits in 2013. The data source for this annual release is derived from data generated by the Department of Home Affairs on the issuance of temporary and permanent residence permits. Statistics South Africa analyses these data to produce information on the annual flow and other characteristics of documented immigrants in South Africa. The results on the number; types and category status of the permits; nationality; and the age structure of the 2013 recipients of both temporary and permanent residence permits are presented in this statistical release. Extracts from the report are presented below.
Temporary residence permits
The number of temporary residence permits (TRPs) issued increased from 106 173 in 2011 to 141 550 in 2012 and decreased to 101 910 in 2013. The fluctuations in the approved permits per year are largely a reflection of the processing procedures and regulations in place at the time of considering the applications. Despite the changes in the numbers per type of permit and the total number of permits issued, the pattern of types of permits remained virtually the same. The distribution indicates that the highest proportion of permits were issued for visitors’ (32,6%) followed by work permits (23,6%).
The ten leading overseas countries were: India (17,0%); China (14,9%); Pakistan (12,5%); Bangladesh (8,8%); UK (8,4%); Germany (5,1%); USA (4,0%), Thailand (2,9%), The Netherlands (2,3%) and France (2,1%). These countries together represent 78,0% of the total recipients from overseas countries. Zimbabwe (33,8%); Nigeria (18,3%); DRC (5,0%); Lesotho (4,9%); Angola (4,6%), Ghana (3,5%); Malawi (3,1%); Cameroon (2,5%); Zambia (2,3%) and Congo (2,3%) were the ten leading countries from the Africa region. Recipients from these countries combined received 80,3% of all the temporary residence permits issued to nationals from Africa
Overall, a relatively high large proportion of the overseas nationals received visitors’ (34,1%), work (30,0%) and relatives’ (22,6%) permits. Only 6,4% and 2,6% of the overseas recipients were issued with study and business permits respectively. All the overseas sub-regions had visitors’ and work permits as their first and second highest proportion of permits with the exception of Asia and Australasia. Considering the permit recipients’ distribution pattern for overseas region with its ten leading countries, the proportion of China recipients’ of work permit was quite high at 60,3%, while India had 41,2% of her recipients with work permits.
The results on Africa’s recipients showed a number of similarities. A large proportion of the Africa recipients were given visitors’ (31,2%) and relatives’ (24,0%) permits. Nearly one in four of the recipients each were issued with study (22,2%) and work (18,3%) permits. North Africa (21,8%) and SADC (21,1%) had the highest proportion of their recipients with work permits. Study permits were more prominent among East and Central Africa (27,3%) and SADC (24,5%) recipients compared to the West Africa (14,7%) and North Africa (13,6%). Furthermore, a relatively high proportion of recipients of business permits was observed among recipients from East and Central Africa (3,6%). Work permit was ranked first only among Zimbabwe recipients (30,8%); only 3,4% of permits to nationals from Lesotho were for work.
The allocation of work permits was less widespread among the 2013 recipients. Hence the ten top countries received 78,0% of the 24 027 work permits leaving only 22,0% to be shared among the remaining countries. Moreover nationals from only three countries [Zimbabwe (24,2%), China (17,2%) and India (13,4%)] received 54,8% of the permits. Five of the ten countries were from the Asia sub-region whereas UK and Germany were the only country from Europe; Zimbabwe, Nigeria and Ghana were the three countries from the Africa region.
Nationals from the top ten countries received a total of 79,3% of the 1 911 business permits issued in 2013.The ten leading countries were made up of four from Asia; three from East and Central Africa; one from West Africa, one from SADC region and one from Europe. Pakistan, China, Bangladesh and India nationals together received 47,9% of the permits. Nationals from Ethiopia, Cameroon and Kenya received 10,7% of the permits. Nigeria and UK recipients were given 16,6% and 2,4% of the permits respectively.
Permanent residence permits
In 2011, a total of 10 011 permanent residence permits (PRPs) were approved and these decreased drastically to 1 283 in 2012 and then increased to 6 801 in 2013. The huge fluctuations in the approved permits per year are mainly due to the processing procedures and regulations in place at the time of adjudicating of the applications.
The distribution of the category status of the temporary residence permits (TRP) used to apply for the PRP shows that more than half (58,3%) of the issued permits were acquired using the relatives’ category status. Work and refugee statuses were used by 31,6% and 5,5% respectively. Business and finance as well as retired persons’ category statuses were used in less than 5,0% of the applications respectively. There were 2 245 (33,0%) permits issued to nationals from the overseas region and 4 555 (67,0%) issued to those from Africa.
Most of the 2 245 nationals from the overseas region received their permanent residence permits based on relatives’ (60,4%), work (29,0%), business and finance (4,7%) and retired persons’ (5,7%) category statuses. China (46,2%), India (38,4%), and Bangladesh (25,5%) showed a relatively high proportion of recipients that obtained the permit based on work category status. Similarly, Italy (13,2%), South Korea (12,8%) and Bangladesh (12,7%) had relatively high proportions of recipients that used their business and finance category status to obtain their permit.
With respect to the pattern observed from the leading African countries, generally more permits were issued based on relatives’ category status. Work category status was used by 34,4% of the recipients from SADC and the West Africa sub-region. The proportions that used work category from North Africa and East and Central Africa were 29,5% and 25,8% respectively. Unlike their counterparts from overseas countries, recipients from African countries seldom obtained their permits based using the business and finance category status. The proportions of recipients with business and finance category status were relatively low (less than 10,0%) in each of the Africa sub-regions even though North Africa (7,7%) and East and Central Africa (5,7%) had higher proportions. Ethiopia (22,6%) was the only country with a relatively high proportion of recipients who used their business and finance category status.
There were five African countries among the ten leading countries for work category status. These countries were: Zimbabwe, Nigeria, DRC, Cameroon and Kenya. Together these countries received 58,3% of the 2013 permits based on work category status, with Zimbabwe alone receiving 40,0%. China and India nationals both were issued with a total of 21,7% whilst the Pakistan recipients were given 2,1%. The only two European countries, Germany and the UK received 1,8% and 1,7% respectively.
A total of 74,4% of the permits based on business and finance category status went to recipients from the top ten countries. Nationals from China received 17,6% whilst those from Ethiopia received 11,9% and Cameroon and Germany each received 8,0% of the permits. Nationals from the three countries in the Africa region namely Ethiopia, Cameroon and Nigeria received 11,9%; 8,0% and 6,3% respectively.
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The 4th Meeting of the BRICS Trade Ministers: Joint Communiqué
Fortaleza, 14 July 2014
The Ministers responsible for trade of Brazil, Russia, India, China and South Africa met in Fortaleza, Brazil, on 14 July 2014, on the eve of the Sixth BRICS Summit.
Global economic developments and their impact on trade and investment
1. The BRICS Trade Ministers reviewed the global economic situation and expressed concern at the slow pace of recovery, which continues to hinder trade and investment flows. They noted that the uncertainty regarding economic growth and policy responses in developed countries could lead to increased volatility in financial markets and further affect the international economy. They emphasized that updating international governance structures remains a necessity for better policy coordination and for the promotion of global economic prosperity.
2. The Ministers expressed their confidence that, in spite of the challenging economic environment, the BRICS countries will continue to contribute to the global economic recovery. They welcomed the expansion of trade and investment among the BRICS countries and vowed to continue to work to further strengthen their economic relations. In this context, they reaffirmed their commitment to refrain from trade protectionist measures that are incompatible with WTO obligations, while respecting the special and differential treatment for developing countries.
Current state of play in the WTO and the way forward
3. The BRICS Trade Ministers noted the succesful outcome of the WTO Ministerial Conference held in Bali in December 2013. They undertook to pursue vigourously the achievement of the objectives and timelines set out in the Bali Ministerial decisions. They reaffirmed the importance of an open and rules-based multilateral trading system and underlined the central role of the WTO in setting rules for global trade.
4. The Ministers emphasized that the conclusion of the Doha Round on the basis of its development mandate remains central to the objective of promoting the full integration of developing countries into the global trading system.
5. The Ministers affirmed their commitment to coordinate efforts with a view to ensuring that the efforts to establish a work programme in the WTO will lead to a balanced, transparent, inclusive and development-oriented outcome in all pillars. The Ministers also reaffirmed that the work programme should reflect the centrality of agriculture and of the development dimension and the commitment to prioritise the issues where legally-binding outcomes could not be achieved at the Bali Ministerial Conference. The Ministers also noted the importance of NAMA and services and the need to work on the existing Doha texts.
BRICS cooperation on trade and investment matters
6. The Ministers noted that trade and investment make a vital contribution to the creation of jobs and to the promotion of strong, sustainable and balanced growth and development.
7. The Ministers welcomed the Joint Trade Study prepared by the Contact Group for Economic and Trade Issues (CGETI). The Study makes important recommendations for promoting value-added exports among our countries and ensuring that intra-BRICS trade is more sustainable. They have noted the Report and instructed the CGETI to continue working on its recommendations.
8. The Ministers took note of the discussions in the CGETI on a range of actions to foster economic cooperation and to promote trade and investment between the BRICS.
9. The Ministers endorsed the BRICS Trade and Investment Facilitation Action Plan developed by the CGETI. They noted that it built upon the BRICS Trade and Investment Cooperation Framework and encouraged BRICS members to implement it on a voluntary basis.
10. The Ministers reaffirmed the importance of a continued dialogue on international investment agreements. They noted the principles outlined in the document “A BRICS Perspective on International Investment Agreements” as a voluntary reference for countries to advance a more balanced approach to investment treaties.
11. The Ministers emphasized the importance of strengthening intra-BRICS cooperation in e-commerce, with a view to extending the opportunities for intra-BRICS trade and enhancing closer economic cooperation. They welcomed the proposal to establish a BRICS Expert Dialogue on Electronic Commerce. They instructed the CGETI to elaborate terms of reference for the Expert Dialogue.
12. The Ministers acknowledged the documents “BRICS Economic Cooperation Strategy” and “Framework of BRICS Closer Economic Partnership” and welcomed the efforts to establish guidelines for a coordinated approach to economic cooperation among the BRICS, especially on trade and investment.
13. The Ministers highlighted the potential for forging closer links between the Micro, Small and Medium Enterprises (MSME) of the BRICS. They instructed their officials to explore ways to promote cooperation in this field, such as sharing information on the MSME regulatory framework, promoting business to business contacts and identifying the appropriate institutional framework for MSME cooperation.
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Update on the Continental Free Trade Area (CFTA)
Document prepared ahead of the Seventh Conference of African Ministers in Charge of Integration (COMAI VII), taking place from 14-18 July 2014 in Ezulwini, Swaziland under the theme “Infrastructure for integration of Africa”.
