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Building capacity to help Africa trade better

tralac’s Daily News Selection

News

tralac’s Daily News Selection

tralac’s Daily News Selection

Wednesday, 25 May: Enjoy tralac’s Africa Day 2016 bumper edition!

Building Bridges Programme: ‘African Economic Integration’ report launch, later today in Cape Town

African Economic Research Consortium: Bi-annual research workshop ‘Integrating African markets: the way forward’, 29 May - 1 June in Nairobi

Towards an integrated approach to the implementation of the Istanbul Programme of Action: perspectives from African and Arab LDCs (28 May, Istanbul)

Launched: the TFA4Africa website – ‘Making the WTO Trade Facilitation Agreement work for Africa’

Underway in Addis: Ministerial segment of the AU’s Specialized Technical Committee on Trade, Industry and Minerals

The Ministerial Session of the First AU Specialized Technical Committee on Trade, Industry and Minerals (STC-TIM), commenced on 23 May under the theme 'Promoting regional integration through trade and inclusive and sustainable Industrialization in Africa'. The key recommendations from the STC will be submitted for approval at the upcoming Summit in July in Kigali, Rwanda for the necessary political endorsement. Dr Stephen Karingi, Director Regional Integration and Trade Division at the UNECA, underscored the fact that UNECA’s analysis shows that Africa imported at an estimated $87bn worth of services from outside Africa and if barriers to trade are reduced in trade in services between African countries, Africa may be able to capture that business increasing the integration of its economies through higher cross-border flows of services within the continent. “Analysis done by UNECA suggests that a CFTA in goods alone would lead to an increased intra-African trade of around $55bn or 60% of its current level. If this is complemented by Africa taking trade facilitation measures that reduce trade costs by half, these increases would be even greater”, he specified. Commissioner Acyl acknowledged the progress made by the CFTA Negotiating Forum on the Rules of Procedure for the CFTA negotiating Institutions, the definition of guiding principles for the negotiations and formulated important recommendations.

Carlos Lopes: ‘We cannot afford to fail on the Continental Free Trade Area’ (UNECA)

Bringing the CFTA into effect will not be easy. But utilizing a draft template agreement in the negotiations will make success more likely and achieved more quickly. However, to ensure political credibility, such an approach requires high level institutional endorsement. A political decision is required calling for the CFTA negotiations to be prioritized over all other intra-African and extra-African trade negotiations. This would ease capacity and financial pressures, but more importantly ensure that the CFTA provides a pan-African outcome with a single economic space and common trade and investment rules. Africa is running out of time. If the first flagship programme of Agenda 2063 is set to fail then we will be in trouble.

Trade winds (Bangkok Post)

However, Xavier Carim, the South African ambassador to the WTO, has concerns about the growing number of regional agreements. "What we are seeing is less attention and interest in trying to pursue negotiations in the multilateral context and more effort being put into these plurilateral and regional arrangements," he said. "That has significant impact on the amount of energy and effort that members put into negotiations under at WTO. "When there is no agreement on the main issues on the multilateral level, the likelihood is that plurilateral [agreements] will become more prevalent in the future." For African nations, he said, a fragmented approach to resolving issues among small groups should not be the "main option" but rather the focus should be on strengthening the multilateral system.

AfDB to establish five regional integration, business delivery offices: Akinwumi Adesina's speech at Annual Meetings (AfDB)

In order to make the Bank more efficient and to deliver on the High 5s, we have decided to move the bank closer to its clients. As part of its new development and business delivery model, the bank will now establish five regional integration and business delivery offices, one each for West, East, Central, Northern and Southern Africa. They will each be led by newly created positions of Directors General. The Directors General will have the full responsibility of spearheading the Bank's operations in each of their respective regions. Senior sector staff will be posted to each of the regions and they will be fully part of the delivery team in each of the regions. The Bank will strengthen its relationships with each of our member countries, paying particular attention to the needs of fragile states. These regional development and business delivery hubs will significantly strengthen our engagement with the regional economic communities to drive major regional integration projects. These landmark institutional reforms will make us faster, more efficient and effective in delivering greater developmental impacts all across Africa. We will drive a new performance contract system and culture of accountability for results all across the Bank. [Full text, pdf]

