News Archive October 2017

Azevêdo: Global trading system has constructive role to play to help drive inclusivity

Speaking at a Trade Dialogues conference on “Technology, Globalisation and World Trade Governance” on 30 October, Director-General Roberto Azevêdo highlighted the important role the multilateral trading system can play to help maximise the opportunities presented by technology and to mitigate any adverse effects.

He said that new technologies are completely transforming the way in which goods, services and information are produced and exchanged so “we need to respond and adapt”. He added: “Working together, we can ensure that the global economic system is more inclusive, and that its benefits can reach everyone.” This is what he said:

Welcome to the WTO and to this Trade Dialogues event.

At the outset, let me thank the Graduate Institute and the Centre for Trade and Economic Integration for organizing this event today. Over the years our institutions have developed an important partnership. I am glad to strengthen this dialogue today.

We created the Trade Dialogues initiative at the WTO exactly for this purpose: to create a platform to interact with the wider trade community. We wanted to ensure that stakeholders could highlight issues they find important, enrich debates, and help spark conversations at the organization.

Academia, of course, is a very important interlocutor. As incubators of new ideas, you help bring different perspectives to the table. I think that this exchange is very important. It helps to ensure that research is relevant and that policy making is informed.

And I think that our discussion today is indeed very timely.

Today’s event looks at different future trends in trade – especially at the impact of new technologies in economies and societies. This is a topic at the forefront of many debates across the globe.

However, I also think that the timing of this event is also particularly fortunate. Today – the 30th of October – marks the 70th anniversary of the signing of the GATT, the WTO’s predecessor.

The GATT was created as one of the first multilateral trade instruments. When it was signed in 1947, it was considered to be the most far reaching negotiation ever undertaken in the history of world trade.

And while it has helped shape the multilateral trading system as we know it today, I think that when founders created the GATT, they could not have foreseen how much the world economy would change. Nor could they foresee how deep and challenging these changes would be.

For example, the multilateral trading system itself is much more diverse and inclusive.

The GATT had 23 founding members, accounting for around 70 percent of world trade. Today, the WTO has 164 members, in all stages of development, accounting for around 98 percent of world trade.

But also in comparison to 1947, another big structural change is happening. Automation, digitization and new business models are revolutionising the global economy.

New technologies are completely transforming the way in which goods, services and information are produced and exchanged.

Of course, this process is not new. Steam and the first machines powered the industrial revolution in the 19th century. Electricity, the assembly line and mass production enabled the large leap in living standards of the 20th century. And we progressively adapted to these changes, particularly in the job market.

But now in the 21st century, what is unprecedented is the pace and speed of these new technological developments.

Thanks to innovations like containerization to fibre optics, production stages happen in different countries.

In the 1980s, Toyota produced cars that were “Made in Japan”; today it produces cars that are “Made in the World”, with supplies and components coming from a score of different countries.

The internet has also had a huge impact on the way we trade.

Trade in services, data and information is surging across digital platforms. And we know that traditional trade in manufactured goods, agricultural products or natural resources is also increasingly enabled by digital technologies.

Between 2013 and 2015, the value of online trade jumped from 16 trillion to 22 trillion dollars – expanding the opportunities worldwide. This will continue to grow rapidly. It is estimated that e-commerce sales will rise by over 23 percent in 2017 alone.

All this presents many opportunities to leverage trade as a tool to promote growth and development. At the same time, this unprecedented technological advance is also driving big structural changes in labour markets.

Productivity gains from new technologies are reducing the demand for labour in more traditional sectors, such as agriculture or manufacturing.

In the year 1900, almost half of all workers in France were employed on farms. Today, the figure is less than 3 percent. In fact, in some economies 8 out of 10 job losses in manufacturing are due to higher productivity, not cheaper imports.

Of course, this so called “fourth industrial revolution” is not going to make all our jobs disappear. But it is bringing huge changes. And while these processes have brought progress overall, we need to recognise that not everybody has been able to benefit and participate.

We need to respond to this and adapt. This is a challenge facing governments and societies everywhere – in both developed and developing economies.

To help inform this conversation, we dedicated this year’s World Trade Report exactly to the topic of technology, trade and jobs. Earlier this year we also launched a joint report with the ILO that looks at the relationship between technology, trade and skills in today’s economy.

