Topics publications: Global trade governance
Trade Briefs
Are EPAs still on the African Agenda?
The Economic Partnership Agreements (EPAs) date back to the signing of the Cotonou Agreement (the ACP-EU Partnership Agreement) in 2000. Since that time, it has been the framework for the EU’s relations with 79 countries from Africa, the Caribbean and the Pacific (ACP). The trade chapter of the Agreement reflects the need for a new trade relationship with the EU and the conclusion of legal instruments reflecting the expiry of non-reciprocal preferences at the end of 2007. It affirms the role of the EPAs as WTO compatible instruments which should boost economic development and integration into the world economy. Good governance would be gained as part of the journey.
There have been intensive negotiations with groups of African states to conclude specific EPAs, but progress has been slow and implementation has been unimpressive. Overall the EPAs do not live up to the original expectations. Why has this been such an arduous journey? Has the time arrived for an honest re-assessment of the validity of the aims and objectives, the approach towards delivery, and the impact of global and regional developments since the original negotiations started 17 years ago? The world is a different place now.
From the viewpoint of what modern trade agreements should provide for, the scope of African EPAs looks decidedly outdated. They cover only trade in goods, despite evidence that the real new gains lie in areas such as services (and the synergies between services and trade in goods), trade facilitation, and better governance.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
First contours of a new American-African Policy and a new Era of Trade with the North?
This Trade Brief looks at some of the implications for Africa of the election of Mr. Donald Trump as the 45th American President, as well as considering broader international trade issues and the future of Africa’s trade relations with the North.
Africa did not figure in the recent American Presidential election campaign. Neither of the two candidates offered ideas on how they would deal with Africa. Though Africa will not top the list of Washington’s policy priorities, some officials will surely have started drafting memoranda on an African policy. What could such a policy look like?
Geopolitical and security interests in particular should prompt a closer look at the benefits of formalising ties with Africa, or specific African nations. Certain long-term calculations need to be made; while recalling the African legacy of Presidents Bush and Obama in terms of humanitarian aid, development assistance, and energy. African leaders too should start planning for new initiatives. African-American trade and American aid programmes are important, AGOA brings many benefits, and new investments are necessary for local development plans.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Britain’s 12 Point Brexit Plan: First Impressions
On 17 January 2017, the British Prime Minister announced her Government’s “Twelve Point Plan” for exiting the European Union (EU). It describes how the Brexit negotiations will be approached (to be conducted in terms of Article 50 of the Lisbon Treaty), possible transitional arrangements, and how the UK’s future trade dispensation might look.
The British government has been criticised for the long delay in developing the UK’s exit strategy; causing uncertainty in the markets, for investors, and among trading partners. The result of the Brexit referendum was announced on 23 June 2016. It took six months to announce the objectives which will be pursued once Article 50 is formally triggered in March this year. British firms (and the general public) now know the general outline of the UK’s Brexit strategy. However, it will take a long time before all the negotiations will be completed and the restructuring of domestic trade governance in the UK will be accomplished.
In this first tralac commentary since the announcement of Britain’s plan for exiting the EU, we look at the most important aspects of Prime Minister May’s speech and remark on some of the implications for Southern African nations. Additional analyses of the Brexit process will be published in the course of this year as the direction of the negotiations become clearer.
Making matters more complicated, Britain’s Supreme Court ruled on 24 January 2017 that Prime Minister May needs an Act of Parliament to trigger Article 50 of the Lisbon Treaty. The political bargaining which may now follow has introduced a new challenge for the Brexit process. We include a discussion of some of the implications of obtaining Parliament’s support before the exit process can formally get under way.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Looking towards 2017: A Framework for Speculating about the Global Picture
Implications of the election of Donald Trump as the next United States president currently dominate discussions about geopolitical developments and the prospects for international trade, but there are other concerns too. Commentaries and speculations range from warnings that Trump’s election will “mark the beginning of a new and darker global order”, that anti-globalists are on the march, and that right-wingers will win several European elections; to warnings about a trade war between the US and China. Growing inequality is said to have de-legitimized globalism.
African countries are facing specific challenges in today’s global economy; in particular, reacting to new US policies and dealing with the consequences of Brexit. They have the opportunity to change their relationship with the US (and take some degree of ownership of that process) instead of responding only to matters which Mr. Trump’s administration will raise. This can include security cooperation.
