Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

Arvind Subramanian: The WTO reborn? (Project Syndicate)

For too long, the World Trade Organization has languished, to lift a reference from T.S. Eliot, by the “waters of Leman” (Lake Geneva). Once the world’s preeminent multilateral trade forum, the WTO has been steadily marginalized in recent years, and recent rebukes of globalization, such as the United Kingdom’s Brexit vote and the election of Donald Trump as US president, suggest that this trend will accelerate. But these outcomes may actually have the opposite effect, owing to three key developments that could enable the revival of the WTO – and of the multilateralism that it embodies. [The author is Chief Economic Adviser to the Government of India]

Trade Developments in 2016: policy uncertainty weighs on world trade (World Bank)

In this edition of Trade Watch, we address three questions concerning recent trade developments: What is happening? Why? Does it matter? Global Trade Watch: Trade Developments in 2016 (pdf) uses manufacturing data by country and year to show a link between labor productivity and GVCs. An analysis that covers 13 sectors in 40 countries over 15 years finds that participation in GVCs is a significant driver of labor productivity. A 10% increase in GVC participation increased productivity by close to 1.7%. World trade grew at about 3% per year from 2012-2016, lower than the pre-crisis average of 7% per year for 1994-2008. Productivity growth also declined to 1% per year post-crisis from an average of 2% during 1994-2008. If the development of GVCs is considered over approximately the same period, data point to a stalled growth in vertical specialization since 2011 while world GVC participation was increasing throughout the 2000s. [Companion analysis: Does vertical specialization increase productivity? (pdf)]

Trade in services and economic transformation: a new development policy priority (ODI)

This set of essays (pdf) analyses the role of services, and especially trade in services, in economic transformation. The essays are divided into three parts. The first set of contributions is about understanding the role of services in economic transformation and what the donor community could do over the next few years to support increases in economy-wide productivity and employment by focusing more on services policies and the performance of services sectors. The second part discusses the need to improve data on trade in services and where the focus should be. The third and final part examines ways to support developing countries through trade agreements and preferential access to markets, and help poorer countries benefit from greater trade opportunities. What should be the priorities for promoting services trade and providing services preferences for developing countries? [The editors: Bernard Hoekman, Dirk Willem te Velde]

Illicit financial outflows: proposal for the establishment of the Africa Integrity Fund (AfDB)

In response to the challenges facing Regional Member Countries in the fight against prohibited practices and illicit financial outflows and in line with the institution’s priorities, the Integrity and Anti-Corruption Department proposes the establishment of the Africa Integrity Fund to extend grants to eligible recipients in order to finance measures which contribute to the prevention, the detection, the investigation and the sanctioning of prohibited practices, which support the repatriation of stolen assets, which alleviate the financial drain from illicit outflows on the Bank’s RMCs and which strengthen transparency and accountability in the management of public resources. [Botswana: ‘More work needed to combat money laundering’]

SACU members need to harmonise border control policies (Swazi Observer)

Ministry of Commerce Industry and Trade International Trade Department Senior Trade Policy Analyst Mluleki Dlamini said currently, SACU does not have common policies and furthermore the regional bloc does not have common institutions. Dlamini was speaking yesterday during a workshop organised by the Global Economic Governance Africa in conjunction with the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC) held at the Royal Villas in Ezulwini. “The supra regional organisations would aid trade development in the region which is critical for the growth of the private sector. Common policies would decrease duplication of processes which can be seen to be barriers to trade,” he said. Dlamini said another fact worth noting was that SACU trade only applies to goods and not services.

SACU revenue pool improves: Elago (LeLa)

Executive Secretary, Paulina Elago, further noted that the SACU Council of Ministers are busy reviewing the revenue formula which is intense and involve many scenarios. Elago said the review of the formula will further be discussed during the Council of Ministers’ meeting scheduled to take place at the end of March in Namibia. “The council of ministers will review certain principles of revenue sharing formula and one of them is that no country will be worse off,” she said. Elago added that the meeting will agree on the guideline to regional integration, industrialisation and tariff setting mechanisms that will be applicable to all member states.

Development of a SADC Simplified Trade Regime: consultancy opportunity

It is against this background that SADC Ministers mandated the SADC Secretariat to develop a Simplified Trade Regime for intra-SADC trade in accordance with the WTO Agreement and the Kyoto Convention. The draft proposal, informed by a thorough best-practice and cost/benefit analysis, will then be considered by SADC Structures for final approval by SADC Ministers. GIZ is seeking a firm of consultants to develop a WTO compatible proposal for a SADC STR with different scenarios/options to be considered by SADC Member States, following a thorough assessment of options and best practices, and of stakeholders’ needs and preferences in the SADC region.