Those reports have generated some interesting debates. And it was clear from those conversations that sustainable and balanced economic progress will hinge on the ability of economies to adjust to changes and promote greater inclusiveness.

And while there may not be a ‘one size fits all’ recipe to deal with these challenges, some policies can play an important role here. They include, for example:

  • more active labour market policies,

  • the provision of support for workers, and

  • education policies to equip people with the right skills to participate in an information-driven global economy.

A great deal of these efforts will have to happen at the domestic level. And I also think that the multilateral trading system has a constructive role to play to help drive inclusivity.

While the basis of this system was established 70 years ago, I think that its architecture – underpinned by principles such as transparency, predictability and non-discrimination – remain fundamental to the proper functioning of the global economy today.

At a more fundamental level, we all saw the value of the trading system during the financial crisis. In the 1930s, protectionist measures wiped out two-thirds of trade flows – with devastating consequences.

In the crisis of 2008 we did not see the same escalation – precisely because governments knew they were bound by common rules. They held each other to the agreed standards. And these agreed standards are quite clear. We know when red lines are crossed – which we did not see in the 1930s.

Our monitoring shows that trade restrictions imposed by the G20 economies since the 2008 crisis cover just 4.25 percent of world trade. This shows that the system is doing what it was created to do.

At the same time, I think that we can do more to ensure that the system is more inclusive, that it addresses the challenges of our times – while also upholding these essential principles.

This is, ultimately, in the hands of members. And I think we have some good foundations to build on.

Recent WTO achievements at the WTO’s Ministerial Conferences in Bali and Nairobi show that members can deliver meaningful outcomes to support growth, development, inclusiveness and job creation.

Our next Ministerial Conference is in Buenos Aires this coming December, and it can be another opportunity for progress.

Conversations are ongoing on a number of fronts. I hope that we will leave Buenos Aires with members committed to strengthening the trading system, and with a clear path forward for our future work.

The global trading system has been – and will remain – a work in progress. We have come a long way in recent years – and now we must go further.

Especially at a time of fast economic change, we need to ensure that the multilateral trading system can help maximise the opportunities presented by technology, and help mitigate any adverse effect.

Working together, we can ensure that the global economic system is more inclusive, and that its benefits can reach everyone.

I wish you a successful event and look forward to hearing from your discussions.

Thank you.

0a
1 ~ 940

South Africa Merchandise Trade Statistics for September 2017

South Africa trade surplus well below expectations

South Africa’s trade surplus decreased to R4.00 billion in September of 2017 from an upwardly revised 5.98 billion surplus in August, and below market expectations of a R7.0 billion surplus.

Exports decreased 1.6 percent after an 11 percent jump in August while imports advanced at 0.4 percent. Considering the January to September period, exports increased 5.4 percent and imports decreased 1.2 percent, shifting the country’s trade balance into a R47.1 billion surplus from a R6.7 billion gap in the same period of 2016.

Compared with the previous month, exports decreased to R101.8 billion from R103.4 billion, led by a fall in shipments of base metals (-12 percent); vegetable products (-16 percent); chemical products (-15 percent) and precious metals and stones (-6 percent), while vehicles and transport equipment (14 percent) and mineral products (7 percent) rose. Major destinations for sales were China (9.9 percent); the US (8.2 percent); Germany (6.1 percent); India (6 percent) and Japan (4.9 percent).

Imports advanced to R97.8 billion from R97.4 billion, due to higher purchases of vegetable products (107 percent); mineral products (5 percent); chemical products (5 percent); prepared foodstuffs (11 percent) and animals and vegetable fats (47 percent). Imports came mostly from China (17.9 percent of total imports); Germany (11.8 percent); the US (6.7 percent); Saudi Arabia (4.7 percent) and India (4.2 percent).

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country posted a trade deficit of R4.3 billion in September compared to a R1.9 billion gap in August.


The South African Revenue Service (SARS) today releases trade statistics for September 2017 recording a trade balance surplus of R4.00 billion. These statistics include trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS).

The year-to-date (01 January to 30 September 2017) trade balance surplus of R47.12 billion is an improvement on the deficit for the comparable period in 2016 of R6.66 billion. Exports for the year-to-date grew by 5.4% whilst imports for the same period declined by 1.2%.