PROGRESS REPORT ON THE CONTINENTAL FREE TRADE AREA
The 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union which was held in Addis Ababa, Ethiopia in January 2012 took a decision to establish a Continental Free Trade Area (CFTA) by an indicative date of 2017. The Summit also endorsed the Action Plan on Boosting Intra Africa Trade (BIAT) which identifies seven clusters; trade policy, trade facilitation, productive capacity, trade related infrastructure, trade finance, trade information and factor market integration. The CFTA will bring together fifty-four African countries with a combined population of more than one billion people and a combined gross domestic product of more than US $3.4 trillion. Such a market creates opportunities for scale production for producers in the continent. The Heads of State and Government demonstrated their commitment to fast tracking the establishment of the CFTA by requesting AU Ministers of Trade to prepare for the launch of the CFTA negotiations by 2015.
According to the World Trade Organisation (WTO) the level of intra-African trade in 2012 was 12.8% which is very low compared to other regions in the world. The share of Africa’s total exports in global trade flows is 3.5% which is also extremely low compared to other regions. An African exporter faces an average non-agriculture applied tariff protection rate of 7.8% which is higher than what the same exporter would face when exporting to Europe and the United States. Trade among Africa’s major economies which do not belong to the same Regional Economic Community is on the basis of the most favoured nation principle. This commercial reality of cross border trade in Africa simply demands that more be done in order to come up with a framework that provides for the reduction of tariffs, elimination of non-tariff barriers and a rules based mechanism for contract enforcement and dispute settlement among other things. The CFTA provides such a framework and is in line with the goal of the Abuja Treaty Establishing the African Economic Community.
In line with the strategic objectives of the Union’s Agenda 2063 Initiative, The CFTA provides a lever that can be used to strategically position the continent to exploit its numerous trade and investment opportunities and contribute positively towards the structural transformation of African economies. In the process of transforming Africa, the CFTA should contribute towards the creation of decent and gainful employment opportunities for African citizens. Overall, trade among African countries should contribute towards poverty eradication and have a positive impact on the lives of citizens.
The move to establish the CFTA comes at a time when seven of the world’s ten fastest-growing countries are in African and the continent also has a fast-growing middle class. Indeed, a lot of positive developments are happening across the continent and Africa is on the rise. It is therefore imperative that the CFTA is designed in such a way that it provides an opportunity to integrate the fragmented national markets into a functional continental market. Yet, pursuing market integration and leaving out important aspects such as trade facilitation, infrastructure and industrial capacity development will not yield the required results. African member states that implement the right policy mix should be able can take advantage of the trade and investment opportunities brought about by the growth that the continent is currently enjoying.
Pursuing the market integration agenda within the broader framework of a developmental regional integration strategy provides an opportunity in which the majority of AU member states can benefit from continental integration. To be able to benefit from continental market integration initiatives, there is need to deploy efforts towards the development of infrastructure, especially projects that enhance regional connectivity. There is also need to focus on ensuring that national productive capacity is enhanced taking advantage of regional and continental market access opportunities. It is equally true that the CFTA will comprise of members at different levels of economic development, hence the need to consider this factor in the principles and modalities of the negotiations.
Long-term success in market integration can be achieved through building globally competitive firms and industries. One of the key elements in developing competitive economies is that the services sector of the economy should function efficiently. In more than half of the countries in Africa, the services sector contributes on average 50% to (Gross Domestic Product) GDP. Most African countries have realised the role that the services sector can play in driving economic growth and employment creation. There is also a realisation that services such as telecommunications; transport, financial and business services are significant enablers in the movement of goods across borders. It is therefore important that the scope of the CFTA is broad enough to include rules and developmental aspects on trade in goods, trade in services, investment, competition policy, and competitiveness among other things. Taking into account the fact that in most African the informal sector is enormous, the CFTA should be designed in such a way that it provides opportunities for Small and Medium size Enterprises (SME’s) and also cater for the needs of informal cross-border traders.*
Work done by the Commission on implementing the January 2012 Summit Decision
The establishment of the CFTA and the implementation of the Action Plan on Boosting Intra-African Trade (BIAT) provide a comprehensive framework to pursue a developmental regionalism strategy. The former is conceived as a time bound project, whereas BIAT is continuous with concrete targets to double intra-African trade flows from January 2012 and January 2022. It is therefore imperative that at each level, Member States, RECs and the AUC efforts are undertaken to implement the Action Plan on Boosting Intra African Trade.
The African Union is the key institution in driving Africa’s Continental Free Trade Area (CFTA) initiative, with the Department of Trade and Industry having the primary responsibility for the CFTA within the AU Commission. The CFTA, to be negotiated by AU Member States, should be operationalized by the indicative date of 2017 based on the following appropriate milestones:
i. Finalization of the East African Community (EAC)-Common Market for Eastern and Southern Africa (COMESA)-Southern African Development Community (SADC) Tripartite FTA.
ii. Completion of FTA(s) by Non-Tripartite RECs, through parallel arrangement(s) similar to the EAC-COMESA-SADC Tripartite Initiative or reflecting the preferences of their Member States, between 2012 and 2014.
iii. Consolidation of the Tripartite and other regional FTAs into a Continental Free Trade Area (CFTA) initiative between 2015 and 2016.
iv. Establishment of the Continental Free Trade Area (CFTA) by 2017.
As part of the preparations for the launch of the CFTA Negotiations, the Commission has to date organised two Meetings of the Continental Task Force (CTF) on the CFTA. In line with its mandate, the CTF prepared technical documents that were used as a basis for strategic discussions on the CFTA during the Extra Ordinary Session of the Conference of African Union Ministers of Trade (CAMOT) that was held in April 2014.
The Commission working in collaboration with partners is in the process of establishing the African Business Council (ABC). The ABC will act as a necessary platform for aggregating and articulating the views of the private sector in continental policy formulation. The Commission is currently involved in some preparatory activities aimed at operationalizing the African Business Council. It is expected that the African Business Council will be operationalized by 2015.
To ensure effective monitoring and evaluation of the implementation of the Action Plan for Boosting Intra-African Trade, the Road Map and the Decision of Summit on the CFTA, a Trade Observatory will be established. The main functions of the Observatory will be to collect information from member states on goods and services trade and industry statistics and information on trade. It will also provide analysis and publish and disseminate such information. The Commission is currently working with partners to operationalise the Trade Observatory by 2015.
Multiple stakeholders are required for the successful negotiation and implementation of the CFTA. These include the private sector, civil society, parliamentarians, academia among others. The African Trade Forum (ATF), which is organised jointly by the AUC and UNECA, was established with a view to create a platform for various stakeholders to reflect and discuss on the progress and challenges of continental market integration. So far, the ATF has been organised twice in 2011 and 2012. Plans are underway to organise the 3rd ATF in 2014 before the Conference of African Union Ministers of Trade.
Ultimately, it is the private sector that will make use of the CFTA, it is therefore important that they are part of the negotiation process. In view of the importance of the private sector in driving regional trade integration in the continent, there is merit in maintaining dialogue between the private and public sector. The private sector should be involved in the process of CFTA negotiations at all levels, national, regional and continental at its initial phases.
Work Plan for the year 2014 on the CFTA
The Extra Ordinary Session of the Conference of African Union Ministers of Trade (CAMOT) endorsed the Work plan for the Department of Trade and Industry for the preparatory phase of the CFTA negotiations. The main work streams identified in the work plan are as follows;
i. Organisation of Regional Consultative Meetings
ii. Commissioning studies and preparing technical documents for the CFTA negotiations
iii. Publicity Campaigns and Communication on the CFTA
iv. Stakeholder engagement events with particular focus on the private sector and parliamentarians.
v. Capacity Building activities for the RECs and Member States
vi. Establishment of the African Business Council and the Trade Observatory
Regarding trade in services, the AUC has commissioned five (5) case studies in Banking Services in Nigeria, Air Transport services in Ethiopia, Business Processing Outsourcing (BPO/ICT) Services in Senegal, Education Services in Uganda and Cultural Services in Burkina Faso with the view of collecting information on best practices on successful service exports. The results of these studies so far suggest that the Service sector is an important opportunity for African countries especially landlocked countries and small island states to benefit and participate meaningfully in continental and global trade.
* 60-70% of African families are in the Informal Sector, and this could explain the reported low levels of intra-Africa Trade that exclude the informal sector.
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WTO members work to bridge trade facilitation divide ahead of July deadline
The divide among WTO members over the implementation of the new Trade Facilitation Agreement (TFA) has continued to persist in recent weeks, despite an end-July deadline to agree on a protocol of amendment that would bring the deal into the organisation’s overall legal framework.
The TFA was the centrepiece of the so-called Bali package. Agreed by trade ministers at the WTO’s latest ministerial conference in December, the package was the organisation’s first global deal in nearly two decades. The Trade Facilitation Agreement itself aims to simplify customs rules and reduce inefficiencies that create long lag times in cross-border flows of trade, with some estimates placing the potential GDP gains at up to US$1 trillion.
Though the deal was hailed at the time as a significant advance for the global trade club, efforts to bring the TFA into force hit a snag in May, after members disagreed on whether it should be implemented on a provisional basis, pending the conclusion of the overall Doha Round.
The coming weeks will be decisive in solving the remaining issues, as WTO members have given themselves until 31 July to adopt the protocol of amendment. The pact will then be open for ratification until 31 July 2015, with two-thirds approval of the membership required for the pact to enter into force.
Ambassador Esteban Conejos of the Philippines, who chairs the Preparatory Committee on Trade Facilitation, reportedly urged members last week to continue their efforts on finding a compromise in time for a meeting scheduled this coming Thursday.
This, he reminded members, would enable them to adopt the protocol at the next meeting of the WTO’s General Council, which is currently set for 24-25 July.
“Provisional implementation” debate
The disagreements came following a conference of African Union trade ministers in April, where the African Group was directed to present language suggesting that the TFA be implemented on a provisional basis, in line with paragraph 47 of the Doha Declaration.
This suggestion was included in a paper presented by Lesotho on the African Group’s behalf in May in Geneva. At the time, the group indicated that the TFA should later be reviewed for balance with the rest of the Doha Round areas, once these are resolved. This, they said, would be in line with the WTO principle of the “single undertaking.”
The African Group’s suggestion was lambasted at the time by several fellow WTO members, who warned against revisiting what was agreed in Bali. These members have said that doing so could risk jeopardising the process currently underway to develop a Doha Round “work programme” by year’s end.
“If the Trade Facilitation agreement unravels, it’s hard to imagine a post-Bali work plan proceeding,” said Michael Punke, the US Ambassador to the WTO, at last month’s meeting of the organisation’s Trade Negotiations Committee.
