Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Asian Development Bank

China’s double-digit trade jump pairs global and domestic demand (Bloomberg)

China’s trade engine remained in high gear with a surprise export surge accompanied by further acceleration in imports that signals robust demand in the domestic economy. Exports rose 12.3% in November in dollar terms, the customs administration said Friday, exceeding all economist estimates in a Bloomberg survey where the median estimate was for a 5.3% rise. Imports also beat projections with a 17.7% increase, widening the trade surplus to $40.2bn.

11th WTO Ministerial Conference – Buenos Aires: a tralac Resource Box

WCO Policy Commission: Luxor Resolution on cross-border e-commerce, MC11 (WCO)

The Resolution (pdf), developed in close collaboration with all stakeholders, outlines the guiding principles for cross-border e-commerce addressing eight critical aspects, notably Advance Electronic Data and risk management; Facilitation and simplification; Safety and security; Revenue collection; Measurement and analysis; Partnerships; Public awareness, outreach and capacity building; and Legislative frameworks. The Resolution is aimed at helping customs and other government agencies, businesses, and other stakeholders in the cross-border e-commerce supply chain to understand, coordinate and better respond to the current and emerging challenges. Additionally, and taking into consideration the relevance of the topic and the need to better position the work of the WCO and coordinate ongoing efforts, the PC has also issued a communiqué to the Eleventh WTO Ministerial Conference (pdf).

Global Future Council on International Trade and Investment: two strategic briefs prepared for trade ministers ahead of MC11

(i) On the WTO Dispute Settlement Mechanism (pdf): While the WTO dispute settlement system has, on balance, been a great success, Members have reasonable cause to be dissatisfied with some aspects of its functioning. Disputes typically take longer than originally foreseen. Instead of six months between the establishment of a panel and the issuance of a report, the mean duration is over 15 months. Compliance panels take nearly three times longer than the three-month period initially stipulated. These delays should be looked at in context. Roughly two thirds of the disputes brought to the WTO are resolved at consultation stage, although this trend has fallen over the years. Increasingly complex cases, coupled with Members’ desire to ground their claims as thoroughly as possible while aligning themselves with past Appellate Body rulings, has resulted in a vastly increased volume of evidence and expert input for panellists to consider. Placing limits on the length of submitted materials, as some Members’ national court systems do, together with expanding the capacity of the WTO secretariat to support dispute panels, could help the WTO better meet Members’ demand for its adjudication processes. Speed aside, the WTO’s approach to ensuring compliance with its rules has become unbalanced. It was designed to rest on three pillars.

(ii) Creating an inclusive trade agenda. The Council has previously outlined the best and worst case scenarios for the future of trade, cautioning against the risks of abandoning current structures. Stronger rule-based trade integration is key to staying up-to-date with global growth drivers. It also complements a sound domestic policy environment focused on creating a virtuous circle between growth as the top-line measure of national economic performance, and broad-based progress in medium standards as the bottom line. Increased trade integration through regional agreements can make an important contribution. Research shows that comprehensive agreements lead to more trade creation and less trade diversion than their more limited counterparts; moreover, some provisions in these agreements have a global public good aspect and also increase trade with non-members. The result may be partly due to the shifting nature of international economic cooperation. With average tariffs lowered over the years, some countries have concentrated on behind-the-border rules and regulations, as well as explicitly aligning trade policy to support other public objectives such as climate change, ocean health, gender or small businesses. So-called “soft commitments”, involving best endeavour language, as well as provisions, cooperation mechanisms etc. can signpost the way for countries interested in shaping a supportive enabling environment, which uses the full potential of trade. Regional trade agreements can, however, only complement the multilateral trading system. The two need to move in tandem. [Lead author: Anabel González, Trade and Competitiveness Global Practice, World Bank], [Note: The Global Future Council on International Trade and Investment is co-chaired by Arancha Gonzalez Laya and Peter Draper]

Block chain: opportunities for private enterprises in emerging markets (World Bank)

The six chapters that follow provide an overview of the technology (chapter one) and its unfolding applications in emerging markets (chapter two). Chapter three examines whether block chain can be used to mitigate de-risking by financial institutions. Chapters four and five look more closely at the financial services sector, including an overview of how block chain affects plays into the wider spectrum of financial technology (fintech) innovations and the resulting provision of financial services (chapter four), and an analysis of block chain’s contribution to reaching the unbanked and under-banked in various emerging markets, including in Latin America, Asia and countries in Sub-Saharan Africa (chapter five). Finally, Chapter six looks ‘beyond fintech’ and explores how developments in applied block chain technology can impact agribusiness, drug safety and more generally provide enforcement tools to promote the reach of sustainable and inclusive business. These chapters are merely the beginning of an exploration.

