2009-10-21 tralac Newsletter
2009-10-21 tralac
Hotseat Comment
Colin McCarthy, a tralac Associate, comments on Monetary integration in Africa (I).
European monetary integration and the successful establishment of the Euro as a prominent world currency have revived the discourse on the contribution that the integration of monetary systems can make to economic development and macro-economic stability. In Africa, in particular, this debate found fertile ground. Three reasons can be identified that will explain this.
The first is the preference in Africa for the linear model of regional integration and consequently the adoption of regional integration agreements that as final step envisages monetary integration and the adoption of a single currency. At the pinnacle of African integration arrangements, the African Union from the start adopted the goal of a single African currency along the lines of the Euro.
The Southern African Development Community (SADC) serves as an example in southern Africa of many integration arrangements in Africa that envisages the adoption of a single currency. For SADC the latter development is expected to occur in 2018.
In addition, Africa is home to two successful monetary integration arrangements, namely the CFA franc Zone in francophone Africa, and in southern Africa, the Common Monetary Area (CMA). Both these arrangements are legacies of Africa’s colonial past but they remain examples of how monetary integration have contributed and still can contribute to stability and growth.
The third reason is associated with the fact that Africa has an unfortunate history of economic regression and macro-economic and political instability in many countries. Combine this with the fragmented nature of the continent into a multitude of very small and poor economies and the idea of a single regional currency and its benefits as an anchor of stability (an agent of restraint) and facilitator of intra-regional trade becomes attractive.
To contribute to this discussion and specifically to clarify many of the issues and questions that characterise monetary integration as a regional integration arrangement tralac has decided to contribute to the debate. This explanatory note is the first in a series that will be published as hot seat comments. The intention is to clarify concepts and highlight the costs and benefits of monetary integration in the African context. The finer and more detailed technicalities of the topic will be avoided in order to enhance accessibility for non-specialists.
As always, comments will be appreciated in a spirit of broadening the discussion on monetary integration.
Special Features
Discussion Note: Taking stock of South Africa's investment treaties
Gerhard Erasmus, a tralac Associate, is taking stock of South Africa's investment treaties. The South African Department of Trade and Industry (DTI) is “taking stock” of the bilateral investment treaties to which South Africa is a party. This is done because there is a need for “more flexibility and the accommodation of development imperatives”. This is an important exercise. Investment protection agreements traditionally served to protect private foreign investors who find themselves in the jurisdiction of third states. This function has changed. The purpose and function of such agreements are now related to the contemporary global context of which they form part. The needs of the host state as well as the impact on regional trade arrangements must also be accommodated. Will investment agreements promote development as well? Read more here...Discussion Note: Regional integration: a discussion on the proposed tripartite FTA
Taku Fundira, a tralac Researcher, discusses the proposed tripartite FTA. The main objective of Free Trade Agreements (FTAs) is to secure trade liberalisation. An advantage of FTAs is that market access concessions may be negotiated more easily and more quickly than in multilateral agreements because fewer parties are at the table. Thus parties can secure advantages that are harder to win in bigger forums. These sentiments seem to be shared by African leaders in the region, if one has to consider the decisions that they have taken lately at the regional level. Read more here...Monitoring Trade and Climate Change
tralac is monitoring preparations for the United Nations Climate Change Conference taking place in Copenhagen, Denmark in December 2009.- New article: Escaping the dead end on the way to Copenhagen.
- Danish ambassadors' speech on Climate Change at the Africa Investor CEO Forum.
- Follow this link to more articles…
tralac Media Library
- View a new interview by Dr Patrick Low, Chief Economist of the WTO. He comments on the relationship between trade policy and climate change.
- View all previous interviews here...
Weekly Customs, Excise, Tariff and Trade Remedy Summary Notification
- Download the notification here.
News
2010 Doha deal unlikely at current pace, says Lamy
It will be difficult to reach a conclusion in the Doha round of multilateral trade talks in 2010 unless a “serious acceleration” in the pace of the process is implemented, World Trade Organisation (WTO) Director-General Pascal Lamy said on Tuesday.