“Anything short of what is foreseen in the relevant Bali decision will very seriously undermine any existing momentum… on post-Bali,” said Angelos Pangratis, the EU Ambassador to the WTO, at the same meeting.
African leaders shifting position?
African Union leaders have since appeared to be changing their tone, saying in recent weeks that they are willing to implement the Trade Facilitation Agreement in line with the decisions reached in Bali. The decision was reportedly made at the African Union Conference in Malabo, Equatorial Guinea, on 26-27 June.
During the meeting, countries such as Nigeria and Mauritius were among those who refused to join the previous consensus among African trade ministers to implement the TF agreement on a provisional basis. Sources familiar with the deliberations say that some other African countries then followed suit, also withdrawing their support for the April declaration.
The new African Union Heads of State draft decision reached in Malabo – a copy of which has been seen by Bridges – instead “reaffirms commitment to the Doha Development Agenda and to its rapid completion in accordance with its development objectives.”
Furthermore, the African Union has also reiterated its commitment to “all the decisions the Ministers took in Bali which are an important stepping stone towards the conclusion of the Doha round… to this end, leaders acknowledge that the TF agreement is an integral part of the process.”
Some officials, however, have claimed that the change in position was the result of undue pressure from some developed countries, with Nelson Ndirangu, Director for Economics and External Trade in the Kenyan Foreign Ministry, telling the IPS news agency that there was “unprecedented pressure and bulldozing to change the decision reached by the African trade ministers on April 27.”
Trade sources indicate that some United States lawmakers had reportedly expressed scepticism about renewing the African Growth and Opportunity Act – a unilateral and non-reciprocal trade pact that offers duty and quota free access to certain goods from Sub-Saharan Africa into the US market – should the disagreement on TFA persist. The US legislation, known also as AGOA, is set to expire in September 2015.
Uncertainty ahead
Despite the apparent shift in the African Group’s position, resistance toward the trade facilitation pact has since emerged from other quarters, namely from India, which said last week that it will only allow the TFA process to advance if it sees its own concerns on food security addressed.
Meanwhile, sources have said that Tanzania, Uganda, Zimbabwe, the Solomon Islands, and South Africa are among those members who still support the provisional application of the agreement based on the single undertaking.
WTO members, South Africa said at the latest TNC meeting, should aim “to implement all decisions of the WTO Ministerials and not to cherry pick those which advance their interests,” according to a copy of their remarks seen by Bridges.
Balance of interests
Since the Bali package was agreed upon last December, critics have pointed to the “best endeavour” nature of some of the decisions taken, particularly regarding some of the development-related components of the deal.
Along with the Trade Facilitation Agreement and a few agriculture-related decisions, ministers in Bali had also signed off on decisions involving least developed country concerns (LDC), such as duty-free and quota free market access, preferential rules of origin, and a waiver that would allow for preferential access to services from these poorer nations.
Experts note, however, that given the complex and the political nature of the above-mentioned issues, the Bali decisions represent a significant outcome that should put in motion a process which will benefit the LDCs.
The TFA itself has been criticised by some developing countries since its adoption in Bali, with those countries arguing that it primarily benefits their developed trading partners. Observers note, however, that several proposals were tabled on special and differential treatment reflecting the actual gap between developed and developing countries.
The African Group proposal for the TFA’s provisional application came as the result of concerns over ensuring that development issues are fully addressed in the future negotiations on the Doha work programme.
“[The Bali outcomes] were not the most optimal decisions in terms of African interest…we have to reflect and learn from the lessons of Bali on how we can ensure that our interests and priorities are adequately addressed in the post-Bali negotiations,” said African Union Trade Commissioner Fatima Acyl during the April trade ministers’ meeting.
Capacity-building, technical assistance
In Malabo last month, African leaders reiterated that assistance and support for capacity building should be provided as envisaged in the TF Agreement “in a predictable manner”, in order to help African economies acquire the necessary capacity to implement its requirements.
“For the first time in WTO history, implementation of an [Trade Facilitation] agreement is directly linked to the capacity of the country to do so,” said WTO Director-General Roberto Azevêdo last week at a Forum on Industrialisation and Inclusive Development in Africa.
Azevêdo explained that TF would support regional integration, facilitate integration in the global value chains and as such, give impetus for industrialisation and inclusive sustainable development.
Furthermore, Azevêdo explained, the TFA provides that not only must a country have the necessary capacity before implementing the agreement’s provisions, but that technical assistance and support must be provided to help these countries achieve that capacity.
“Moreover, developing countries and LDCs can determine for themselves when they have the capacity to implement each of the trade facilitation measures of the Agreement,” he added.
The WTO chief has backed the idea of establishing a new facility dedicated to TFA-related technical assistance and capacity building support, a suggestion that was reportedly backed during last week’s Preparatory Committee meeting by Lesotho on the African Group’s behalf.
The creation of a fund, Lesotho said, will help build confidence among the membership, while confirming donors’ intention to help developing countries acquire implementation capacity.
As per the terms of the Trade Facilitation Agreement, African countries will have to specify their capacity building needs in order to undertake specific reforms.
Industrialisation needs effective pan-African parliament
It is in the hands of the continent to initiate its own strategies to promote intra-Africa trade and industrialisation, writes Zwelethu Madasa.
On November 20 each year the international community celebrates Africa Industrialisation Day. It is time when governments and other organisations examine ways to stimulate Africa’s industrialisation process.
It was at the 25th ordinary session of the Assembly of Heads of State and Government of the Organisation of African Unity (OAU), held in Addis Ababa, Ethiopia, in July 1989, that November 20 was declared Africa Industrialisation Day.
On December 22, 1989, the UN General Assembly also proclaimed this date Africa Industrialisation Day. This is not a public holiday, but a day of global observance. This year the UN Industrial Development Organisation marked Africa Industrialisation Day for November 22 with the theme “Job creation and entrepreneurship”.
It is no coincidence that industrialisation and intra-Africa trade were both estimated at 12 percent in Africa. There would be no meaningful industrialisation without increased intra-Africa trade. All African countries, for historical reasons of colonialism, are trading with the north rather than with each other or with Asia.
Now, with the strong emergence of China as a strong global economy, that is somewhat changing.
Many commentators have correctly identified myriad obstacles to African industrialisation and intra-Africa trade, ranging from poor infrastructure to bad governance, conflicts, and so on.
However, little attention has been paid to the fragmented nature of the legal framework that is necessary to create a conducive climate for sustainable investments in Africa. Many countries in Africa either have no laws that govern how industries could be established and developed, or the regulatory framework that exists is radically different from country to country, making it difficult to establish industries with a continental market in view.
When we talk about African industrialisation we have to do so in the context of economic integration and not look merely at individual countries in Africa.
Africa’s industrialisation ought to facilitate more integration for economies of scale and shared development benefits.
Any development that has a consequence of reconfiguration of Africa’s political landscape, albeit unwittingly, will be detrimental to the continent’s long-term developmental goals.
The Pan-African Parliament (PAP), as a continental parliamentary body established to promote popular participation in AU affairs, is the suitable vehicle to harmonise the legal framework in the different member states of the AU.
Many potential investors in Africa require a predictable regulatory framework that protects investments in a harmonised way across African political borders for easy market access and sustainable investment.
The PAP has a mandate in accordance with its founding protocol to facilitate sustainable investments in Africa through harmonisation of laws and building capacity of national and regional parliaments to enact laws that will foster Africa’s industrialisation and intra-Africa trade.
Only this past week, the Assembly of Heads of State and Government during the 23rd AU Summit in Malabo, Equatorial Guinea, approved the revised protocol of the PAP. The protocol transforms the PAP from an advisory and consultative body to a legislative body of the continent with competence to legislate for the states in areas determined by the Assembly of Heads of States and Government.
The approval of the revised protocol will empower the continental parliament to contribute to the integration of the continent by proposing model laws that would facilitate free movement of goods, services and people across the continent to ease intra-Africa trade.
Greater intra-Africa trade is an essential condition for increased manufacturing and employment to eradicate poverty.
With this historical decision, nothing precludes the PAP from proposing draft model laws for adoption by the assembly of the AU in defined areas that would facilitate Africa’s industrialisation and intra-Africa trade.
For, example, the New Partnership for Africa’s Development (Nepad) heads of state meeting has in the past agreed to designate certain countries as champions to promote specific Nepad projects.
South Africa is the champion of rail and road infrastructure from Cape to Cairo, Nigeria is the champion of the gas pipeline from Nigeria to Algeria and Rwanda is the champion of information and communications technology development in Africa, among other champions. It is trite that these projects will require regulatory reforms to be able to be implemented, including public consultation to promote ownership by the people.
Only parliaments at national, regional and continental level, as representatives of the people, could effectively facilitate the implementation of these Nepad projects that are critical for Africa’s industrialisation and job creation.
The PAP has 10 thematic committees that mirror those at national level. The PAP, in collaboration with the current leadership of the AU Commission, has agreed to align these committees to the mandates of the departments of the commission.
Therefore, there is now a sufficient framework for the PAP, in collaboration with the departments of the commission and relevant standing committees at national and regional parliament, to propose model laws that would accelerate the implementation of Nepad projects. The committee of PAP on communications, especially the members of parliament from Rwanda, could do a follow-up on what the obstacles are that have delayed the government of Rwanda in initiating work to start its Nepad undertakings. The committee on infrastructure could discuss ways to draft a model law to facilitate the building of the bridge over the Congo River linking Kinshasa to Brazzaville, another Nepad project.
The committee of the PAP on infrastructure working with its South African Parliament counterpart could monitor the implementation of the Nepad project Pretoria is championing.
The implementation of all these projects is a matter of initiatives and, if started, it could trigger many prospects for industrialisation and intra-Africa trade.
There are also many international and bilateral agreements concluded by the AU Commission and external governments designed to spur industrialisation in Africa.
The PAP Committee on International Relations could initiate a study of these agreements by research institutions and look at ways that they could be unlocked to promote Africa’s industrialisation.
The PAP could also monitor the implementation of AU decisions that are a catalyst to trigger increased industrialisation.
For example, the Maputo decision that requires member states of the AU to designate 10 percent of their GDP to agricultural initiatives could go a long way to promote industrialisation in agriculture if implemented.
There are also many bilateral agreements between member states of the AU that are not implemented, but could encourage increased industrialisation. For example, in the early 2000s, the governments of Botswana and South Africa indicated that they had agreed to ensure that diamonds are polished in Africa instead of exclusively in India, to promote industry and job creation in this sector.
There are no signs that this agreement was implemented, as diamonds are still polished almost exclusively in India and not in Botswana, Namibia, Angola, DRC, Zimbabwe or South Africa.