ASEAN 4.0: What does the Fourth Industrial Revolution mean for regional economic integration? (WEF)

The paper discusses at length the impact of the Fourth Industrial Revolution on ASEAN. It will bring huge benefits, such as empowering SMEs and creating new ways to connect citizens to healthcare. Equally, it will bring tremendous challenges, such as deep disruption to jobs as AI and advanced robotics undermine both manufacturing and services jobs. The paper also explains why ASEAN must adopt a regional approach to navigating the Fourth Industrial Revolution. Yes, national-level policies are critical, and ASEAN nations are pursuing these diligently, such as Thailand 4.0 and Singapore’s Smart Nation initiative. But the technologies of the Fourth Industrial Revolution do not recognize national borders. If ASEAN leaders do not think regionally, they will miss out on opportunities and fail to address growing challenges. The Fourth Industrial Revolution also calls for a new way of formulating policy and regulation. The speed of change under the revolution is accelerating, and the old ways of crafting policy, especially cross-border policy, are too slow, too backward-looking and too rigid. Instead, governance and regulation need to become more agile, faster, more iterative and experimental. Seven suggestions for ASEAN leaders:

EAC becomes first REC to adopt an Energy Security Policy Framework in Africa (EAC)

The EAC has adopted its Energy Security Policy Framework, seeking to ensure the security of the region’s biomass, electricity, and oil and gas supplies. The Sectorial Council on Energy of the EAC adopted this framework early this month in Arusha, after being signed by the six-member states (Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda). Recognizing energy as pivotal to their transformational agenda, the ECA partner States have set ambitious development plans prioritizing the energy sector.

Rwanda: Freight forwarders push for self-regulatory mechanism (New Times)

A new legal framework on self-regulation and management of customs agents and freight forwarders in Rwanda is being developed as a tool to bring about sanity and professionalism in the freight logistics. The draft bill, which was initiated by Rwanda Freight Forwarders Association, is expected to be presented to Parliament next year. There is hope that, once the bill is approved, the cost of doing business will reduce at 14.3% through reducing clearing time, according to clearing agents.

What Migingo, the world’s tiniest disputed island, tells us about international law (The Conversation)

The debate about Migingo’s fate has been fuelled by the perceived imbalance in the Nile perch trade – Kenya owns 6% of Lake Victoria but dominates the perch trade while Uganda owns 43% but harvests less than half of Kenya’s catch. An added complication was the 2006 discovery of commercially viable oil deposits across the East African Rift System. An oil find could potentially straddle the disputed demarcation line. The dispute has become intractable, despite bilateral and multilateral discussions. A series of aggressive encounters between Ugandan marines and Kenyan police have brought the parties to the brink of violence while eight years ago Kenyan rioters uprooted landlocked Uganda’s rail link to the Kenyan port of Mombasa. This disruption in turn affected the commercial interests of, among others, Rwanda, Burundi and eastern Democratic Republic of Congo. Characterisations of the dispute as small do no justice to the importance of the international legal issues at play. Migingo intertwines issues of ethnicity, nationality, and politics around the competing temptations of a resource. But it also serves as an example of the lingering effects of uti possidetis:

India seals cooperation with Nigeria to enhance agricultural trade (The Guardian)

The Association of Chambers of Commerce India (ASSOCHAM), and the Nigeria Association Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), have signed a MoU to boost agriculture and agro-allied trade between the two countries. The agreement would also help boost Nigeria-Indian cooperation to meet exportable targets of agricultural commodities including pulses, cashew nuts, sesame seeds, and shear butter and a host of others.

Brexit sector viewpoint: Africa outlook, from Herbert Smith Freehills LLP (Lexology)

The longer-term risk, as implied by Foreign Secretary Boris Johnson, is that the UK turns its attention from Africa to South East Asia and the India Sub-Continent with consequent reduction of economic support. In determining their post-Brexit framework, general counsel and the boards of companies trading into and out of Africa should ask:

Brexit breakthrough struck as path cleared for tough trade talks (Bloomberg)

The UK and the European Union struck a deal to unlock divorce negotiations, opening the way for talks on what businesses are keenest to nail down – the nature of the post-Brexit future. The pound rose. “Both sides had to listen to each other, adjust their position and show a willingness to compromise,” European Commission President Jean-Claude Juncker said in Brussels after the agreement was sealed before dawn on Friday. [Joint report from the negotiators of the EU and the UK government, pdf)

Conflicts, drought drive hunger despite strong global food supply (UN)

Despite strong global food supply, localized drought, flooding and protracted conflicts have intensified and perpetuated food insecurity, the FAO reported Thursday. The new edition of the FAO’s Crop Prospects and Food Situation report revealed that some 37 countries – 29 of which are in Africa – require external food assistance.

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