Including trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)

The R4.00 billion trade balance surplus for September 2017 is attributable to exports of R101.76 billion and imports of R97.76 billion. Exports decreased from August 2017 to September 2017 by R1.61 billion (1.6%) and imports increased from August 2017 to September 2017 by R0.36 billion (0.4%).

Exports for the year-to-date (01 January to 30 September 2017) grew by 5.4% from R818.59 billion in 2016 to R862.61 billion in 2017. Imports for the year-to-date of R815.49 billion are 1.2% less than the imports recorded in January to September 2016 of R825.25 billion, leaving a cumulative trade balance surplus of R47.12 billion for 2017.

On a year-on-year basis, the R4.00 billion trade balance surplus for September 2017 is a deterioration from the surplus recorded in September 2016 of R7.01 billion. Exports of R101.76 billion are 2.6% more than the exports recorded in September 2016 of R99.22 billion. Imports of R97.76 billion are 6.0% more than the imports recorded in September 2016 of R92.21 billion.

August 2017’s trade balance surplus was revised upwards by R0.04 billion from the previous month’s preliminary surplus of R5.94 billion to a revised surplus of R5.98 billion as a result of ongoing Vouchers of Correction (VOC’s).

Trade highlights by category

The main month-on-month export movements: R’ million

Section:

Including BLNS:

Base Metals

-R1 480

-12%

Vegetable Products

-R1 214

-16%

Chemical Products

-R1 030

-15%

Precious Metals & Stones

-R1 025

-6%

Vehicles & Transport Equipment

+R1 662

+14%

Mineral Products

+R1 700

+7%

Total

-R1 387

86%

Total Movement

-R1 612

100%

 

The main month-on-month import movements: R’ million

Section:

Including BLNS:

Vegetable Products

+R1 782

+107%

Mineral Products

+R 717

+5%

Chemical Products

+R 544

+5%

Prepared Foodstuff

+R 374

+11%

Animals/Vegetable Fats

+R 301

+41%

Precious Metals & Stones

-R 229

-18%

Textiles

-R 384

-9%

Vehicles & Transport Equipment

-R755

-8%

Machinery & Electronics

-R979

-4%

Original Equipment Components

-R1 105

-12%

Total

+R 266

74%

Total Movement

+R 362

100%

Trade highlights by world zone

The world zone results from August 2017 (revised) to September 2017 are given below.

Africa:

Exports: R26 794 million – this is a decrease of R 941 million from August 2017.
Imports: R10 511 million – this is a decrease of R 383 million from August 2017.

Trade Balance surplus: R16 283 million – this is a deterioration of R 559 million in comparison to the R16 841 million surplus recorded in August 2017.

America:

Exports: R10 038 million – this is an increase of R 66 million from August 2017.
Imports: R10 551 million – this is an increase of R 631 million from August 2017.

Trade Balance deficit: R 513 million – this is a deterioration of R 565 million in comparison to the R52 million surplus recorded in August 2017.

Asia:

Exports: R35 537 million – this is an increase of R4 077 million from August 2017.
Imports: R43 189 million – this is a decrease of R 471 million from August 2017.

Trade Balance deficit: R7 652 million – this is an improvement of R4 548 million in comparison to the R12 200 million deficit recorded in August 2017.

Europe:

Exports: R22 983 million – this is a decrease of R2 727 million from August 2017.
Imports: R31 864 million – this is an increase of R 535 million from August 2017.

Trade Balance deficit: R8 881 million – this is a deterioration of R3 262 million in comparison to the R5 619 million deficit recorded in August 2017.

Oceania:

Exports: R1 393 million – this is a decrease of R 3 million from August 2017.
Imports: R1 394 million – this is a decrease of R 66 million from August 2017.

Trade Balance deficit: R1 million – this is an improvement of R 62 million in comparison to the R 63 million deficit recorded in August 2017.


Excluding trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)

The trade data excluding BLNS for September 2017 recorded a trade balance deficit of R 4.31 billion. This is a result of exports of R90.11 billion and imports of R94.42 billion.

Exports decreased from August 2017 to September 2017 by R1.44 billion (1.6%) and imports increased from August 2017 to September 2017 by R1.01 billion (1.1%).

The cumulative deficit for 2017 is R21.69 billion compared to R85.99 billion deficit in 2016.

