tralac’s Daily News Selection
Brazil submitted an extensive draft proposal for a potential agreement on investment facilitation to the WTO’s General Council last week, in a bid to jumpstart more “structured discussions” on the subject. In its submission, the Brazilian delegation clarifies that the draft proposal is not intended to serve as a negotiating text, but rather is meant to serve as a “concrete illustration” of what an agreement on investment facilitation could look like. The submission, they say, could help serve as a starting point for a “more focused and text-based discussion” on the subject, along with supporting outreach efforts towards bringing more WTO members on board. The Brazilian text is more extensive and detailed compared to earlier proposals submitted by various delegations in 2017. The scope and the main elements, however, remain the same. [Pacific Alliance, associate members advance trade talks, eye new economic opportunities]
Andrew Elek: How can East Asia defend the WTO? (East Asia Forum)
Defending this dispute settlement mechanism should now take precedence over trade liberalisation. In the face of rising populism, expecting any progress on lowering residual border barriers to trade is unrealistic. Fortunately, trade liberalisation no longer needs to be the top priority for the WTO. Past rounds of WTO negotiations have helped to create an environment where only a few sensitive products face significant traditional border barriers and these products account for a rapidly falling share of international commerce. The performance of the WTO should no longer be judged by the progress of complex negotiating rounds held up by political resistance to trade liberalisation of these few products. How can East Asia defend the WTO? It could build on Chinese President Xi Jinping’s speech at Davos in January 2017, which confirmed China’s commitment to openness and to a rules-based multilateral economic order. All other East Asian governments can join China to make it clear that they will continue to act in line with their WTO commitments in their dealings with other members.
Dani Rodrik: What do trade agreements really do? (pdf, Harvard)
As trade agreements have evolved and gone beyond import tariffs and quotas into regulatory rules and harmonization, they have become more difficult to fit into received economic theory. Nevertheless, most economists continue to regard trade agreements such as the Trans Pacific Partnership (TPP) favorably. The default view seems to be that these arrangements get us closer to free trade by reducing transaction costs associated with regulatory differences or explicit protectionism. An alternative perspective is that trade agreements are the result of rent-seeking, self-interested behavior on the part of politically well-connected firms – international banks, pharmaceutical companies, multinational firms. They may result in freer, mutually beneficial trade, through exchange of market access. But they are as likely to produce purely redistributive outcomes under the guise of “freer trade.”
Rwanda: Bill seeking to ease cross-border movement tabled in parliament (New Times)
A newly proposed law on immigration and emigration in Rwanda would make it easier for people in border communities to cross borders without difficulty, Members of Parliament in the Lower House heard yesterday. Under Article 57 of the draft law, the government has proposed that the Directorate General of Immigration and Emigration be allowed to work in consultation with local leaders and other relevant authorities to establish more crossing points to strictly facilitate movements of border communities. The draft law directs the directorate to put in place instructions governing the management of the crossing points. “It’s important that we make it easy for Rwandans to travel to neighbouring countries, especially those who live near the borders. Some of them would travel long distances to reach a gazetted border post,” Uwizeye told MPs.
The EAC Monetary Institute Bill 2017 and the EAC Statistics Bureau Bill 2017 tabled by the Chair of the Council of Ministers, Hon Julius Wandera Maganda, sailed through the First Reading and were committed to the respective EALA Committees. The object of the EAC Monetary Institute Bill, 2017, is to provide for the establishment of the East African Monetary Institute as an institution of the Community responsible for preparatory work for the EAC Monetary Union. Closely related to the EAMI Bill is the EAC Statistics Bureau Bill, 2017, which also seeks to establish the Statistics Bureau as an Institution of the Community.
The East African Legislative Assembly will operationalize the financial and administrative autonomy granted to it by the council of ministers two years ago. In the wake of this, the Assembly at plenary yesterday passed a resolution directing the EALA Commission to come up with all the necessary instruments to fully achieve the objectives for which it was established including enhancing terms and conditions of service of both members and staff of the Assembly as well as appropriate staffing.
The SADC Transfrontier Conservation Area Network Steering Committee tasked the tourism committee to provide technical support in developing a guideline on cross-border tourism. As part of the process of consulting stakeholders, a workshop was held, 30-31 January (pdf), with the TBCSA, RETOSA and representatives from the different member countries, SA Tourism, the National Department of Tourism and a number of tour operators in attendance. The workshop touched on various aspects of developing cross-border tourism products including issues of sustainability, governance and destination marketing. A survey is due to be sent out to tour operators for more in-depth information on some of these areas before the guideline can be drafted. More consultation and updates are planned in the course of the year, with the guidelines due for finalization by the end of 2018.
