tralac’s Daily News Selection
The selection: Wednesday, 27 July 2016
Featured infographic, @GATFnews: Mexico becomes the 87th country to ratify the @wto TradeFacilitation Agreement. Only 22 more to go.
Using what is widely regarded as the best available data on global trade dynamics, namely, the World Trade Monitor prepared by the Netherlands Bureau of Economic Policy Analysis, the 19th Report of the Global Trade Alert, evaluates global trade dynamics. Our first finding is that the rosy impression painted by some, should be set aside. We demonstrate that: (i) World export volumes reached a plateau at the start of January 2015. The same finding holds if import volume or total volume data are used instead; (ii) Both industrialised countries’ and emerging markets’ trade volumes have plateaued; (iii) Except during global recessions, a plateau lasting 15 months is practically unheard of since the Berlin Wall fell; (iv) In 2015 the best available data on world export volumes diverges markedly from that reported by the WTO, IMF, and World Bank, and probably explains why analysts at these organisations have missed this profound change in global trade dynamics
Ricardo Meléndez-Ortiz: ‘What’s ahead for the WTO: looking around the corner and beyond’ (VoxEU)
In an exceptional manner, the Nairobi outcome offers a license to reframe cooperative approaches and rule-making at the WTO. Reframing would involve not only identifying different ways to achieve Doha issues, but also acting on the most pressing aspects of these today. Moving towards the forthcoming ministerial, a step-wise approach could be used whereby members consider the direction of travel as well as specific actions for the present. As WTO members prepare for a General Council meeting at the end of July, the following options may prove useful food for thought for the summer pause and the resumption of talks at the rentrée in September.
Experts from the African Union Commission, supported by the Economic Commission for Africa and UNCTAD, met on the sidelines of UNCTAD14 to work on the draft text of the Continental Free Trade Area Agreement. The experts met in a four-day workshop, organized by the African Trade Policy Centre, following the decision of the AU summit in Kigali to negotiate the CFTA based on a template to provide room for wider consultation of stakeholders in national forums. Among other technical materials, the workshop contributed to the creation of a skeleton text covering the areas of substantive content still being negotiated. The work of the experts in Nairobi covered the modalities for negotiations for goods and services trade, the framework agreement and annexes on trade in goods, trade in services, institutional arrangements and dispute settlement. The next meeting of the experts, which is expected to finalize the agreement template, will take place mid-September 2016.
East Africa: Towards a Shipping Information Pipeline (Maersk)
Jensen began researching the paperwork and processes gumming up cross-border trade more than two years ago as part of project between Maersk and TradeMark East Africa, a not-for-profit organisation focused on enhancing prosperity in the region through trade. Jensen’s research focused on two of Kenya’s most important exports, avocados and flowers. What he found shocked him: To reach customers in Europe, the containers of avocadoes and flowers had to go through a jungle of nearly 30 people and organisations, consisting of private companies and public authorities on both continents, and more than 200 different interactions and communications between them all. “Various studies have estimated that, in general, the average border related administrative costs of trade are 21% of the total cost, compared to 8% for transportation. What we’re aiming for is to remove as much of that 21% as possible with the Shipping Information Pipeline, in order to slash the cost of international trade in the region,” says Jensen.
Delays in clearing goods, corruption and theft at the Port of Dar-es-Salaam in Tanzania, and high fees charged by some regulatory agencies continue to hurt trade along the Central Corridor, officials have said. Members of the East African Business Council brought the matter up during a Public-Private Dialogue in Dar-es-Salaam last week. Omar Kassim, chairperson of Uganda Clearing Industry and Forwarding Association, said clearing of goods in Tanzania takes 10 days on average, while in Rwanda the same task takes a maximum of three days. “Long clearing time in Tanzania is attributed to complicated documentation and compliance activities as businesspersons require 10 documents to import or export to Tanzania,” Kassim said. [EAC women business leaders call for more support (New Times)]
WCO study report on customs brokers (pdf, WCO)
This Report is primarily based on WCO survey results at an aggregate level and research carried out by the Secretariat, which, among others things, includes a detailed analysis of Members’ practices. The Report starts with providing an introductory general background and overview of Customs brokers’ role in the supply chain and moves on to explaining related international standards, instruments, and tools. It also examines several potential cooperation opportunities between Customs and Customs brokers as well as collaborative work on skill up-gradation and capacity building of brokers, on a sustained basis, noting their role in improving trade facilitation and compliance. [Related WCO resources: TFA Implementation Guidance Note, National Committees on Trade Facilitation]
At the end of 2015, 46% of the population in Africa subscribed to mobile services, equivalent to more than half a billion people. The region’s three dominant markets – Egypt, Nigeria and South Africa – together accounted for around a third of the region’s total subscriber base. Subscriber growth rates are now beginning to slow and will increasingly converge with the global average, as affordability challenges become a key barrier. Over the next five years, an additional 168 million people will be connected by mobile services across Africa, reaching 725 million unique subscribers by 2020.