Trade highlights by category

The main month-on-month export movements: R’ million

Section:

Excluding BLNS:

Vegetable Products

-R1 169

-16%

Precious Metals & Stones

-R1 168

-7%

Base Metals

-R 1 478

-13%

Chemical Products

-R 989

-18%

Vehicles & Transport Equipment

+R1 703

+16%

Mineral Products

+R1 756

+8%

Total

- R1 392

94%

Total Movement

- R1 438

100%

 

The main month-on-month import movements: R’ million

Section:

Excluding BLNS:

Vegetable Products

+R1 791

+111%

Mineral Products

+R 726

+5%

Chemical Products

+R 577

+6%

Prepared Foodstuff

+R 421

+14%

Animals/Vegetable Fats

+R 309

+42%

Plastic & Rubber

+R 164

+4%

Precious Metals & Stones

+R 156

+34%

Textiles

-R 430

-12%

Vehicles & Transport Equipment

-R 763

-8%

Machinery & Electronics

-R 951

-4%

Original Equipment Components

-R1 105

-12%

Total

+R 895

88%

Total Movement

+R1 014

100%

Trade highlights by world zone

The world zone results for Africa excluding BLNS from August 2017 (Revised) to September 2017 are given below.

Africa:

Exports: R15 141 million – this is a decrease of R767 million from August 2017.
Imports: R7 170 million – this is an increase of R269 million from August 2017.

Trade Balance surplus: R7 971 million – this is a deterioration of R1 037 million in comparison to the R9 007 million surplus recorded in August 2017.


Botswana, Lesotho, Namibia and Swaziland (Only)

Trade statistics with the BLNS for September 2017 recorded a trade balance surplus of R8.31 billion. This is as a result of exports of R11.65 billion and imports of R3.34 billion.

Exports decreased from August 2017 to September 2017 by R0.17 billion (1.5%) and imports decreased from August 2017 to September 2017 by R0.65 billion (16.3%).

The cumulative surplus for 2017 is R68.81 billion compared to R79.32 billion in 2016.

Trade Highlights by Category

The main month-on-month export movements: R’ million

Section:

BLNS:

Machinery & Electronics

-R 82

-5%

Mineral Products

-R 57

-3%

Vegetable Products

-R 45

-9%

Chemical Products

-R 42

-4%

Vehicles & Transport Equipment

-R 41

-4%

Optical Photographic Products

-R 26

-17%

Precious Metals & Stones

+R 142

+18%

Total

-R 150

86%

Total Movement

-R 174

100%

 

The main month-on-month import movements: R’ million

Section:

BLNS:

Precious Metals & Stones

-R 385

-47%

Live Animals

-R 122

-23%

Prepared Foodstuff

-R 47

-10%

Miscellaneous Manufactured Articles

-R 45

-83%

Textiles

+R 46

+9%

Total

- R 553

85%

Total Movement

- R 652

100%

0a
1 ~ 940

Growth, inequalities and employment in Africa in focus during 3rd STC on Finance, Monetary Affairs, Economic Planning and Integration

The Ministerial segment of the Third Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration opened in Addis Ababa on 26 October 2017. The meeting was preceded by Expert Meetings from 23-25 October, 2017.

Following the postponement of the Joint Annual Meetings of the AU STC on Finance, Monetary Affairs, Economic Panning and Integration and the United Nations Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development that were scheduled to be held in Dakar, Senegal, from 23 to 28 March 2017, this 3rd AU STC was an opportunity for Member States to discuss on topics such as:

This conference was held at a critical time for Africa, which is experiencing a series of economic, social, food, energy, climate and financial insecurities. However, it must be recognized that it currently has an economic potential. From 2005 to 2015 the African continent recorded on average and per year a growth rate of about 5%. But since 2016, this growth momentum has dropped to around 3%, partly due to the fall in the price of commodities, especially oil. The IMF forecasts a growth rate of around 2.49% for 2017.

In his opening remarks, the Commissioner for Economic Affairs of the African Union, H.E. Prof Victor Harison thanked all delegates in attendance and noted that the theme of the STC, “Growth, Inequalities and Employments” falls right in line with the African Union Theme of the Year “Harnessing Demographic Dividends through Investments in Youth” as Africa has a particularly young and dynamic demography, making it a land of opportunities for short and medium-term and above all long-term and profitable investments in agriculture and agribusiness, infrastructure and energy, tourism, habitat among other sectors.