Regional integration for Africa: could stronger public support turn ‘rhetoric into reality’? (Afrobarometer)

In its latest round of surveys, Afrobarometer asked citizens in 36 countries four relevant questions: whether they prefer free or restricted cross-border movement of people and goods, how easy or difficult cross-border movement currently is, whether governments should assume a regional role in protecting democracy and human rights or instead respect their neighbours’ sovereignty, and how helpful they think the AU and RECs are to their countries. Findings suggest limited support for integration, with wide variations by country and region. On average across 36 countries, a majority of Africans favour free cross-border movement of people and goods, but this is not the majority view in 15 of those countries. Meanwhile, only one in four citizens say it’s easy to cross international borders. When asked to choose between respecting national sovereignty vs. a regional role for states in protecting free elections and human rights in neighbouring countries, most Africans emphasize national sovereignty. And while a majority of Africans consider the AU and RECs at least “a little bit” helpful to their countries, this is not the case in all countries, and about three in 10 citizens don’t know enough about these organisations to have an opinion.

Africa’s digital identity: ID4Africa holds successful first day

African Peace and Security Architecture Road Map (2016-2020): UNSC debate, Presidential Statement (UN)

The Council reiterated its intention to boost consultations with the African Union in that regard, and to plan collaborative field missions “to formulate cohesive positions and strategies on a case-by-case basis in dealing with conflict situations in Africa”. It welcomed international and bilateral support for building the bloc’s peace and security capacities, reiterating, however, the responsibility of regional organizations to secure their own resources. Recognizing the challenge of securing “predictable, sustainable and flexible resources”, the Council encouraged further dialogue on options for addressing that issue. Mr Macharia Kamau (Kenya), Chair of the United Nations Peacebuilding Commission, said the Peacebuilding Commission had worked closely with the African Union and its regional economic communities to increase synergies and enhance the coherence and complementarity of joint peacebuilding efforts. The Commission intended to use momentum from Council resolutions to further enhance and institutionalize that cooperation.

SADC: Outcomes of the ministerial workshop on food security and poverty eradication

The workshop identified the following critical issues and interventions: a) Slow pace of domestication and implementation of regional integration instruments (Protocols, policies and strategies) at Member State level. The region has developed a number of strategic instruments, including the Regional Indicative Strategic Development Plan (RISDP), the Dar-es-Salaam Declaration and Action Plans on Agriculture and Food Security, the Regional Agricultural Policy, the Declaration on Poverty Eradication and Sustainable Development and the Regional Poverty Reduction Framework to address food security and poverty. However, the main challenge remains the slow pace of domestication and implementation of these regional instruments at the national level. The Workshop recommended that the SADC Chairperson should champion a binding monitoring and evaluation mechanism for continental and regional commitments. To this effect the SADC Secretariat should be empowered and capacitated to monitor and report to Summit.

Agricultural subsidies in SADC countries: current status and impact (Finmark Trust)

What has become evident in all the research, desktop and on the ground, is that there is not yet a sufficient consensus within SADC countries, or in the regional body, about the value and purpose of agricultural input subsidies. A wide variety of approaches and practices around subsidies is evidence of a plethora of views on the matter. The analysis also shows that in many cases subsidies are implemented with a high administrative burden, making for an inefficient environment for support programmes. The goal of SADC to harmonise approaches to agricultural investments is to be commended, and a key point of leverage. The recently adopted SADC Regional Agricultural Policy requires each member state to develop a National Agricultural Investment Plan. Some countries, like the Seychelles, have done so, but most are awaiting further guidance from the Secretariat. It is the stated intention of the SADC Secretariat to develop a set of guidelines for the development of these plans during the course of 2016. The content of these Guidelines will be critical in determining the investment patterns in SADC countries over the next few years, and it is recommended that a submission should be made by FinMark Trust in this regard. [Rockefeller stakes $1m for cassava (East Africa Business Week)]

China and India’s GDP will be hit hardest by global food price shock (UNEP, Global Footprint Network)

Smart thinking will keep SA’s motor industry on course (Business Day)