G14 meet yields no result after unrelenting US stand
A meeting of senior trade officials from the newly constituted Group of 14 (G14) countries, tasked with finding solutions in the ongoing Doha round of trade negotiations, ended on Tuesday without any progress as a result of the United States’ unwillingness to enter into a hard bargain on various outstanding issues in market access for industrial goods and services.
No trade barriers in climate talks please, says Indian official
While India is positioning itself as a proactive player in the climate change discourse, saying it is part of the solution, the real concern within industry and government is that negotiations should not be used to erect barriers to free trade and investment, India’s special envoy for climate change Shyam Saran has said.
WTO calls for open international trading
Efforts have begun at the World Trade Organisation (WTO) to create an open international trading system to speed up global economic recovery.
SA sugar producers hopeful of EU trade deal
South African sugar producers are hopeful that the country will conclude an Economic Partnership Agreement (EPA) with the European Union (EU) that would allow them to export sugar into Europe, industry officials have said.
Bric countries offer long-term trade prospects for Africa
Trade between Africa and Brazil, Russia, India and China (Bric) could soar to more than US$4 trillion by 2030 from US$166 billion in 2008 as a result of rapid growth in those economies and the mutual advantages of their relationships with Africa, a report from Standard Bank has said.
US pushes for services trade openings in Doha
The United States cannot agree to a world trade pact until more concessions are made for big banks, insurance companies, and other service companies, US Trade Representative Ron Kirk said on Tuesday.
Trade barriers could hamper recovery, says Lamy
Minor barriers to trade could slow the speed of a global economic recovery even if protectionism has not reached the high levels seen in the past, World Trade Organisation (WTO) Director-General Pascal Lamy said on Tuesday.
Events
tralac at Rhodes University’s China Week: 28 September - 2 October 2009
Rhodes University held a China Week in Grahamstown from 28 September to 2 October 2009. This colloquium, which examined economic relations between Africa and China, was supported by the Confucius Institute at the University. Presentations and discussion rounds gave attending students an outline and assessment of the history, current trends and perspectives on China’s engagement on the African continent. Read more here...Updated: tralac Annual Conference 2009
The tralac Annual Conference 2009 Report and audio recordings of speakers' presentations are now available. Click here to access the Annual Conference 2009 page on tralac's website.Publications
Anti-dumping on TOFA: Hopping a country too far?
New working paper: Anti-dumping on TOFA: Hopping a country too far? by Gustav Brink, a tralac Associate. The circumvention of anti-dumping duties has given rise to significant discussion on the topic in the World Trade Organisation. At present the WTO Anti-Dumping Agreement does not contain any anti-circumvention provisions and it is up to each country to regulate the use thereof. South Africa’s Anti-Dumping Regulations provide for several different forms of anti-circumvention, including country hopping, i.e. where an importer switches supply from a producer in one country to a related producer in a third country as a result of the imposition of preliminary or definitive anti-dumping duties or the initiation of an investigation against the exporter in the first country. This is not recognised as circumvention by any other country. Read more here...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...AGOA.info
July trade data published
Trade data under AGOA was updated a few days ago to include August 2009 data. As a result of major declines in the value of exports from the largest traders Nigeria and Angola (-65% and -60% respectively), aggregate AGOA exports are down 61%. Although each of the leading exporting countries under AGOA have seen a contraction in their US-bound exports this year, there are some notable examples within the Southern African and East African region where this is not the case. Lesotho (-4%), Kenya (-4%) and Swaziland's exports (-1%) have remained relatively stable for the year to August, while Malawi has recorded a 118% increase thus far to US$ 45mn.
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 August 2009 shows exports of clothing are down 12% year-on-year (clothing exports made from third country fabrics are 9% lower in the current year). Export data is available at this link.
The most recent quota period commenced in October 2008 and lasted up until September 2009. Quota utilisation for the full year was 15.7%, and 30.5% under the LDC sub-quota (applicable to the use of third country fabrics). 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
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