Proactive responses are necessary. Securing a certain and predictable trade environment with the UK and the EU should top African leaders’ list. This includes a specific strategy to deal with a protracted interim phase before a new FTA with the UK will be on the cards. For the SACU leaders these challenges are even more urgent. The recently-concluded EU-SADC Economic Partnership Agreement needs long-term certainty and uninterrupted implementation; while Washington may press them for a bilateral trade deal.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Trade policy review for 2016: is there a trump card?
Several key events took place during 2016 that may collectively result in a turning point for trade liberalisation around the globe. South Africa, and perhaps more importantly Africa, will be influenced by many of these events. The objective for this paper is to outline and examine some of the key events and place a special emphasis on how they may impact on South Africa’s trade policy. This examination is however undertaken at a time of much uncertainty, with that uncertainty mostly about the trade policies that will be pursued by the incoming United States’ President in the wake of his prolific rhetoric during his election campaign.
Two of the major political events that stunned the world during 2016, were the so-called Brexit vote for the United Kingdom (UK) to exit the European Union (EU) and the election of Donald Trump to be the next United States (US) President. It is well to remember that in both cases the votes were triumphs for democracy in two of the world’s longest standing democratic countries. People voted and this was the result. Looking deeper into the underlying reasons for the outcome in each case is the generally accepted view that these were protests against the establishment and so-called ‘people power’ calling for change. These underlying causes seem to be both simplistic and complex at the same time. They are simplistic in the sense that in the UK people were worried about the economic situation in Europe and the dividing gap between the struggling south and the prosperous north and the bogey of an immigration wave, while in the US it seemed to be a vote between two candidates whom few felt much affinity towards, and a message to the establishment. Yet it is the complex under-the-surface factors that are the important ones, and these are likely to influence short to medium term policies in both countries, and of course given the role of both countries on the world stage these quickly transmit through to global implications.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
The EPA story and Implications of Brexit
The objective of this paper is to set the background for a discussion and analysis of the EAC-EU Economic Partnership Agreement (EPA) and the implication of Brexit on the overall trade relations between Kenya and the UK. The first and most obvious point it that there is currently great uncertainty on many issues, and that virtually all of trading partners with the UK are in the same position. There will therefore be an involved and time-consuming process as everyone tries to get their place in the queue to discuss several different issues with the UK.
The irony for Kenya and indeed Africa is that the ink is not yet dry on Kenya’s signing of the EPA after a long and almost tortuous process when the Brexit outcome dramatically altered the policy landscape with Kenya’s main trading partner in the EU. We start this paper by describing in detail the evolution of the trade agreements through to the ink-is-still-wet signing of the EPA, and then outline Kenya’s trading profile with the EU and the UK. This profile is set against the role of the East African trading partners in both Kenyan trade overall and the EAC-Kenyan profile with the EU. We introduce some of the many other factors such as the possible impacts of Brexit on the UK Pound and these implications for Kenya and other trading partners.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
While South Africa slept: why is it not like an Asian economy?
Over the last fifty years or more the most remarkable feature of global economic growth has been the growth demonstrated by the so-called ‘Asian Tiger’ economies (Hong Kong, Singapore, South Korea, and Taiwan). After the early leadership in growth by Japan we saw the next group (Singapore, Hong Kong, Korea and Taiwan) progress through the developmental stages to become modern high-income countries. This group was followed by the next wave of countries (loosely Malaysia, India and perhaps China with the latter being more of a tsunami than a wave), and then possibly Thailand and Indonesia. More lately we are seeing the ‘Tiger Cubs’ (Vietnam, Laos – the Lao People’s Democratic Republic – and Cambodia). The missing aspirant here is the Philippines, which started with a growl that faded to a whimper.
The objective of this paper is to assess the economic profile and progress of South Africa against these Asian growth economies, with special reference to the role of manufacturing in their growth and to ask if South Africa’s aspirations to emulate these growth patterns are realistic. We concur that South Africa did not capitalise on the opportunities it had in the 1990s (and later) to move forward from its then strong industrial base and large pool of cheap labour to emulate the Asian success. We appreciate that South Africa was emerging from a troubled period in its history, but we counter this by pointing out that China, Vietnam, Cambodia and Laos were all similarly emerging from their own troubled periods.