Zimbabwe: ‘2017 trade deficit to fall 35%’ (The Chronicle)

The Government is anticipating a 35% decline in the country’s trade deficit to $1,537bn by the end of this year. The 2016 trade deficit figure reached $2,833bn, which was higher than previously estimated despite a number of interventionist measures implemented during the course of last year. The Ministry of Macroeconomic Planning and Investment Promotion says the improved rains this season, industry supportive measures and an anticipated growth in beneficiation will boost export receipts this year. [Retailers revert to old prices]

Rwanda: Govt starts process to raise AU funding quota (New Times)

Members of Parliament have approved the relevance of the Bill establishing the levy on imported goods for the financing of African Union operations. The Bill, if enacted into law, will help the Government collect around Rwf1.5bn annual dues to sponsor AU affairs as the continent seeks to get rid of donor dependence. At least $1.2bn (about Rwf898bn) is expected to be raised by all African states to cater for the ongoing reforms that seek to address a budget deficit of more than 76% so far funded by donors.

IGAD: Regional Infrastructure Master Plan appraisal report (pdf, AfDB)

Presently, IGAD has no regional infrastructure Master Plan, nor a programme of prioritised regional infrastructure development projects built on a regional consensus of the 8 member countries. Analysis and studies by the Bank especially through initiatives such as the Programme for Infrastructure Development in Africa (PIDA) have revealed lack of adequate and regionally integrated infrastructure as one of the binding constraints to unlocking Africa’s vast productive capacities and therefore, Africa’s sustainable development. Although the region is making major strides in the development of new regional infrastructure projects under programmes such as the continental infrastructure Master Plan PIDA; with projects such as the Ethiopia-Djibouti railway, Ethiopia-Kenya Power Interconnector and others, underdeveloped infrastructure still remains a major constraint the IGAD region, and it has no regional master plan of priority projects built on the consensus of its member countries. The project will therefore address the problem of inadequate and poor regional infrastructure networks, connectivity and efficiency.

Orange-Senqu River Basin gets R48.6m for water security (Infrastructure news)

The African Water Facility and the NEPAD Infrastructure Project Preparation Facility have signed an agreement with the Orange Senqu River Basin Commission to launch the Climate Resilient Water Resources Investment Strategy and Multipurpose Project Preparation. ORASECOM said that with the funding of the new agreement, it will develop an optimised water resources investment plan and select a priority transboundary project which will be prepared at feasibility level.

WCO participates in Global Illicit Trade Summit

On 21 February, WCO Secretary General Kunio Mikuriya participated in the Global Illicit Trade Summit, an event organized in Brussels, Belgium, by The Economist, which brought together more than 100 policymakers, regulators, government officials, lawyers, academics, researchers and brand owners. The WCO Secretary General opened the first panel session, which touched on reducing the appeal of illicit trade, by explaining the different types of illicit trade as well as emerging and evolving threats, such as those linked to the development of e-commerce and the challenges it poses in terms of controlling a growing amount of small packages and parcels, or those linked to free trade zones (FTZs) when they are located outside Customs controls. He also highlighted the work of the OECD on measuring the impact of counterfeiting on the economy, and the cooperation between the WCO and the OECD in this area.

Agriculture and food global value chains in Sub-Saharan Africa: does bilateral trade policy impact on backward and forward participation? (pdf, Repec)

Our results show that, despite their low world trade shares, GVC participation in SSA economies is increasing over time, mainly upstream as suppliers of unprocessed inputs. Furthermore, we show that the value added demand for SSA agricultural products primarily originates from the EU and emerging countries rather than from regional partners. Finally, by making use of a “gravity-like” identification strategy, we also find evidence that bilateral trade protection significantly affects GVC backward and forward participation in agriculture and food. These results call for a refinement of trade policy priorities in SSA.

The future of food and agriculture: trends and challenges (FAO)

The core challenge is to produce more with less, while preserving and enhancing the livelihoods of small-scale and family farmers, and ensuring access to food by the most vulnerable. For this, a twin-track approach is needed which combines investment in social protection, to immediately tackle undernourishment, and pro-poor investments in productive activities – especially agriculture and in rural economies – to sustainably increase income-earning opportunities of the poor. The world will need to shift to more sustainable food systems which make more efficient use of land, water and other inputs and sharply reduce their use of fossil fuels, leading to a drastic cut of agricultural green-house gas emissions, greater conservation of biodiversity, and a reduction of waste. This will necessitate more investment in agriculture and agrifood systems, as well as greater spending on research and development, the report says, to promote innovation, support sustainable production increases, and find better ways to cope with issues like water scarcity and climate change.

Today’s Quick Links:

Nigeria, South Korea trade volume fall on investors’ confidence

Kenya, Egypt agree to eliminate double taxation on imports

Lobby seeks laws to regulate EA clearing and forwarding industry (Business Daily)

Chatham House interview with Rob Davies, South African Trade Minister

Mozambique to start issuing dual-entry tourist visas on arrival

The evolving EU-Nigeria social, economic alliance

Japan donates CHF 200,000 to help developing countries enhance trade negotiation skills

Japan steps up support for ITC

The end of the TransAtlantic trade consensus?

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