Food and Nutrition Security Working Group Southern Africa: special alert (ReliefWeb)
Large swathes of the SADC region have experienced below-average rainfall since October 2017 compared to the 2016/17 season (Figure 1). In late December, dry conditions intensified in the southern half of the region, causing moderate to severe crop moisture stress in Botswana, southern Malawi, southern and central Mozambique, South Africa, southern Zambia and Zimbabwe. Many farmers planted late, and in some areas of Botswana, southern Mozambique and Zimbabwe did not plant at all. Dry conditions which prevailed resulted in poor germination of the late crop. South Africa, the largest producer of white maize in the region, has reported a 22 percent decline in area planted this season . Continuation of these conditions would have far reaching consequences on access to adequate food and nutrition during the 2018/19 consumption year and ability of farmers to produce in the 2018/19 cropping season. In addition, it will limit income generating opportunities resulting in far reaching consequences. [UN seeks $1.06bn to help fragile countries create ‘firewall against famine’; African Development Bank hostssecond Africa Resilience Forum in Abidjan]
The EU has insisted that Nigeria must implement appropriate risk management measures and provide required guarantees before it could export dried beans to Europe. According to the EU, Nigeria must meet specified conditions before the ban will be lifted, but stated that it was supporting the country in the process that would ensure that the lifting of the ban. The EU had banned the exportation of dried beans from Nigeria in June 2015 on the ground that the produce contains high level of pesticide considered dangerous to human health.
Nigeria: Palletisation to cost importers N21.6bn yearly (ThisDay)
Maritime sector stakeholders have expressed concerns over the federal government’s policy on cargo palletisation, noting that it will cost Nigerian importers about $60million (N21.6 billion) annually. The stakeholders were also unanimous in their resolution that the controversial policy will increase the diversion of Nigerian-bound cargoes to the ports of neighbouring countries where the policy is not implemented. The stakeholders made this known at a meeting organised by maritime media consulting firm, Ships & Ports in Lagos to brainstorm on the matter. The federal government had late last year directed all containerised cargoes coming into Nigeria to be on a pallet.
South Africa: Channing Arndt on new data, new approaches and new evidence - a policy synthesis (SAJE)
South Africa faces the imperative of escaping economic stagnation. This article seeks to synthesise results from a series of research efforts, including but not limited to the articles presented in this special issue, and consider policy options for escaping economic stagnation. The focus is on South Africa and South African policies yielding relatively quick dividends in terms of growth and taking the rest of the world as given. Four broad implications are presented. These could form part of a concerted effort to escape from South Africa’s long running economic malaise. Extract: The third principal result relates to trade. The relationships are illustrated in Fig. 3. The figure compares manufacturing firms that engage in international trade relative to manufacturing firms that do not. The mainline result is that firms that engage in international trade employ more people, pay higher wages, have more capital and exhibit higher levels of productivity. While these observations hold for firms that are exporters or importers only, the results are particularly striking for firms that both engage in exports and directly purchase imported intermediates. Similar results hold for export destinations and products: firms that export to developed countries and/or to multiple destinations and/or multiple products tend to exhibit higher levels of productivity (Matthee et al., 2016).
A deep dive into the effects of trade: MIT economist David Atkin looks beneath the surface of global commerce
Take a moment to consider what the following facts have in common. In India, migrants from within the country continue to consume the favored foods of their home regions — even though the relatively high prices mean they eat less. In Mexico, more 9th graders drop out of school when a local manufacturing plant opens to export goods. And in Egypt, rug weavers earn 20 percent more in profits when orders come from foreign buyers. Three countries, three quite different issues. What are the links?
Côte d’Ivoire: Sixth Economic Update
Additionally, the report focuses on how the country can make up its technological lag. “Economic theory has long demonstrated the key role played by technological innovation in a country’s development process,” said Jacques Morisset, Lead Economist, World Bank. “To be successful, Côte d’Ivoire must not only open up to the exterior but also enhance the skills of its labor force and the connectivity of its economy. These two factors play an essential role in the dissemination of new imported technologies and their adaptation to the local economic fabric.” A focus of Côte d’Ivoire’s National Development Plan is to increase FDI and exports. Although some specific initiatives have been launched, particularly in the agri-food processing sector, this strategy has not yet taken off. The weight of FDI and exports in GDP has not increased in recent years. According to the World Bank only 3% of Ivoirien companies use imported technology licenses as against 15% in the rest of Africa. Moreover, Ivoirien companies spend less on research and innovation than their African counterparts. [How can Côte d’Ivoire help its businesses and citizens acquire new technologies?]
The strategic orientation and the overarching framework for the plan draws upon several elements, the key ones being the Manifesto of the Coalition of the political parties that defeated the previous regime and the Government Compact agreed during a retreat of the Cabinet 5-7 May 2017. Through its eight strategic priorities and their critical enablers, my government aspires not only to lay the foundations for a modern democratic state, but also to address the most pressing economic and social ills besetting our society. The plan through its robust accountability framework, responds to my concern to ensure a strong focus on results, strong monitoring and evaluation processes, as well as strengthened engagement between my government and the country’s citizens, including those in the Diaspora. [The Gambia to strengthen role of youth and trade in economic development]
Today’s Quick Links:
ECOWAS imposes individual sanctions for non-implementation of the Conakry agreement in Guinea Bissau