The paper starts by examining growth rates from the early 1960s, and shows that over this period and, more importantly, over a period from around 1990 South Africa has not been measuring up to Asian standards. Much has been written on the so-called Asian growth miracle, and driving this wave have been a complex mix of factors and policies. But two common themes emerge, namely their industrialisation with the emphasis on exports to the United States of America (US) and their ability to build a sound economic and overall infrastructural base from which to launch this development assault. Are these options open for South Africa? Current policy indications are that they are not.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Trade Implications of Brexit for South African Agricultural Trade and Trade Policy
The objective of this paper is to set the background for a discussion and analysis of the old Trade Development and Cooperation Agreement (TDCA) and its replacement the SADC Economic Partnership Agreement (EPA), and the implication of the decision by the United Kingdom (UK) to leave the European Union (EU) – the so-called Brexit. The examination concentrates on South African agricultural exports, with agriculture as defined by the World Trade Organisation (WTO) Agricultural Agreement.
We will examine South African (SA) agricultural trade with the EU and isolate the UK component to assess these possible Brexit issues. This is necessary as just when it looked as though the new TDCA/EPA trade relationships with the EU were somewhat settled the UK has thrown a curve ball by voting to leave the EU. There will be a period of considerable uncertainty and significant trade negotiating issues ahead. This will give South Africa (and all UK other partners) a renewed opportunity to re-negotiate trade access into an isolated UK in its own right rather than as a part of the greater Europe.
One of the important reasons for South Africa to participate in the EPA negotiations while it was still phasing in the provisions of the TDCA was that it wanted to harmonize the trading regime between SACU as a whole and the EU rather than have two separate agreements. With SADC-EPA it ensures that common external tariffs are maintained in all the trading partners and provide South Africa with an opportunity to correct some of the imbalances of TDCA, and particularly in agriculture. The political landscape has now changed.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Governance Implications of South Africa’s Withdrawal from the International Criminal Court
Media reports described South Africa’s recently announced withdrawal from the International Criminal Court (ICC) as showing “startling disregard for justice from a country long seen as a global leader.” Amnesty International said South Africa was “betraying millions of victims of the gravest human rights violations and undermining the international justice system”.
The political fallout of this decision can be huge; South Africa played a dominant role during the 1990s in the setting up of the ICC. Other African nations may follow suit, which will undermine the effectiveness of what has become a unique forum to deal with international crimes and grave human rights violations. Burundi already said it would withdraw, and Namibia and Kenya have raised similar plans. The ICC has been criticized as targeting African leaders, despite issues of admissibility of cases being governed by the Rome Statute. As a rule the Court does not select its own cases.
The South African withdrawal announcement came unexpectedly. There was no explanation on how the matter was decided or why it was urgent. The announcement was accompanied by a statement that the Government is now also abandoning its appeal against the 2015 Judgment by the High Court of South Africa which found that, as a question of applicable law, the Government was compelled to arrest President Bashir pending a formal request for his surrender from the International Criminal Court for war crimes, crimes against humanity and genocide. That judgment also found that the conduct of the Government was inconsistent with the Constitution of the Republic of South Africa and invalid.
The reasons offered by the South African Government as to why it is withdrawing from the ICC are discussed here, together with some of the domestic and International legal principles which now come into play. There are broader governance issues and they will also be mentioned.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
WTO Trade Facilitation Agreement: Developments since Bali
The landmark decision by the World Trade Organisation (WTO) members in December 2013 in Bali at the 9th Ministerial Conference on a Trade Facilitation Agreement (TFA) remains the most key of recent achievements of the WTO, the first multilateral trade agreement concluded since the establishment of the WTO in 1994 by the Marrakesh Agreement, commonly referred to as the WTO Agreement.
After the historic agreement by the 9th Ministerial Conference in Bali, the rest of the work on the finalisation of the TFA was assigned to the WTO General Council. The General Council, which consists of the entire WTO membership, was mandated by the 9th Ministerial Conference to undertake all preparatory work necessary to bring the TFA into force. The major work to be done was the preparation and adoption of the Protocol of Amendment to the WTO Agreement.
This paper explores developments following the endorsement of the TFA by WTO members in December 2013. In particular the paper will take stock of the members that have ratified the TFA to date, including a review of the trade facilitation measures that the countries have notified to the WTO under the different categories. More focus will be on the African countries, members of the WTO that have made notifications. Such focus would assist in informing the negotiations under both the Tripartite Free Trade Area (TFTA) and the envisaged Continental Free Trade Area (CFTA). The paper will attempt to discern any trends in the notifications by these African countries as that would assist members of both the TFTA and the CFTA in developing regional approaches to trade facilitation under the envisaged new Free Trade Areas.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.