The absence of serious efforts by the AU member states to initiate beneficiation projects from natural resources is a major obstacle to industrialisation in Africa.
The PAP and counterpart parliaments have a huge role to monitor these agreements for effective implementation. However, the PAP will require serious efforts of collaboration with institutions of research to have capacity to do this enormous task.
While Africa should welcome serious deliberations and statements of support from the international community for Africa’s industrialisation, we should not lose sight that countries are not in the business of moral support towards Africa, but are pursuing their national interest.
Evidently, the spirit of international human solidarity has dwindled in the 21st century and the global economic crisis has not made things easy for Africa.
Therefore, it is in the hands of the continent to initiate its own strategies to promote intra-Africa trade and industrialisation. It seems counterproductive for member states of the AU, for example, to develop national plans for development, without a strong link to regional and continental economic integration strategies.
South Africa, in particular, has an important role to discourage investors from using it as merely a stepping stone towards accessing the continental market.
Pretoria should adopt a robust approach to plan in such a way as to integrate its development goals to the regional and continental economy shared development. The South African economy, though a giant in Africa, is insignificant alone in the global economy.
However, our national economy is a critical engine for growth in the context of the regional and continental economy if it is fully integrated with the continent.
PAP’s new assignment of legislative powers must propel it to start its role to develop model laws to promote Africa’s industrialisation. The AU has a duty, though, to assist the PAP by assigning more powers in agreed areas to ensure increased harmonisation of the legal framework across borders within Africa.
Advocate Madasa is secretary-general of the Pan-African Parliament. He writes in his personal capacity.
The views expressed here are not necessarily those of Independent Newspapers.
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Enhance integration: Mujuru
Sadc countries should standardise their labour practices to enhance regional economic integration and improve the lives, Vice President Joice Mujuru has said.
She made the remarks yesterday while opening the Sadc extraordinary meeting of ministers and social partners responsible for employment and labour.
“There is need, therefore, to work towards the standardisation of labour practices in the region. I am convinced that standardisation of labour practices across the region can be the foundation towards economic integration, since labour and capital are inseparable factors of production,” said VP Mujuru.
She said the region’s labour markets were the same, making integration more compelling.
“So let’s break the convention practices and let labour lead with capital following,” she said. “I have a firm relief honourable ministers and representatives of social partners that the employment and labour sector is better positioned to be the champion for regional integration,” she said.
VP Mujuru urged the ministers and social partners to prioritise issues of youth employment.
She said Government attached great importance to Sadc and said it would continue to play a befitting role in supporting the labour and employment sector.
VP Mujuru commended the International Labour Organisation for its co-operation and assistance to Zimbabwe through a programme called Training for Rural Economic Empowerment.
ILO assistant director general and regional director for Africa Mr Aeneas Chuma, commended the ministers and social partners for promoting regional integration.
He encouraged governments and social partners to promote policies that facilitate the creation of decent jobs for youths and women.
“Unless bold actions are taken, Africa’s youth could become a recipe for social and political instability as witnessed in other countries,” he said.
Public Service, Labour and Social Welfare Minister Cde Nicholas Goche said SADC could not develop without productive and thriving private sectors and a vibrant labour movement.
He called upon the ministers and social partners to contribute to the finalisation of the Regional Indicative Strategic Development Plan which, once adopted, would be a blueprint for the next five years.
ILO and International Organisation for Migration regional director for Southern Africa, Mr Bernado Mariano, also said his organisation was keen to support the implementation of the policy framework.
He urged member countries to continue working together and identify comprehensive solutions to a wide range of labour migration and related challenges.
More than 150 local and foreign delegates among them 10 ministers of labour, permanent secretaries, directors, senior labour officers, leaders of the employers’ confederation of Zimbabwe and president of the Zimbabwe Congress of Trade Unions are attending the meeting.
Other participants are from Southern African Trade Union Co-ordinating Council and Sadc Private Sector Forum.
The official opening was also attended by Matabeleland North Minister of State for Provincial Affairs Cde Cain Mathema and other senior Government officials.
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The 23rd Ordinary Session of the African Union ends in Malabo
The 23rd Ordinary Session of the Summit of the African Union concluded in Malabo, Equatorial Guinea on 27 June 2014. The summit’s Assembly, comprising Heads of State and Government of the African Union, was held from 26-27 June 2014.
In their Assembly organised under the theme: “2014 Year of Agriculture and Food Security”, the Heads of State and Government adopted a number of key decisions with a view to enhancing the socio-economic and political development of the continent, notably in the areas of education, health, agriculture, trade, women and youth development.
The Assembly adopted the AU Budget for 2015 which amounts to a total of US$ 522,121,602, including US$ 142,687,881 for operational costs and US$ 379,433,721 for programmes.
The Assembly received an update report on the development of Agenda 2063: the fifty year vision for Africa. The popular version of Agenda 2063; the Africa we Want was tabled, and the Assembly instructed the Commission and the NEPAD Agency, together with the UNECA, the African Development Bank to popularise it widely and solicit further inputs from the African citizenry. Member states who have not yet made their submissions on Agenda 2063, further undertook to have national consultations and submit inputs on behalf of their countries as soon as possible.
The Assembly further mandated the AU Commission to explore Agenda 2063 flagship programmes, such as the Continental Free Trade Area, free movement of people, the continental integrated high speed rail network, and to report to the Summit in January 2015. The Summit in January 2015 will also adopt Agenda 2063 and its first ten year plan.
The Assembly adopted the Protocol and the Statute for the Establishment of the African Monetary Fund. It further called on Member states to sign and ratify that Protocol as expeditiously as possible, for its early entry into force.
Regarding the Post-2015 Development Agenda, the Assembly considered the report of the High Level Committee (HLC) on the Post 2015 development agenda and requested Member States to mobilize together, to ensure that the agreed Common African Position (CAP), which is to eradicate poverty in all its forms, is the key message for all African representatives in the intergovernmental negotiation process on that crucial subject for Africa. In this regard, the Assembly mandated the HLC to coordinate Member States with the support of the secretariat and in collaboration with partners and other relevant African stakeholders, as Africa engages in the negotiation process with the rest of the world on CAP.
The CAP will serve as the basis for Africa’s input at the global level into the on-going post-2015 sustainable development intergovernmental deliberations, including the work of the Open Working Group on Sustainable Development Goals (SDGs), the Intergovernmental Committee of Experts on Sustainable Development Financing and the final phase of intergovernmental negotiations on the post-2015 development agenda. The assembly further requested Member States to enhance their statistical capacity to enable them to effectively monitor progress in the implementation of the Post-2015 Development Agenda, and urged them to speedily ratify the African Charter on Statistics.
» Decision on Post-2015 Development Agenda
The Assembly called for the enhancement of the Pan African Productivity Association, to provide it with the capacity enabling it to act as a regional think tank, catalyzer, research and knowledge developer and policy adviser on productivity at the continental level. Additionally, it called for the establishment and enhancement of productivity organizations at national and regional levels, which would eventually become members of the Pan African Productivity Association.
The Science, Technology and Innovation Strategy for Africa 2024 (STISA-2024) was adopted as the continental framework for accelerating Africa’s transition to an innovation-led, knowledge-based economy within the overall framework of the AU Agenda 2063.
Similarly, the Statute of the African Observatory on Science Technology and Innovation (AOSTI) was considered, with the Heads of State and Government calling upon Member States and development partners to avail the necessary technical and financial support for sustaining the AOSTI. Further, the Assembly, while recognizing ARIPO and OAPI as building blocks of the Pan African Intellectual Organization (PAIPO), welcomed and endorsed the offer of Tunisia to host the Headquarters and Secretariat of the PAIPO.
The Assembly, while considering the Report of the High Level Committee on African Trade (HATC), directed the AU Commission to prepare Draft Terms of Reference of the Continental Free Trade Area (CFTA) Negotiating Forum based on best practices in the regional economic communities (RECs)/Tripartite, refined draft Guiding Objectives and Principles as well as Institutional Arrangements to be submitted to the next AU Trade Ministerial Conference for consideration, along with other negotiation-related issues, and subsequent endorsement by the Assembly in January 2015 so as to facilitate the effective launching of the CFTA negotiations in June/July 2015. In this regard, the Assembly called upon Member States to maintain the momentum to fast track the establishment of the Continental Free Trade Area (CFTA) as scheduled by providing the necessary financial and technical resources at national, regional and continental levels.
» Decision on the report of the High Level African Trade Committee on Trade Issues
On climate change, the Assembly considered the Report of the Committee of African heads of State and Government on Climate Change (CAHOSSC) and endorsed the Framework Work programme on Climate Change Action in Africa as a continental framework that will guide the African Union, its Member States and the RECs in addressing climate change in the near future. It further reaffirmed that adaptation is a priority in all actions on Climate Change in Africa.
In this regard, the Assembly urged all Member States to urgently complete the development of their National Adaptation Plans (NAPs), and put in place systems and structures for Africa to take full advantage of the global mechanisms in support of climate change mitigation and adaptation measures. The Assembly moreover took note of the global events on climate change to be convened by the UN Secretary General in the months ahead, notably in New York on 23 September 2014 and in Lima, Peru in December 2014.
The Conference of Ministers in charge of Information and Communication Technologies (ICTs) and the Conference of Ministers of Communication, with the participation of national and international regulatory entities for the broadcasting sector, were directed to take up the issue of migration from analogue radio/television broadcasting to digital transmission, and to work in concert to protect the interest of the public broadcasting services of the AU Member States.
The Commission, in collaboration with the African Union of Broadcasting and the African Telecommunication Union (ATU) was requested to expeditiously establish an African Technical Committee for the Information and Media Society, to accompany Member States in their transition to full digital broadcasting, while at the same time stimulating economic recovery in Africa.
The offer by Togo to host a Regional Conference on Maritime Piracy and other Criminal Acts Committed at Sea was welcomed and as such, Member States and their appropriate Administrations, Regional Economic Communities and Regional Mechanisms, African and International Institutions specializing in maritime and related activities, as well as development partners, were encouraged to participate actively in the Conference when it is convened.
Heads of State and Government at the Malabo Summit also adopted some declarations related to accelerated agricultural growth and transformation for shared prosperity and improved livelihoods; ending preventable child and maternal deaths in Africa; support of small island developing states ahead of the third international conference on small island developing states; and nutrition security for inclusive economic growth and sustainable development in Africa. The Assembly also adopted a Resolution calling for the lifting of embargo of the USA against the Republic of Cuba.
Finally, the Assembly agreed to hold its 24th Ordinary Session at the AU Headquarters in Addis Ababa, Ethiopia, on 30-31 January 2015 under the theme: “Year of Women’s Empowerment and Development towards Africa’s Agenda 2063”.
