2010-01-13 tralac Newsletter

2010-01-13 tralac

News > Newsletters


Hotseat Comment

 Paul Kruger

Paul Kruger, a tralac Researcher, comments: Copenhagen – where are we now?

While some regard the outcome in Copenhagen as an important first step to slow global warming, others label it as a failure and disaster. The outcome centres around an agreement, dubbed the Copenhagen Accord, which was simply ‘noted’ by the Conference of the Parties to the UN Framework Convention on Climate Change (COP15) during its closing session. Only a limited group of countries participated in the drafting of the Accord, a departure from the normal procedure of the UN Framework Convention on Climate Change (UNFCCC) which requires all participating parties to be involved in the drafting process. After intense deliberations, the delegates passed a motion to ‘take note’ of the Accord, instead of formally adopting it. This is not a legally binding agreement, but rather a political document indicating the willingness of the parties to move forward.

The participating states have until 31 January 2010 to sign the Accord and confirm the commitments they are willing to undertake. It remains to be seen how many countries will sign the Accord. The developed countries (Annex I parties to the Accord) are expected to outline their economy-wide emissions targets up until 2020, with the understanding that the Kyoto Protocol signatories would hereby further strengthen their existing targets. In terms of the Accord, developing countries (Non-Annex I parties) must implement ‘mitigation action’ to decouple economic growth from emissions increases while Least Developed Countries (LDCs) and Small Island States may undertake actions voluntarily and on the basis of support. The undertakings of the signatories will then be incorporated into the revised negotiating text (INF document). The plan is to turn the Accord into a legally binding document when the parties meet for the next climate change conference in Mexico at the end of 2010.

In essence the Accord recognises that deep emissions cuts are required, with the objective to limit the increase of temperatures to no more than 2 degrees Celsius above pre-industrial levels. The 2 degree Celsius limit has widely been accepted by scientists as the turning point, but this threshold has never been formally included in a UN document. Despite recognising the danger, the agreement does not stipulate any obligatory conduct or action to achieve this goal. No timeframe is included, nor is a peak year mentioned. It simply states that the parties must ‘cooperate in achieving the peaking of global and national emissions as soon as possible’. In order to financially support such mitigation action, the text provides for short terms funding totalling US$ 30 billion for the remaining three years of the current Kyoto Protocol period (2010-2012). Of this amount, the EU has already pledged US$ 10.6 billion, Japan US$ 11 billion and the United States US$ 3.6 billion. The Accord further outlines a long term funding goal of eventually channelling US$ 100 billion per annum to developing countries by 2020. This amount – which is not guaranteed – will come from a variety of sources and will be used for enhanced action on mitigation, including substantial financial support to reduce emissions from deforestation and forest degradation, adaptation, technology development, technology transfer and capacity building. Even though US$ 100 million represents a significant amount, it is small relative to the size of the global economy and is below recent estimates of what the total cost of adaptation and mitigation will be by 2020. The African Union for example called for US$ 400 billion per year to manage climate change in Africa alone. 

To ensure accountability and transparency the developed countries tried to link climate change funding with international monitoring of national mitigation efforts. This move was resisted by developing countries, in particular China; claiming that such an oversight function would threaten their national sovereignty. However, in the end the Accord provides for a compromise in terms of which developing countries are expected to provide information on the implementation of their actions, for international consultations and analysis under clearly defined guidelines (to be adopted) which would make sure that national sovereignty is indeed respected.

Major progress has been made in recognising the importance of deforestation and forest degradation. Since 15 percent of greenhouse gas emissions come from the clearing of forests for timber and agriculture expansion, reducing emissions from deforestation and forest degradation (REDD) as well as the promotion of forest conservation, the enhancement of forest stocks and the sustainable forest management (REDD-plus) are crucial components of the climate change strategy. The Accord calls for the immediate establishment of a mechanism, including REDD-plus, to enable the mobilization of financial resources from developed countries. The developed countries of Norway, Japan, the United States, Britain, France and Australia have already pledged US$ 3.5 billion in short term funding for REDD-plus. Other issues mentioned in the Accord include the Technology mechanism to accelerate technology development and transfer, the creation of the Copenhagen Green Climate Fund to provide financial support and the establishment of a High Level Panel to investigate how to achieve the 2020 funding target of US$ 100 billion.

The political ‘take-it-or-leave-it’ agreement brokered by a few countries in the final hours of the negotiations might not be what most people have hoped for, but it does provide an initial framework for carbon reduction cooperation between developed and developing countries. The creation of the Copenhagen Accord saved the COP-15 negotiations from imminent failure, but its final success hinges on broad participation, strong commitments and effective implementation. 
  

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Special Features

Best wishes for the New Year

Trudi Hartzenberg will send her welcome message for 2010 in next week's Newsletter.
 

Weekly Customs, Excise, Tariff and Trade Remedy Summary Notification

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News

EU pressured SACU, says SA Trade Minister
The Southern African Customs Union (SACU) may suffer damage after the European Union (EU) put pressure on three of its members to sign the controversial interim Economic Partnership Agreement, South African Trade and Industry Minister Rob Davies has said in an interview.

