2009-09-30 tralac Newsletter
2009-09-30 tralac
Hotseat Comment
Colin McCarthy, a tralac Associate, comments "Out of Africa good can come..."
Economic reports on Africa, Sub-Sahara Africa in particular, make sad reading. They often paint a dismal picture of a continent with a declining share in world production and trade, burdened by political and economic instability and suffering growing numbers of poor people. A whole literature has come about trying to explain why Africa has been left behind in the economic development stakes with some economists building solid reputations as experts on Africa’s poor economic performance.
Of course there are notable exceptions to the economic malaise that describes the African economic scene but the general picture is pretty bleak, one of regression instead of progression, with spurts of growth in some cases the result not of broad-based economic development but of a favourable commodity cycle.
Can, in the foreseeable future, something good come out of Africa? Yes, it is quite possible if we take our cue from a single example, Rwanda. Considering all the downside factors that feature in the comparative analysis of Africa’s poor economic performance, a less likely candidate for a good story can hardly be imagined. Rwanda is a small, landlocked LDC in the tropics. It is ethnically divided and has a recent history of civil war which in 1994 culminated in an atrocious genocide.
A more dismal starting point for sustainable development will be difficult to find. Nevertheless, there are clear signs that Rwanda can overcome the severe constraints its economic development faces and move into a phase of sustainable, poverty-alleviating growth. The government of President Paul Kagame is serious in its endeavours to develop the economy in a corruption-free environment, characterised by political and macro-economic stability and the implementation of the coherent Economic Development and Poverty Reduction Strategy adopted in 2007. Infrastructure development and investment in manufacturing, services and agriculture receive priority and through the activities of the Presidential Advisory Council economic development benefits from and is exposed to international business. The seriousness of the desire to create a business-friendly environment is also reflected in the operation of what is reported to be a state of the art one-stop shop that significantly eases the transformation of planned investment into operational business (tralac has assisted Rwanda to develop capacity in trade in services. Read more here...). Having joined the East African Community in July 2007 furthermore illustrates that Rwanda is aware that for a small landlocked economy viable regional market integration is crucial.
Rwanda is not out of the woods as far is economic development towards broad-based growth is concerned. It will take time for development initiatives to mature and with the genocide albatross still round its neck, social and political stability remains fragile and demands steady and responsible governance. But progress is made and consequently the country is on track to achieve several of the Millennium Development Goals.
At this stage already, Rwanda serves as an example for other African countries in one respect in particular. In Africa the blame for poor economic performance so often tends to be sought elsewhere, for example, it is the industrialised world that is not easing market access and it is the rich countries that are not keeping their promises of development aid. These factors are important but the lesson that Rwanda has for others is that the capacity to produce tradable goods and services in the first place requires a concerted national effort and good domestic policies.
Foreign markets and foreign aid are important for the development of small poor economies, but even market access is of no use if the capacity to produce tradable goods and services do not exist. Also, flows of foreign aid and investment tend to favour those who have a record of the productive use of aid. Getting the domestic scene and policies right remains the indispensable starting point of sustainable economic development.
Special Features
Monitoring Trade and Climate Change
tralac Media Library
- View an interview by Dr Dickson Yeaboah, (Institute for Training and Technical Cooperation WTO). He comments on the competitiveness of African countries.
- View an interview by Mr Chiedu Osakwe, Accessions Division WTO. He comments on the special and differential treatment LDCs receive when acceding to the WTO.
- View all previous interviews here...
Weekly Customs, Excise, Tariff and Trade Remedy Summary Notification
- Download the notification here.
News
EU, US in talks to cut import tariffs on green goods
The European Union (EU) and the United States are holding talks on devising an accord with OECD countries and China to eliminate duties on green goods as part of incentives to China in a potential global climate deal.
Global cotton use declines
Global cotton consumption has registered a decline of 12 percent in the season ended July 31, 2009, the largest year-to-year slump since at least the 1920s.
China becomes SA’s top trading partner
A mere 10 years after establishing diplomatic and trade relations, China has overtaken the United States, Japan, Germany, and the United Kingdom to become South Africa’s largest trading partner, the latest figures from the Department of Trade and Industry have shown.
AU endorses controversial EU trade pact
The African Union (AU) has expressed its support of the proposed new trade agreement between Africa and Europe, saying that it would improve the investment climate and significantly increase the amount of foreign direct investment (FDI) on the continent.
G20 leaders pledge quick action on Doha round
World leaders on Friday pledged quick action to conclude the long-running Doha world trade talks, instructing their top trade officials to meet by early 2010 to begin the final push for a deal.
India keen on signing preferential trade agreement with SACU
Union Minister for Commerce and Industry Anand Sharma said on Saturday, following the unveiling of various incentives to exporters who seek to explore new markets and destinations for their products, that India’s presence in and exports to African nations are causing concern to a number of international players, particularly in view of India’s growing share of generics.