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BRICS fight waning clout with $150 billion deal in Brazil Summit
The leaders of five of the world’s largest emerging markets will showcase a new currency reserve fund and development bank this week. Critics say neither is enough to revive the group’s waning clout.
Brazil, Russia, India, China and South Africa, known as the BRICS, will approve the creation for the $100 billion reserve fund and $50 billion bank at a July 15-16 summit in Brazil’s coastal city of Fortaleza and the capital Brasilia.
The initiatives are born out of frustration with a lack of participation in global governance, particularly in the World Bank and International Monetary Fund, said Arvind Subramanian, senior fellow at the Peterson Institute for International Economics. The measures aren’t big enough to boost growth or cohesion in the group as foreign investor sentiment sours and member states focus on issues close to home, such as Brazil’s elections, the conflict in Ukraine and new economic policy plans in India.
“It’s hard to see a lot of impetus at this stage for the BRICS in general and for these initiatives in particular,” Subramanian said by telephone from Washington. “There’s going to be a lot of attention on domestic issues.”
Economic growth in the five countries is projected to average 5.37% this year, half the pace seen seven years ago, according to the median estimate of economists surveyed by Bloomberg. Brazil and Russia will grow 1.3% and 0.5%, respectively.
Common Policy
Yuri Ushakov, Russian presidential aide on foreign policy, said in an interview that the group’s growth rate is still above that of the global average and that its economic and political weight is increasing.
The BRICS have evolved from the original term coined in 2001 by then-Goldman Sachs Group Inc economist Jim O’Neill to describe the growing weight of the largest emerging markets in the global economy. In 2011, South Africa joined to give the BRICS a broader geographic representation. The group’s track record in pursuing a common agenda on the world stage has been mixed.
“It’s easier to say what the BRICS aren’t than what they are,” said Jose Alfredo Graca Lima, under-secretary for political affairs at the Brazilian Foreign Ministry.
The five countries failed to agree on a candidate to head the World Bank in 2012 and the International Monetary Fund in 2011, two posts at the heart of their demands for more say in global economic matters.
Trade Policy
The summit is unlikely to provide a common front to push ahead global trade talks either, even though the World Trade Organisation (WTO) is headed by Brazilian Roberto Azevedo. Brazil itself has increased protectionist measures under President Dilma Rousseff.
“I wouldn’t say that there will be a common outcome in that sense, but certainly there will be discussion on WTO matters,” said Sujata Mehta, secretary for economic relations at the Indian Foreign Ministry.
India and South Africa have signalled they may backtrack on a trade facilitation agreement reached at the WTO talks in Bali in December 2013, wrote Carlos Braga and Jean-Pierre Lehmann, professors at Lausanne, Switzerland-based IMD business school.
Still, Indian Prime Minister Narendra Modi is unlikely to rock the boat at the Brazil summit, said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a government-backed research institute in New Delhi.
“Domestic issues are dominating his agenda, especially growth and inflation,” Bhanumurthy said.
‘Sanction Pressure’
Russia expects BRICS leaders to discuss international issues, including the situation in Ukraine, and speak out against “sanction pressure,” Ushakov told reporters July 10.
All BRICS members except for Russia abstained from a UN vote that called on states not to recognise Crimea’s autonomy from Ukraine. Rousseff yesterday hosted a luncheon for leaders watching the World Cup final in Rio de Janeiro, including Russia’s Vladimir Putin and Germany’s Angela Merkel.
The new development bank, which won’t impose policy requirements on borrowers, will help fill fast-growing infrastructure financing needs, said Kevin Gallagher, professor of international relations at Boston University. The BRICS can also use it to pressure developed countries, particularly the US, to advance stalled measures to make global financial institutions more equitable, he said.
“They can say, ‘look, we have an alternative,’” Gallagher said in a phone interview. “It gives you a lot of political leverage.”
With an expected startup capital of $50 billion financed equally by the five members, the bank could lend $3.4 billion per year in a decade, according to a March study by the United Nations Conference on Trade and Development. That compares with the $61 billion the World Bank expects to lend this year.
Asian Bank
The bank will require legislative approval from member countries and at least one year to be implemented. It will eventually open membership to non-BRICS countries and coincides with plans for an Asian infrastructure development bank spearheaded by Beijing, according to an official at the Brazilian Finance Ministry, who requested not to be named because he’s not authorized to speak publicly on the matter.
The BRICS bank, along with the separate $50 billion Asian infrastructure bank, is another way for China to get higher returns on its $3.9 trillion reserves than it does from buying US Treasuries, said Oliver Rui, professor of finance and accounting at the China Europe International Business School in Shanghai, the favourite city to headquarter the bank.
Multilateral lending agencies are also a way for Beijing to legitimise investments abroad, after nationalistic backlashes in Africa against Chinese investment, said Subramanian.
China’s Finance Ministry did not respond to faxed questions for comment about the BRICS bank.
Currency Agreement
China will also fund $41 billion of the currency reserve agreement, which member countries will be able to tap in case of balance of payment deficits. South Africa will earmark $5 billion of its reserves and the remaining countries will set aside $18 billion each. Details on the functioning of the $100 billion agreement, which amounts to 2 % of the BRICS’ pooled reserves, have yet to be worked out.
The Brazilian real is the second-best performer this year with a 6.35 % gain, and the rand the second-worst among 16 major currencies tracked by Bloomberg with a 2 % loss. The rupee has gained 3.1 % and the ruble has lost 3.95%.
Each country would have a limited amount of cash it could draw on from the currency reserve, and lenders have an opt-out clause, allowing them to drop out of the agreement any time, according to the Brazilian official.
“There are many unanswered questions still,” said Domenico Lombardi, director of global economy at the Waterloo, Ontario-based Centre for International Governance Innovation. He said in a telephone interview, “The measures are more symbolic, designed to show they have alternative instruments to the IMF and World Bank.”
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BRICS must score a goal in Fortaleza
Brazil may quite appropriately be the place for BRICS to score a much-needed winning goal. That could be in the form of an announcement of the launch of the BRICS Development Bank or the Contingency Reserve Arrangement of $100 billion as a safety net during a crisis. The business community will also be looking forward to concrete steps towards executing some of the recommendations put out by the BRICS Business Council. The point is that there needs to be forward movement to propel BRICS into a higher orbit. This is the expectation with which members of the business fraternity will be travelling to Fortaleza, Brazil, to join for the BRICS business engagements in a few days from now.
Last year in Durban, South Africa, the BRICS Business Council was launched. Focused working groups have been formed to provide specific inputs in areas that hold maximum potential in the spirit of ‘together we can’. The ideas flowing from here hold a lot of promise. Here are a few of the suggestions and actions that need to be taken.
First, entrepreneurs can conduct business only when it is easier to interact with each other and there is a well-lubricated financial system to provide support. It is important that governments work out an arrangement that would facilitate long-term visas for business travellers.
Second, getting the right information into the evolving policies and projects is critical. Here, the Center for BRICS Studies at FUDAN University, China, is identified as the platform for the BRICS Business Portal. We hope that with time, this will evolve into a rich repository of information that businesses seek when they scout for both trade and investment leads.
Third, while more information and insights will create more business opportunities, we can give further impetus to this by encouraging intra-BRICS trade using local currencies. Fourth, our institutions should work together, carry out pragmatic cooperation on syndicated loans, co-financing, trade financing and sub-loans and provide a stronger impetus to overseas market expansion.
In the infrastructure space, there is a lot to learn from each other. Urban infrastructure, transportation, high-speed railways, locomotive manufacturing, port construction and operations are the key areas that have come into focus in the discussions.
In the financial services sector, adequate emphasis must be laid on promoting the funding requirements of the SME sector and how development finance institutions can support industrial and infrastructure investments.
In the area of energy and green economy, our colleagues have highlighted the need to have a robust information base for a clear understanding of the energy sector in BRICS countries and for this they have suggested the possibility of setting up a BRICS Energy Data Centre.
We must look at sharing experience in ‘Training the Trainers programs’, establishing centres of excellence; and supporting capacity building in institutions. Also, steps must be taken to establish equivalence levels between standards for skill training and development in BRICS countries by working with standards-setting agencies.
To achieve the goals the BRICS Business Council has set for itself, a strong partnership between industry and government is a must. We may have set an ambitious agenda, but have the spirit, commitment and trust among our countries and its leaders that can ensure that we move ahead unhindered and write a fresh script for the BRICS story.
Onkar S Kanwar is chairman, BRICS Business Council (India) and CMD, Apollo Tyres Ltd
The views expressed by the author are personal
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UN official urges ‘bold, challenging’ talks during forum on development cooperation
Development cooperation will “undoubtedly” play an important role in supporting the implementation of the post-2015 development agenda, but to do so, it must adapt in real time to new parameters, said the President of the United Nations Economic and Social Council (ECOSOC) on 10 July 2014.
Opening the 2014 session of the Development Cooperation Forum (DCF), which will focus on the theme, “Bringing the future of development cooperation to post 2015”, Martin Sajdik called on participating representatives and experts to be “bold, challenging and focused” during the Forum’s two-day meeting.
He called the Council a platform that brings everything together for a unified dialogue on sustainable and inclusive development. The 54-member body is the principle UN organ for coordination and policy formulation on all three pillars of sustainable development: economic, social and environmental.
Meeting every two years, the Forum reviews trends in international development cooperation, promotes greater coherence among the development activities of different development partners and helps to promote policy integration and to strengthen the normative and operational link in the work of the UN.
The Forum gives voice to a wide range of stakeholders, including developing and developed countries as well as civil society, parliamentarians, audit institutions, local and regional governments, philanthropic organizations and the private sector. The body also encourages participatory multi-stakeholder dialogue on major development cooperation issues.
In his remarks on the Forum’s theme, Mr. Sajdik stressed the need to find solutions to the multiple dimensions of poverty that are inclusive of all development actors. That must occur through open dialogue, sharing of knowledge and experience, guided by analysis of recent trends and progress in development cooperation. Throughout the two-year preparatory process for the 2014 DCF, the Council has advanced an inclusive, global approach to development cooperation that fits both the scale and scope of action required for the post-2015 era.
Working towards the UN’s 0.7 per cent official development assistance (ODA) target remains critical, he told the Forum. Yet, even if met, ODA commitments would still fall far short of what will be needed to support implementation of the global development agenda.
Other sources of financing must be explored, he urged members. Domestic resource mobilization, a renewed global partnership for development and the participation of the business sector are essential. A renewed partnership for development must bring together the Monterrey [2002 International Conference on Financing for Development] and the Rio+20 [United Nations Conference on Sustainable Development] tracks.