EU trade nominee warns on carbon tax
Europe’s trade commissioner-designate Karel De Gucht warned on Tuesday that a carbon border tax could lead to a “trade war” after rejecting a policy that had gained traction in Europe following last month’s disappointing climate change summit in Copenhagen.

Global recovery faster but sustainability in question – IMF
Global economic recovery is faster and stronger than expected although there are still risks for its sustainability, head of the International Monetary Fund (IMF) for Europe Mr Marek Belka was quoted on Saturday as saying.

Core issues in Doha round unresolved – India
Key issues in the ongoing Doha round of world trade talks have still not been settled and it is too early to say whether the pact will be signed by the stated target of 2010, India’s chief negotiator in the round said on Monday.

SADC’s Free Trade Area slow to pick up
Members of the Southern African Development Community (SADC) are avoiding the implementation of some frameworks of the Free Trade Area (FTA), a grand intra-regional trade liberalisation programme which, despite its broad ambitions, is progressing at a snail’s pace.

2010 marks turning point for EAC
The implementation of the Common Market Protocol, which is set to take place in the next six months, will be a key focus area for the East African Community (EAC) in 2010, Secretary General Juma Mwapachu has said.

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Events

Workshop on Flexibilities in International Intellectual Property Rules and Local Production of Pharmaceuticals for the Southern Central and West African Region

7-9 December 2009, Cape Town.  Organised by the International Centre for Trade and Sustainable Development (ICTSD), United Nations Conference on Trade and Development (UNCTAD); The Federal Ministry for Economic Cooperation and Development (BMZ); and Capacity Building International  (InWent) with local collaboration with The Trade Law Centre for Southern Africa (tralac).  Read more here...

African Dialogue on Technology Transfer for Local Manufacturing Capacity on Drugs and Vaccines

10-11 December 2009, Cape Town.  Organised by the International Centre for Trade and Sustainable Development (ICTSD), United Nations Conference on Trade and Development (UNCTAD); with the support of the World Health Organization and the European Commission and local collaboration with The Trade Law Centre for Southern Africa (tralac).  Read more here...

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Publications

The World Trade Organisation: an African Perspective, more than a decade later

New book:  The World Trade Organisation: an African Perspective, more than a decade later:   The current Round of trade negotiations is the first 'Development Round.'  Given the challenges of addressing development issues in the context of trade negotiations in the WTO, which is not a development institution, it should not be surprising that the current negotiations are proving extremely difficult.  The WTO remains however the core of the rules-based system of international trade governance, providing also the rules for RTAs that are still growing rapidly, both in number and in scope and coverage.  The WTO was established in 1995 as the institutional anchor of the multilateral trading system.  Since then significant developments have taken place, on the trade agenda as well as in the participation of developing countries in the WTO.  This collection of papers provides an African perspective on the first decade of the WTO.  Substantive trade issues such as agriculture remain, despite their declining importance in terms of overall economic activity even in African countries, of key importance to Africa.  Key issues on the agriculture agenda are not addressed on the Regional Trade Arrangement (RTA) agenda and so the WTO remains the only forum within which to address these.  Africa is still engaging at the margins of the international economy and this collection of papers explores some of the challenges as well as prospects for Africa within the WTO.  Download the book here...

Measuring the gains from currency union membership in southern Africa

New working paper:  Measuring the gains from currency union membership in southern Africa by Johan Fourie and María Santana-Gallego.  African countries have latched on to growing empirical evidence that creating a currency union may result in large trade gains. This is based on the belief that lower transaction costs would lead to large increases in intra-regional trade volumes, augmenting growth. Yet there is growing evidence that not all countries may benefit from entering a currency union. This paper is an attempt to measure the gains from trade that are realised when entering a currency union. Using a standard gravity framework, we find that countries that decide to give up their currency and adopt an existing one or create a new common currency area stand to benefit significantly from a shared currency. However, these benefits are greater for a select few and the gains in terms of trade will depend on how open the country is and the intensity of trade flows with the other members of the currency union.  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 Prof. 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...

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AGOA.info

New AGOA trade data to November published

New trade data to November was released yesterday and updated on AGOA.info.

Aggregate exports from eligible African countries $ 39bn, while imports were valued at $ 12.7bn. These figures remain substantially weaker that comparative data for 2008, owing to much lower oil revenues this year. Of the $39bn in exports, over $29bn (77%) qualified for duty-free access under AGOA. See aggregate data here and AGOA data at this link .

Bill 4101 

Proposed amendments to AGOA legislation - HR4101

Bill 4101 was introduced by Sen. Bill McDermott during November 2009, and has been referred to the US Committee on Ways and Means. It is also known as the "New Partnership for Trade Development Act of 2009". Visit AGOA.info for further details.

Other AGOA data includes disaggregated bilateral trade profiles for each AGOA country individually (as well as within various regional configurations), 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.The recently completed quota period commenced in October 2008 and terminated in 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). For the new quota year (October 2009 - September 2011), the fill rate for October-November 2009 was 3.39% and 6.62% under the LDC sub-quota. A new overall quota has also been set: details at this link .

Latest AGOA news

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