Rudd urges free trade, carbon caps to spur world growth
Australian Prime Minister Kevin Rudd has said the world must push for freer trade, lower carbon pollution, and increased investment in Internet technologies in order to pull the global economy out of its worst slump since World War II.
Protectionism a roadblock to world economic recovery
Leaders of the Group of 20 (G20) nations are expected to reaffirm their pledges to promote free trade at the Pittsburgh summit on Thursday and Friday as protectionism has proven to be an obstacle to global economic recovery.
SA keen to include ‘green’ industries in revised industrial policy plan
The South African Department of Trade and Industry (dti) said on Wednesday that although its exploration of ‘green industries’ was at an early stage, it is “very keen” to include them in the revised Industrial Policy Action Plan (Ipap), which will go before Cabinet in January.
Events
The 47th Annual Conference of the Agricultural Economics Association of South Africa (AEASA)
The theme of the conference was “Promoting the competitiveness of South African agriculture in a weakened global economy”. Read more here...Publications
Safeguards and trade remedies in the SADC and ESA Economic Partnership Agreements
New working paper: Safeguards and trade remedies in the SADC and ESA Economic Partnership Agreements by Gerhard Erasmus, a tralac Associate. This paper discusses the “Trade Defence Instruments” in the Economic Partnership Agreements (EPAs) currently being negotiated between the European Union (EU), on the one hand, and different configurations of ACP (African, Caribbean and Pacific) countries on the other. These “instruments” cover remedies against unfair trade practices (anti-dumping and countervailing measures) as well as safeguards. ACP concerns about infant industry protection, food security and agriculture are also on the agenda. Read more here...Sino-African agricultural cooperation: Lessons for Africa’s agricultural development
New working paper: Sino-African agricultural cooperation: Lessons for Africa’s agricultural development by Ron Sandrey and Hannah Edinger. As part of the Forum on China-Africa Cooperation process, China has identified agricultural cooperation with Africa as a key priority sector of interaction. This cooperation with the continent has been ongoing and spans over the last five decades. Since the 1990s greater impetus has been placed on this relationship. Rich in agricultural resources, this support both financially and technically should be embraced and best harnessed by the continent to “feed itself”, given the issues of African food security and rural poverty, which came to the forefront once again during the big food price increases of 2008. Read more here...
Protectionism, trade remedies and safeguards: A quick guide for African countries
New working paper: Protectionism, trade remedies and safeguards: A quick guide for African countries by Willemien Denner, a tralac Researcher. Since 1945 the world economy has experienced high growth rates associated with the liberalisation of goods and services and the increase of capital flows. However, the global financial crisis which started in August 2007 has raised concerns for countries regarding the present and potential losses that can be experienced in employment and income. This rekindled the debate on protectionism and the restriction of foreign imports to protect domestic industries. Since the start of the financial crisis a dramatic increase of trade restrictive measures has taken place. After an initial slowdown in the utilisation of trade remedies, 2008 showed a marked increase in contingent protection measures. It seems certain that this trend will continue through the rest of 2009 and possibly into 2010. This can have a dramatic effect on the development, economic growth, employment and income of developing and least developed countries. Read more here...
AGOA.info
July data updated
Trade data to July 2009 was recently updated on AGOA.info. Compared to the previous year, many AGOA beneficiaries have experienced a significant decline in their US-bound exports, partly as a result of lower demand as a consequence of the current economic crisis. Lower international oil prices have in turn severely reduced the value of exports from countries such as Angola and Nigeria, which are the two leading exporters under this trade Act.
Updated bilateral US-Africa country trade profiles
Profiles of disaggregated bilateral US-Africa trade, by country, has been updated to reflect July 2009 data. This also includes various regional profiles - SACU, BLNS, COMESA, ECOWAS, and CEMAC. Follow this link.
Other updated AGOA data sections include disaggregated bilateral trade profiles for each AGOA country individually (as well as within various regional configurations), aggregate bilateral trade, preferential trade under AGOA / GSP and sectoral data from AGOA-eligible countries by value and as a proportion of US imports, as well as sectoral new AGOA and GSP AGOA data. Textile data, is available by value and by volume. Data to June 2009 shows exports of clothing are down 8% year-on-year (clothing exports made up of third country fabrics are 5% lower). Export data is available at this link.
The current quota period commenced in October 2008 and lasts up until September 2009. Quota utilisation (to August 2009) is 14.7% overall, and 28.54% under the LDC sub-quota. Follow the link to the data here.
Trade acronyms and terminology
Visit AGOA.info's alphabetically-ordered database of trade-related acronyms and terminology
Latest AGOA news
- Africa: Obama Administration committed to partnering with Africa - Johnnie Carson
- Uganda: Government renews support for local textile industry
- Nigeria: Federal government worried over poor Nigeria/US trade
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- Read these and other AGOA-related news articles in AGOA.info's news area, which is continuously updated with articles sourced from a wide range of African and foreign publications.
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