When a South African-built Volkswagen Polo goes on sale in London, its landed price needs to compete with a Polo built in Spain, for example. As an exporter, our competitors are not in Durban or Pretoria; but in China, Eastern Europe and other low-cost manufacturing hubs with vast economies of scale. We simply cannot lose our edge on labour costs. Other challenges, such as our geographical location, put pressure on our global competitiveness. While South African ports are world-class, they are simply too expensive — in some case, 700% higher than other major export hubs. In addition, notions that VW SA has benefited significantly from the rand’s recent weakness are misguided because we are still a major importer. [The author, Thomas Schaeffer, is chairman and MD of Volkswagen Group SA] [Toyota ramps up Durban capacity (Business Day)]

Kenya sends team to Australia for talks with SGR manager (Business Daily)

Transport and Infrastructure ministry is set to deploy a team of bureaucrats to Melbourne as Kenya starts negotiating the terms under which Australian construction firm, John Holland, will manage the Standard Gauge Railway. John Holland, which is said to have 65 years of experience in engineering servicing, contracting and managing rail projects, became a subsidiary of China Communications Construction Company following an acquisition deal finalised in 2015.

Chinese loans useful for Kenya’s progress (Daily Nation)

Reports that loans from China would burden Kenyans for generations are sensational and patently untrue. The loans and projects will not bring any additional burden to Kenya, but should greatly boost economic and social development if well deployed. China’s assistance is not structured to be exploitative, not only because of the long-standing friendship with Kenya dating back to the 15th century, but also because the development trajectory of the two countries is quite similar. By the end of 2015, China’s Exim Bank had provided 26 loans to Kenya, most with lending rates far below the international market one and with a longer grace period. During this grace period, only interest is paid. [Dr Guo Ce is the China's economic and commercial counsellor, Kenya]

Sam Jones: 'Growth is not enough for Mozambique’s informal workers' (World Bank Blogs)

The lack of structural transformation in the economy is reflected in the structure of employment. The vast majority of households continue to rely on informal, smallholder agriculture. While service sector employment has grown over the past decades, this has been driven primarily by informal commerce, rather than activities that add significant economic value. Indeed, by any reasonable definition, at least half of the population remains absolutely poor. This blog post considers whether the informal sector merits special attention; and, if so, what kind of policy stance is recommended.

Jiangsu-SADC Forum of Investment and Development held in Nanjing

ECOWAS develops new statutes to reposition ‘Council of the Wise’

EALA members respond to State of EAC Address

India-Africa Incubation Centre for Harare (The Herald)

Zimbabwe: Govt steps up probe into diamond money saga (The Herald)

Tanzania: Govt gives nod to 21 unofficial ports after meeting standards (IPPMedia)

South Africa: The end of the road for Competition Commission (City Press)

Lessons from Brazil inspires a Ugandan experiment to increase coffee production (Daily Monitor)

China’s ‘new normal’ in international investment agreements (Columbia Center on Sustainable Investment)

These cases suggest that Chinese investors, especially certain large SOEs, are now more inclined to resort to ISDS. SOEs’ interest in ISDS may be partly attributed to China’s “go-out” policy. Chinese firms’ rare utilization of IIAs before 2010 may be due to their unfamiliarity with, and insufficient emphasis on, ISDS. China and Chinese firms realize now the importance of ISDS and are prepared to participate in the system, respectively as respondent and as claimants. Second, China has now adopted a broader perspective toward IIAs with respect to its treatment clauses. Though China had been opposed to pre-establishment national treatment for decades, this standard has recently been adopted in several circumstances, including the China-United States BIT negotiations. [The analyst: Qianwen Zhang]

Background reports prepared for OECD’s Working Party on Communication Infrastructures and Services Policy: The internet of things: seizing the benefits and addressing the challenges, Digital convergence and beyond: Innovation, investment, and competition in communication policy and regulation for the 21st century

David Lipton: ‘Can globalization still deliver?’ (Stavros Niarchos Lecture, PIIE/IMF)

Tweet by @sdonnan: Another grim month for world trade in March, says CPB, as volumes contracted in first quarter.

US blocks Korean judge from WTO Appellate Body (Bloomberg)


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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 350 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome.

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