Looking ahead to the post-2015 era, Mr. Sajdik said the Forum will be well-positioned to review the development cooperation aspects of a renewed global partnership for development and to continue reviewing national mutual accountability and transparency.
The next two days are the last occasion to look back on the role of various stakeholders in development cooperation before the Open Working Group on Sustainable Development Goals and the Expert Committee on Sustainable Development Financing will each conclude their work, he said.
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Promoting regional integration through trade
To complement the role of Nigeria Export Import Bank as a member of the Trade Facilitation Task Force, whose mandate is to improve Nigeria’s ranking on “Trading Across Boarders”, the bank partners with the Borderless Alliance, a private sector-led partnership in collaboration with USAID/West African Trade Hub and other stakeholders.
The aim of the Borderless Alliance is to promote regional integration and seamless Trade in West Africa by addressing the problem of non-tariff barriers through policy advocacy and effective engagement.
Exporters are provided with pertinent information to assist, and also act as collation center for trade data to support evidence-based research and policy advocacy. The Bank has continued to embark on a number of initiatives in support of the Transformation Agenda of the Federal Government of Nigeria.
Obviously, this integration ought to have delivered on the purported mandate of the bank if goals and objectives in the public sector are pursued with utmost commitment and patriotism to boost the nation’s economy.
Perhaps, it is government business so its no body’s business, contrary to envisaged gains and consolidation on all trade agreements between Nigeria and other countries, often times losses are incurred in the process.
In order to capture the huge informal intra-regional trade, the ECOWAS Trade Support Facility (ETSF) was introduced and designed toward improving the current trade level of less than 12% and deepening the volume of recorded formal trade within the Sub-region, as well as fostering the implementation of the Government’s Trade Policy and regional integration policies like the ECOWAS Trade Liberalisation Scheme (ETLS), among others. Specifically, the ETSF Facilitates formal recorded trade within ECOWAS sub-region deepening intra-regional payment system.
There is increasing Nigeria’s trade flows within ECOWAS as the dominant trading partner from the current level of 8.5% of total non-oil exports. Broadening trade and market access for Nigerian goods and services, especially manufactured goods
This also promotes the development of Small and Medium Enterprises (SMEs) cross border traders and facilitating their integration into the formal sector of the economy, and in the process facilitating their access to credit.
In furtherance of government’s policy initiatives for strengthening the Creative Arts and Entertainment Industry, the Bank supported the industry through funding intervention with lending commitments of about N1 billion in the Industry’s various value chains in the last three years. The Bank’s funding intervention in the sector is intended to address issues regarding the establishment of credible structures, attract investment in the development of content and infrastructure as well as facilitate improvement in production standards, distribution and marketing including exhibition standards.
The bank has at various times falling short of its corporate responsibilities and roles in terms of meeting set standards in the facilitation of loans for the development of businesses though its new thinking is at the verge of amends to recover from its lapses.
On its developmental role to support capacity building, the Bank had Commissioned The Indian Bank to undertake a study to review the Industry and recommend best financing programmes in line with global best practices, standards, which led to the development of the operating guidelines for financing projects in the sector.
Sponsorships of various capacities building programmes, events and film festivals such as Zuma Film Festival, BOBTV African Film & TV Programmes Expo, Eko International Film Festival, Nigeria Music Video Awards, Nigerian Copyright Commission (NCC) Stakeholders Forum on review of the Copyright Law
Sponsorships of Nigerian Pavilions at Cannes International Film Festival, France in partnership with the Nigerian Film Corporation and DISCOP Africa, South Africa to showcase Nigeria’s creative talent and attract investment capital and partnerships. Partnerships with Federal Ministry of Culture and National Orientation on the 1st National Policy Dialogue on the Development of the Creative/Entertainment Industries in Nigeria, British Council on Creative Industry Expo and Mapping of the Industry Engaged in policy dialogues with development partners, relevant regulatory and statutory institutions in the entertainment value-chain on ways of improving industry framework / structures on issues relating to access to finance, monetizing intellectual property / copyrights and risk mitigating instruments
Active collaboration and participation on the Federal Government’s Initiative of Advancing Creativity and Technology in Nollywood (Project ACT).
Arising from the numerous challenges faced by traders in moving goods by roads within the sub-region, the Bank, as a Trade Facilitating Agency, initiated and is currently facilitating the establishment of a transnational shipping companying collaboration with the Organized Private Sector Associations in west and central Africa in partnership with the Federation of West African Chambers of Commerce and Industries (FEWACCI) and Transimex S. A Cameroun. The proposed Sealink Project is aim at mitigating current non-tariff barriers and high logistical costs that has hindered the growth of intra-regional trade and competitiveness of Nigerian manufactured exports regionally.
Though initiated and largely being facilitated by the bank, the Sealink Project is essentially a Public Private Partnership initiative and the Private Placement for the raising of US$60 million is currently on-going, with application list closing on 30th June, 2014, while the shipping company is expected to commence operations within the fourth quarter of this year. The Offer is being handled by FBN Capital, Nigeria (Issuing House) and SGI, Benin Rebublic (Placement Agents). This laudable initiative has been endorsed by the ECOWAS Commission and is being technically supported by the African Development Bank (AfDB), the Directorate of Technical Cooperation in Africa, Maritime Organization of West and Central Africa (MOWCA) and the Nigerian Shippers’ Council, amongst others.
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West African leaders back Economic Partnership Agreement with EU
In a move welcomed by European Commissioner for trade Karel De Gucht, the heads of 16 West African states yesterday decided to sign the Economic Partnership Agreement (EPA) with the European Union.
“I am a firm believer in expanding our cooperation with Africa, a thriving continent full of opportunities. A partnership of equals with Africa has been one of my key priorities”, said José Manuel Barroso, President of the European Commission. “I am therefore more than pleased to see the Economic Partnership Agreement with West Africa now set to become a reality. This agreement, with a strong development component at its heart, will pave the way for sustainable economic growth in West Africa, generating jobs and well-being for our citizens.”
EU Trade Commissioner De Gucht added: “We are building a privileged economic partnership with West Africa that will be a foundation of long-term growth and future prosperity in a region that is so close to Europe. To help the EPA deliver its promise for development, the EU and West Africa need to implement this deal as soon as possible.”
The agreement fully takes into account the differences in the level of development between the two regions. The EU will provide West African firms with conditions that are more advantageous than those that apply to European exports to Africa. In the negotiations, the EU committed itself to open its market to all West African products as soon as the agreement enters into force. In exchange, the EU accepted a partial and gradual opening of the West African market. Only if and when West Africa will be ready to grant more far-reaching concessions to the Europe's main competitors, will the EU be able to claim those same improvements.
Under the terms of the agreement, West Africa will continue to be able to shield its sensitive agricultural products from European competition either by keeping tariffs in place or, when necessary, by imposing safeguard measures. To support local agricultural production, the EU has also agreed not to subsidise any of its agricultural exports to West Africa.
West African companies will also have more flexibility to use foreign components while still benefitting from free access to the EU market.
The EU will complement the market opening effort of the West African partners with a generous development assistance package. On 17 March, the EU Foreign Affairs Council confirmed EU support of at least €6.5 billion for West Africa during 2015-2020. The Economic Partnership Agreement Development Programme (PAPED) will play a crucial role in ensuring the EPA promotes trade and attracts investment to West African countries. This will contribute to development, sustainable growth and reducing poverty.
The final wording of the agreement was recently formally confirmed by the officials who negotiated the text. It will now be presented to the political decision makers, both in the ECOWAS and the EU, for signature and ratification.
Background
The Economic Partnership Agreement involves the EU and its member states, 16 West African countries (Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo), the Economic Community of West African states (ECOWAS) and the West African Economic and Monetary Union (WAEMU).
The EPA establishes a partnership based on common objectives, asymmetrical obligations – in West Africa's favour – and joint institutions including a Council, an EPA implementation committee, a Parliamentary Committee and a civil society forum.
West Africa accounts for 40% of total trade between the EU and all the ACP regions. The EU supplies a large part of the equipment that contributes to the economic growth and development in the region. European annual exports are worth approximately €30 billion. West African exports towards the EU account for €42 billion. The agreement should increase this figure even more in favour of our African partners.
The EU Economic Partnership Agreements, which aim to help creating a “virtuous circle” of growth, stem from the Cotonou Agreement signed in 2000 between the EU and countries of Africa, Caribbean and Pacific (ACP). The regional negotiations with West Africa started in October 2003 and were concluded in February 2014.
Brussels, 11 July 2014
For more information
Final communiqué of the ECOWAS Heads of State and Government's 45th Ordinary Session
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Seychelles’ WTO accession by end of 2014 is a ‘target we can meet’, says Finance Ministry
The Seychelles’ Ministry of Finance, Trade and Investment says that the Indian Ocean archipelago has made significant progress in its efforts to join the World Trade Organization (WTO), an international inter-governmental body that oversees the global rules of trade between nations and is set to meet its target of acceding to the WTO by the end of 2014.
According to a press statement from the WTO, Seychelles’ Minister of Finance, Trade and Investment, Pierre Laporte said a great deal had been accomplished since the Seychelles’ WTO Accession Working Party last met in November 2013.
Speaking at Seychelles’ sixth Working Party meeting in Geneva, Switzerland last week, the minister detailed several domestic policy and legislative reforms that Seychelles has already enacted to meet its WTO accession requirements, including legislation that would impose stricter sanitary controls on food, animal and plant trade, as well as laws relating to the protection of copyright and industrial property.
“Undertaking these reforms presented a particularly strong challenge for Seychelles, as a small and vulnerable island state, and also one of the 'smallest' trying to accede to the WTO,” said Laporte. “But we have made significant movement during the last few years, which is bringing our trade regime to the required level of competence and global integration.”
Seychelles has now completed bilateral trade negotiations with eight of the nine WTO members that requested talks via Seychelles’ working party (Canada, the European Union, Japan, Mauritius, Oman, South Africa, Switzerland and Thailand), and negotiations with the final member, United States, are reportedly nearing conclusion.
The chairperson of the Working Party, Hilda Ali Al-Hinai, called on Seychelles to update and submit a final version of its legislative action plan and asked Seychelles and the US to conclude the last outstanding bilateral trade negotiations as soon as possible.
The next Working Party meeting is expected to take place in the second half of September with a view to conclude the accession negotiations before the end of the year.
‘It is a target we can meet’ says Trade DG
In an interview with SNA, the Director-General of the Trade Division, Cillia Mangroo, explained that in terms of the accession process, there are two processes: a bilateral process between member states of the working party choosing to negotiate and a multilateral process with the entirety of the working party.
Mangroo says that with regard to the last remaining bilateral negotiations, that of trade between Seychelles and the United States, very few issues remain, and she is confident that the agreement will be concluded by August.