He noted that “At the African Union Commission, we are convinced that taking full advantage of the demographic dividend requires a continental approach built on the foundation of regional integration. In this perspective, the development of regional and continental programs in the fields of education, infrastructure, energy, and others will catalyze our efforts to achieve more inclusive growth, driving the structural transformation of our continent.”

Commissioner Harison reiterated the Commission's willingness to work in close cooperation with its Member States to define and implement the policies necessary for sustainable development in Africa, that is, economically efficient, socially equitable and ecologically sustainable for development.

Meanwhile, a Ministerial panel discussion on the theme of the STC was held, followed by a review of the report and recommendations of the Experts meeting to close out the activities of the STC.

The Report of the outcomes of the STC will be submitted for consideration at the AU Assembly of Heads of State and Government in January 2018.

0a
1 ~ 940

China-Africa: high time for a common integrated African policy on China

The Institute for Global Dialogue, in partnership with the Friedrich Ebert Stiftung and the Wits Africa-China Reporting Project (ACRP) held a one-day symposium at the University of the Witwatersrand on 20th July 2017, on the theme China-Africa: high time for a common integrated African policy on China.

The symposium drew on South Africa’s hosting of the Johannesburg Summit and 6th Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in December 2015.

The event marked the 15th year since the initiation of the FOCAC mechanism in 2000 and nearly a decade since the Beijing Summit of 2006. The 2nd FOCAC Summit adopted two outcome documents, namely the Johannesburg Declaration and the Johannesburg Action Plan (2016-2018), laying out comprehensive plans for China-Africa relations and practical cooperation for the next three years through a range of new ideas and policies.

As current co-chair of the Forum, South Africa is uniquely positioned to guide the consolidation of the African agenda in China-Africa engagements, including the realisation of greater synergy between the outcomes of Johannesburg and Africa’s Agenda 2063.

In line with increasing calls for a unified African policy and strategy, this symposium presented a platform to critically examine the prospects of a Pan-African policy and strategy to guide Africa’s engagement with China, in addition to taking stock of the implementation of the Johannesburg Action Plan.

This proceedings report presents a synthesis of the discussions at the seminar and summarizes key policy recommendations and implications.


Closing Remarks

Africa does not have a China policy; moreover, several African countries do not have their own declared foreign policies, which are available to the public, Mr. Barry van Wyk, Project Coordinator, ACRP, said.

The symposium was able to make progress in developing African positions towards China but not in terms of an overall African policy towards China. It may be noted that one of the biggest challenges to Africa is to act in a strategic manner, as a region and continent. Mr. van Wyk further asked if it is possible for Africa to be expected to speak with one voice and to integrate more closely. Furthermore, if Africa had a common position, would particular actors or individuals lead such an integration of African policy; and whether or not the private sectors of China and African countries could be mobilised.

It may be possible to address these questions by attempting to formulate common African positions on specific issues of common interest, and then to build from there. It is important to start with what African states agree on. What might emerge from this discussion is not necessarily a common African policy but a common African framework that utilises a multi-pronged approach. For this to be achieved, various African networks like this one here today can be integrated and operationalised to feed into a common African framework. This framework may include specific issues of common interest, such as environmental issues and industrialisation, which may highlight that African agency can take a unified position.

The onus is on Africa to get its house in order and to develop concrete plans towards engagement with China. In addition, it is essential to make use of empirical knowledge, which informs the Africa-China relationship and allows stakeholders to make constructive decisions. As part of this effort, Africans should enquire into what such an African policy would look like, and how to best embody African agency by means of a coherent road map, particularly because much of the current discourse, taxonomy and paradigms are based on colonialism. Africa must base its deliberations on a thorough understanding of China and Chinese culture so it can then approach China in a more prepared manner. Africa has various structures in place to engage with China, notably FOCAC.

However, it is becoming vital for Africa to question whether or not it must look beyond FOCAC and OBOR, and if these institutions that can facilitate African agency appropriately. In carrying the agenda forward, it was emphasized that the networks that are formed around the symposium would continue practically via working groups to develop a coherent document and involve more stakeholders, thus aiming to make a decisive impact on developing an African framework towards China by the next FOCAC meeting in 2018.


Download the Proceedings Report: China-Africa: High time for a common integrated African policy on China (PDF)

0a
1 ~ 940