The theme of this edition is on “Growth-poverty and inequality nexus: overcoming barriers to sustainable development”. Despite earlier periods of limited growth, African economies have grown substantially over the past decade. However, poverty and inequality reduction has remained less responsive to growth successes across the continent. How does growth affect poverty and inequality? How can Africa overcome contemporary and future sustainable development challenges? This 2015 edition of the African Development Report offers analysis, synthesis and recommendations that are relevant to these questions.
State of East Africa Report 2016: the political economy of inequalities (SID)
Building on previous reports, this State of East Africa Report examines the political economy of inequalities and highlights the relationship between politics and inequality. The report offers some hypotheses as to why inequalities persist and why efforts to address them are unlikely to be successful in the absence of a committed attempt to dismantle and recreate the institutions that distribute power and the networks that have emerged to extract benefits from them. The report analyzes nine sectors divided across economic, social and political pillars, and for each of these sectors it asks questions about the EAC Member States’ performance in the fiscal, normative and ethical domains.
DFID's programme in Nigeria: a review (International Development Committee)
The International Development Committee's report: DFID's programme in Nigeria, published today, highlights regional inequalities and the depth of poverty and instability in the north of the country, despite the re-establishment of democratic civilian rule in 1999 and sustained economic growth over the past 20 years. The Government's funding to Nigeria has increased over the last 15 years, rising to £266 million for 2016–17, making the country DFID’s second largest programme in Africa and third largest in the world. The Committee welcomed DFID's increasing prioritisation of Nigeria and endorsed the Department's strategy of working to strengthen the capabilities of the Nigerian authorities to tackle corruption and foster more effective and accountable governance. [Central Bank Nigeria: Monetary Policy communique]
The World Bank Group has suspended disbursements of funding to the Inga-3 Basse Chute and Mid-Size Hydropower Development Technical Assistance Project in the DRC. This follows the Government of DRC’s decision to take the project in a different strategic direction to that agreed between the World Bank and the Government in 2014. The World Bank Group is in a continuing dialogue with the Government about the implementation arrangements of the project, with the goal of ensuring that it follows international good practice. [Congo pushes for a mega-dam project, with no environmental impact studies (PRI)]
In his launch remarks, the SADC Chairperson noted that while the region was largely able to cope with the drought in 2014/15 through its own means, the severity of the drought of 2015/16 has overwhelmed the disaster preparedness capacity in most of the affected Member States. Responding to the Appeal, the USA pledged $300m, while the United Kingdom and the European Union pledged £72m, and €60m respectively, towards humanitarian assistance [Download].
Zimbabwe: Labour export policy nears completion (The Herald)
Government is finalising the country’s labour export policy, with the first export of graduates expected to begin as soon as Cabinet endorses the policy, an official has said. This comes amid revelations that 16 000 graduates looking for employment opportunities in several African countries have been captured from different tertiary institutions. “Our consultation process has been moving perfectly and we are pleased that policy matters will soon be completed. That will open avenues for the country to begin the exportation of thousands of people who in need of employment,” he said.
Tanzania’s EU stand that could cost Kenya heavily (Daily Nation)
Foreign Affairs Cabinet Secretary Amina Mohammed said Kenya will focus on having the EPA signed and will not rush to negotiate for the GSP although the October deadline is fast approaching while the barriers persist. The scenario now leaves Kenya with a huge headache of dealing with political squabbles of one neighbour while seeking to convince another to sign an agreement. [Kenya plans fresh talks to win EAC support for trade deal with Europe (Business Daily), Ghana: EPAs should not undermine sub-regional integration (Graphic)]
Kenya: US remittances jump offsets declining flows from EU (CBK)
Remittance inflows to Kenya increased by 6.3% in June 2016 compared with 2.3% growth registered in May 2016. The increase in June 2016 is reflected in inflows from North America and the rest of the world. Cumulative inflows in the 12 months to June 2016 increased by 11%, to $1,656m, from $1,492m in the year to June 2015.
Namibia: Cement wars reboot (Insight)
With cement consumption in Namibia currently standing at roughly 600,000 tonnes per annum, plans for a second cement factory with a 1.5 million tonne annual production capacity raises competition concerns. According to data of the United States Geological Survey, China accounts for about 60% of global cement volumes. According to industry estimates for SACU, cement demand stood at approximately 15 million tonnes across all five member states. The capacity of all operating cement factories in SACU countries is currently just over 15 million tonnes and will increase to just over 20 million tonnes by 2025. This year will show surplus capacity of seven million tonnes of cement within SACU, according to data accessed by Insight.
Becoming a member of TIR, an international guarantee scheme that will enable Chinese freight containers to travel all the way to Ireland without being opened up for time-consuming customs checks, is a first step towards putting the legal framework of the plan into action. "It's a key element for the Chinese government. If you had to stop a container at every border from China to Europe it would add substantial costs," said Christian Friis Bach, executive secretary of the U.N. Economic Commission for Europe, which oversees the TIR convention. The impact of China joining TIR could end up being significant, especially if partners in Asia and Africa also join, and if China uses it for shipping and rail routes as well. [China ratifies UN TIR Convention with new trade prospects in view (IRU)]