“Looking at what is outstanding right now from the last meeting, with regard to the multilateral process, we do not have many questions left,” she said. “We only received questions from Canada and the US on our trade regime, so while we are having bilateral negotiations with the US, we will negotiate as well with regards to the multilateral process.
“We are hopeful that we will join in 2014. From our meetings with other countries and the WTO secretariat, it is a target that we can meet,” she said.
Relief for local farmers
According to the Ministry of Finance, Trade and Investment, the Seychelles’ Principal Secretary for Natural Resources, Michael Nalletamby, also chaired a multilateral meeting on agriculture, where current measures for domestic support provided to the agricultural sector by the government of Seychelles was formally approved by the WTO.
This approval is expected to bring some peace of mind to Seychellois farmers already struggling to compete with cheaper imported produce.
The longest-ever WTO accession process?
The WTO’s multilateral trading rules follow two fundamental principles; the Most Favoured Nation (MFN) Principle, which states that there is to be no discrimination between trading partners, and the National Treatment Principle, which provides that there is to be no discrimination between foreign and local products once these products are on the local market, sparking concern that measures to revive Seychelles’ delicate agricultural sector could become a thing of the past.
The WTO requires the acceding countries to sign bilateral trade agreements with countries interested in trading with them and they are then required to bring their national laws, regulations and practices into line with the provisions of these agreements. An offer of accession is only given once consensus is reached among interested parties.
The process of becoming a WTO member is unique to each applicant country, but takes an average of about five years for most nations. The longest accession negotiation of a current member is currently that of Russia, which became a member of the WTO on 22 August 2012, 19 years after applying.
However, Seychelles is expected to surpass that record even if accession is granted by the end of the year.
Seychelles initially requested membership to the WTO on May 31, 1995, and made very little progress up until it re-initiated the process in 2008. One of the main challenges Seychelles faced was the limited expertise and experience within its national institutions in trade negotiations and in general and multilateral negotiations in particular.
For a small island developing state with a population of just over 90,000, the question as to whether Seychelles should join the organisation has been a contentious one in the past, particularly given the costs involved, such as the costs related to the accession process, the costs of preparing local stakeholders for trade in the globalized world, and the costs of ensuring that local businesses remain competitive.
Since 2008, the government made a significant amount of progress to identify the required legislative changes. By 2010, Seychelles had submitted offers in both Goods and Services, and also established a Working Party.
The WTO’s membership currently stands at 160 member states, accounting for over 97% of the world's total trade.
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OECD and FAO see lower farm prices; livestock and biofuels outpacing crop production
The recent fall in prices of major crops is expected to continue over the next two years before stabilising at levels above the pre-2008 period, but markedly below recent peaks, according to the latest Agricultural Outlook produced by the OECD and FAO.
Demand for agricultural products is expected to remain firm while expanding at lower rates than in the past decade. Cereals are still at the core of what people eat, but diets are becoming higher in protein, fats and sugar in many parts of the world, as incomes rise and urbanisation increases.
The OECD–FAO Agricultural Outlook 2014-2023 says such changes, combined with a growing global population, will require substantial expansion of production over the coming decade. Led by Asia and Latin America, developing regions will account for more than 75% of additional agricultural output over the next decade.
Presenting the report in Rome, OECD Secretary-General Angel Gurría said: “Agriculture markets are returning to more settled conditions after a period of unusually high prices. This has been helped by governments showing restraint in the use of trade measures. But we cannot be complacent. We must do more – on trade, on productivity, and to tackle poverty. Governments should provide social protection for the most vulnerable, and develop tools to help farmers manage risks and invest in agricultural productivity. Achieving gains in ways that are both inclusive and sustainable remains a formidable challenge.”
FAO Director-General José Graziano da Silva said: “This year the Outlook’s message is more positive. Farmers reacted very rapidly to the high prices and increased their production so that now we also have more stocks available. We foresee that prices related to cereals will decrease for at least the next two years. The picture is different for meat and fish where we are facing growing demand. The good performance of the agricultural sector particularly in developing countries will contribute to the eradication of hunger and poverty.”
In a special focus on India, the Outlook projects sustained food production and consumption growth, led by value-added sectors like dairy production and aquaculture. Investment in production technology and infrastructure together with subsidies in a range of areas have contributed to strong output expansion over the past decade, the report says, and pressure on resources is expected to reduce production growth rates over the coming years.
While remaining largely vegetarian, Indian diets will diversify. As consumption of cereals, milk and dairy products, pulses, fruit and vegetables grows, the intake of food nutrients will improve. India is currently home to the largest number of food-insecure people in the world.
The Agricultural Outlook says global cereal production is projected to be 15 percent higher by 2023 than in the 2011-13 period. The fastest production growth is expected to be oilseeds, at 26 percent over the next 10 years. The expansion of coarse grain and oilseed production will be driven by strong demand for biofuels, particularly in developed countries, and growing feed requirements in developing regions.
The expansion of food crop production will be more moderate over the coming decade, the report says, with wheat output growing by around 12 percent and rice by 14 percent, well below the growth rates of the previous decade. Sugar production is expected to increase by 20 percent over the coming decade, concentrated mainly in developing countries.
The Agricultural Outlook projects developments in a broad range of commodities over the coming decade:
- Cereals: World prices of major grains will ease early in the outlook period, boosting world trade. Stocks are projected to rise with rice inventories in Asia reaching record high levels.
- Oilseeds: The global share of cropland planted to oilseeds continues to increase albeit at a slower rate than in recent years as growing demand for vegetable oils pushes prices up.
- Sugar: After weakening in late 2013, prices will recover, driven by strong global demand. Exports from Brazil, the world’s dominant sugar exporter, will be influenced by the ethanol market.
- Meat: Firm import demand from Asia, as well as herd rebuilding in North America support prices which are expected to remain above the average levels of the previous decade, when adjusted for inflation. Beef prices are seen rising to record levels. Poultry should overtake pork to become the most consumed meat product over the next 10 years.
- Dairy: Prices fall slightly from their current high levels due to sustained productivity gains in the major producing countries and resumed growth in China. India overtakes the European Union to become the largest milk producer in the world, building considerable skimmed milk powder exports.
- Fisheries: Aquaculture production growth will be concentrated in Asia, and will remain one of the fastest-growing food sectors, surpassing capture fisheries for human consumption in 2014.
- Biofuels: The consumption and production levels of biofuels are expected to increase by more than 50 percent, led by sugar-based ethanol and biodiesel. The ethanol price increases in line with the crude oil price, while the biodiesel price more closely follows the path of vegetable oil prices.
- Cotton: The expected release of accumulated global stocks will boost consumption, helped by lower prices which should then recover by 2023.
Further details about the Outlook can be found at www.agri-outlook.org.
Information on the OECD's work on agriculture is available at www.oecd.org/agriculture.
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23rd AU Summit: Decision on the report of the High Level African Trade Committee on Trade Issues
The Assembly,
1. RECALLS the Decision on Boosting Intra-African Trade / Continental Free Trade Area taken on 30 January 2012 at its Eighteenth Ordinary Session;
2. TAKES NOTE of the Report of the High Level African Trade Committee (HATC) held on 25 June 2014 and endorses its recommendations;
3. With regard to the WTO Trade Facilitation Agreement;
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REAFFIRMS its commitment to the Doha Development Agenda and to its rapid completion in accordance with its development objectives;
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ALSO REAFFIRMS its commitment to all the decisions the Ministers took in Bali which are an important stepping stone towards the conclusion of the Doha Round;
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To this end ACKNOWLEDGES that the Trade Facilitation Agreement is an integral part of this process;
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REITERATES in this regard that assistance and support for capacity building should be provided as envisaged in the Trade Facilitation Agreement in a predictable manner so as to enable African economies to acquire the necessary capacity for the implementation of the agreement;
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Therefore AGREES that the Trade Facilitation Agreement should be implemented in line with the decision Trade Ministers took in Bali.
4. ADOPTS the revisions to the Terms of Reference of the High Level African Trade Committee arising from its meeting held on 25 June 2014;
5. CALLS UPON Member States to maintain the momentum to fast track the establishment of the CFTA as scheduled by providing necessary financial and technical resources at national, regional and continental levels;
6. Cognizant of the impact of the negotiations of bilateral, multilateral and mega trade agreements on the African integration agenda, URGES Member States and RECs once more to ensure that they do not compromise the African trade integration process, by transmitting through their respective RECs the draft texts under negotiation with their partners;
7. DIRECTS the Commission to prepare Draft Terms of Reference of the CFTA Negotiating Forum based on best practices in the RECs/Tripartite, refined draft Guiding Objectives and Principles as well as Institutional Arrangements to be submitted to the next AU Trade Ministerial Conference for adoption and to the next AU Summit for endorsement towards the effective launch of the CFTA negotiations in June/July 2015;
8. REQUESTS the Commission to also prepare terms of reference for the negotiations on Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) and Non-Tariff Barriers (NTBs);
9. CALLS UPON the Ministers of Trade to meet separately from the STC meetings as often as needed to ensure the effective completion of the CFTA negotiations and related issues;
10. DECIDES that the next meeting of the HATC will be held in Addis Ababa, Ethiopia in the margins of the January 2015 Summit and will be chaired by the President of the Republic of Ghana.
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Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods
We, the Heads of State and Government of the African Union,
having met at our Twenty Third Ordinary Session of the AU Assembly in Malabo, Equatorial Guinea, from 26-27 June 2014, on the Theme of the African Year of Agriculture and Food Security:
“Transforming Africa’s Agriculture for Shared Prosperity and Improved Livelihoods through Harnessing Opportunities for Inclusive Growth and Sustainable Development, also marking the tenth Anniversary of the Adoption of the Comprehensive Africa Agriculture Development Programme (CAADP)”.
Recalling our previous Decisions and Declarations on agriculture and food and nutrition security, in particular the pdf 2003 Maputo Declaration on Agriculture and Food Security in Africa (310 KB) ; the pdf 2004 Sirte Declaration on the Challenges of Implementing Integrated and Sustainable Development in Agriculture and Water in Africa (34 KB) ; the pdf 2009 Sirte Declaration on Investing in Agriculture for Economic Growth and Food Security (126 KB) ; the pdf 2007 Decision on Abuja Special Summit of the AU on Fertilisers (390 KB) ; the pdf 2007 Decision on the Abuja Summit on Food Security in Africa (316 KB) ; among others.
Acknowledging the persistent efforts made in implementation of the CAADP at national and regional levels, and the positive growth performance that our agricultural sector has been registering in recent years.
Also acknowledging the challenges faced in the implementation of many of those Decisions and Declarations, in particular on progress made in attaining the minimum targets of public investment in agriculture that should demonstrate Africa’s ownership and leadership to the achievement of goals as enshrined in the 2003 Maputo commitments.
Recognising the dire situations that obtain with regard to Africa’s capacity to generate analyse and manage data and information to facilitate evidence based policy development and tracking of progress of implementation, and hence affirming our commitment to enhance such a capacity.
Noting with Concern that the results of the Cost of Hunger Study in Africa (COHA) conducted by the AUC revealed the degree to which child under-nutrition influences health and educational outcomes; the additional barrier it has on children's ability to achieve their full potential; and the impact it has on national productivity.
Concerned that a significant proportion of our population still remains vulnerable to the challenges of economic marginalization, hunger and malnutrition, despite the positive achievements registered recently in agriculture and economic growth; and reiterating our resolve to ending hunger and improving nutrition consistent with our pdf 2013 Decision on Renewed Partnership for a Unified Approach to End Hunger in Africa by 2025 under the CAADP Framework (174 KB) .
Reaffirming our resolve towards ensuring, through deliberate and targeted public support, that all segments of our populations, particularly women, the youth, and other disadvantaged sectors of our societies, must participate and directly benefit from the growth and transformation opportunities to improve their lives and livelihoods.
Reflecting that hunger and malnutrition are major causes of poverty and underdevelopment in Africa by causing poor health, low levels of energy, and mental impairment, all leading to low productivity and low educational attainment all of which can in turn lead to even greater hunger and malnutrition, thereby creating a viscous cycle.
Noting the progress made towards alignment, harmonisation and coordination of initiatives and activities of stakeholders and partners with our priorities as defined in the National and Regional Agricultural and Food Security Investment Plans that have been developed through the CAADP process, and stressing on the significance of sustaining this momentum.
Concerned that there is limited progress made in agro-industries and agribusiness development, which hampers value addition and competitiveness of our products in trade both local, regional, and international; and undermines the potential of the sector in transformation and generation of gainful employment opportunities for the growing African youth and women, hence reaffirming our resolve to the achievement of goals as provided in our Decision on pdf 2010 Abuja Declaration on Development of Agribusiness And Agro-Industries In Africa (43 KB) .
Also concerned over the heavy and growing dependence of our production systems and consumption patterns on external factors (weather, global markets, amongst others,) and their associated vulnerabilities to such external factors as climate variability and change as well as to global economic and political shocks.
Stressing the significance of enhancing conservation and sustainable use of all of our natural resources including land, water, plant, livestock, fisheries and aquaculture, and forestry, through coherent policies as well as governance and institutional arrangements at national and regional levels, to realise their huge potential to generate wealth, social benefits and contribute to the development of our economies.
Recognising the importance of multi-sectoral engagement and co-ownership of this agricultural transformation agenda within our public sectors, including infrastructure, energy, trade, industry, health, science and technology, education, hence the importance of putting in place a coherent inter-sectoral coordination of the efforts and initiatives for optimising resource use, synergy and maximising outcome and impact.
Further recognising the complementary roles and responsibilities that should be enhanced among the relevant stakeholders, including public, private, civil societies, farmers, pastoralists, fishers, in driving this agricultural transformation agenda.
Welcoming the Resolutions of the African Union Joint Conference of Ministers of Agriculture, Rural Development, Fisheries and Aquaculture, held in Addis Ababa, Ethiopia from 01 to 02 May 2014, endorsed by the Executive Council, and in particular their recommendations calling for our Assembly to consider adopting commitments along specific and concrete priorities.
We hereby adopt the following Declaration:
I. Recommitment to the Principles and Values of the CAADP Process
1. We recommit to the key principles and values that define the CAADP process which include, among others:
a) the pursuit of agriculture-led growth as a main strategy to achieve targets on food and nutrition security and shared prosperity;
b) the exploitation of regional complementarities and cooperation to boost growth;
c) the application of principles of evidence-based planning, policy efficiency, dialogue, review, and accountability, shared by all NEPAD programs;
d) the use of partnerships and alliances including farmers, agribusiness, and civil society; and
e) support implementation at countries levels, and regional coordination and harmonisation.
II. Commitment to Enhancing Investment Finance in Agriculture
2. We commit to enhance investment finance, both public and private, to agriculture; and to this end we resolve:
a) to uphold our earlier commitment to allocate at least 10% of public expenditure to agriculture, and to ensure its efficiency and effectiveness;
b) to create and enhance necessary appropriate policy and institutional conditions and support systems for facilitation of private investment in agriculture, agri-business and agro-industries, by giving priority to local investors;
c) to fast-track the operationalization of the African Investment Bank, as provided for in the Constitutive Act of the African Union, with a view to mobilizing and disbursing investment finance for priority agriculture related investment projects.
3. We commit to ending hunger in Africa by 2025, and to this end we resolve:
a) to accelerate agricultural growth by at least doubling current agricultural productivity levels, by the year 2025. In doing so, we will create and enhance the necessary appropriate policy and institutional conditions and support systems to facilitate:
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sustainable and reliable production and access to quality and affordable inputs (for crops, livestock, fisheries, amongst others) through, among other things, provision of ‘smart’ protection to smallholder agriculture;
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supply of appropriate knowledge, information, and skills to users;
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efficient and effective water management systems notably through irrigation;
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suitable, reliable and affordable mechanization and energy supplies, amongst others.
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b) to halve the current levels of Post-Harvest Losses, by the year 2025;
c) to integrate measures for increased agricultural productivity with social protection initiatives focusing on vulnerable social groups through committing targeted budget lines within our national budgets for:
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- strengthening strategic food and cash reserves to respond to food shortages occasioned by periodic prolonged droughts or other disasters/emergencies;
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- strengthening early warning systems to facilitate advanced and proactive responses to disasters and emergencies with food and nutrition security implications;
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- targeting priority geographic areas and community groups for interventions;
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- encouraging and facilitating increased consumption of locally produced food items, including the promotion of innovative school feeding programs that use food items sourced from the local farming community.
d) to improve nutritional status, and in particular, the elimination of child under- nutrition in Africa with a view to bringing down stunting to 10% and underweight to 5% by 2025.
IV. Commitment to Halving Poverty by the year 2025, through Inclusive Agricultural Growth and Transformation
4. We resolve to ensure that the agricultural growth and transformation process is inclusive and contributes at least 50% to the overall poverty reduction target; and to this end we will therefore create and enhance the necessary appropriate policy, institutional and budgetary support and conditions:
a) to sustain annual agricultural GDP growth of at least 6%;
b) to establish and/or strengthen inclusive public-private partnerships for at least five (5) priority agricultural commodity value chains with strong linkage to smallholder agriculture;
c) to create job opportunities for at least 30% of the youth in agricultural value chains;
d) to support and facilitate preferential entry and participation for women and youth in gainful and attractive agri-business opportunities.
V. Commitment to Boosting Intra- African Trade in Agricultural commodities and services
5. We commit to harness markets and trade opportunities, locally, regionally and internationally, and to this end we resolve:
a) to triple, by the year 2025, intra-African trade in agricultural commodities and services;
b) to create and enhance policies and institutional conditions and support systems:
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- to simplify and formalize the current trade practices;
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- to fast-track the establishment of Continental Free Trade Area (CFTA) and transition to a continental Common External Tariff (CET) scheme;
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- to increase and facilitate investment in markets and trade infrastructure;
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- to promote and strengthen platforms for multi-actors interactions;
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- to strengthen and streamline the coordination mechanism that will facilitate the promotion African common position on agriculture-related international trade negotiations and partnership agreements.
VI. Commitment to Enhancing Resilience of Livelihoods and Production Systems to Climate Variability and other related risks
6. We commit to reduce vulnerabilities of the livelihoods of our population through building resilience of systems; and to this end we resolve:
a) to ensure that, by the year 2025, at least 30% of our farm, pastoral, and fisher households are resilient to climate and weather related risks;
b) to enhance investments for resilience building initiatives, including social security for rural workers and other vulnerable social groups, as well as for vulnerable ecosystems;
c) to mainstream resilience and risk management in our policies, strategies and investment plans.
VII. Commitment to Mutual Accountability to Actions and Results
7. We commit to a systematic regular review process, using the CAADP Results Framework, of the progress made in implementing the provisions of this Declaration; and to this end we resolve:
a) to conduct a biennial Agricultural Review Process that involves tracking, monitoring and reporting on progress;
b) to foster alignment, harmonization and coordination among multi-sectorial efforts and multi-institutional platforms for peer review, mutual learning and mutual accountability;
c) to strengthen national and regional institutional capacities for knowledge and data generation and management that support evidence based planning, implementation, monitoring and evaluation.
VIII. Strengthening the African Union Commission to support delivery on these commitments
8. We will strengthen the capacity of the African Union Commission to help it fulfil the growing roles and mandates we have been ascribing to it, through this Declaration as well as other relevant previous Declarations and Decisions; and to this end we invite the Chairperson of the Commission to submit a proposal with a view to enhancing the institutional capacity of the lead Department as well as other relevant units, for consideration and approval by the January 2015 Ordinary Session of the Executive Council.
IX. A Call for Action
9. We commit to an expedient process of translation of these commitments into results; and to this end we call upon:
a) the AU Commission and NEPAD Planning and Coordinating Agency (NPCA) to develop an implementation strategy and roadmap that facilitates translation of the 2025 vision and goals of Africa Accelerated Agricultural Growth and Transformation into concrete results and impacts, and report to the January 2015 Ordinary Session of the Executive Council for its consideration;
b) AU Commission to fast-track the operationalization of the African Investment Bank;
c) the AU Commission and RECs to facilitate the acceleration of economic integration to boost intra-Africa trade in food and agriculture;
d) the AU Commission and NPCA, in collaboration with partners:
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- to develop mechanisms that enhance Africa’s capacity for knowledge and data generation and management to strengthen evidence based planning and implementation;
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- to institutionalize a system for peer review that encourages good performance on achievement of progress made in implementing the provisions of this Declaration and recognize biennially exemplary performance through awards;
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- to conduct on a biennial basis, beginning from year 2017, Agricultural Review Process, and report on progress to the Assembly at its January 2018 Ordinary Session.
e) the African stakeholders, including farmers, pastoralists, fishers, private sector operators in agriculture, agribusiness and agro-industries, civil society organisations, and financial institutions, to rally behind the realization of the provisions of this Declaration and take advantage of the huge opportunities that it presents;
f) the African Agricultural Research and Knowledge Institutions to vigorously support the realization of this agenda through an integrated and coherent manner, building on national systems and capacities;
g) the Development Partners to rally and align their technical and financial support in a harmonized and coordinated manner to support the implementation of the provisions of this Declaration.