tralac’s Daily News Selection
South Africa’s August 2018 merchandise trade statistics show a R8.79 billion surplus from an upwardly revised R5.29 billion deficit in July and above market expectations. “We expect the deficit to have narrowed to R3.5bn, from R4.7bn in July. Bloomberg consensus expectations foresee a trade deficit of R1.8bn,” Standard Bank had said.
Trade will continue to expand but at a more moderate pace than previously forecast. The WTO anticipates growth in merchandise trade volume of 3.9% in 2018, with trade expansion slowing further to 3.7% in 2019. The new forecast for 2018 is below the WTO’s 12 April estimate of 4.4% but falls within the 3.1% to 5.5% growth range indicated at that time. Trade growth in 2018 is now most likely to fall within a range from 3.4% to 4.4%. The updated trade forecast is based on expectations of world real GDP growth at market exchange rates of 3.1% in 2018 and 2.9% in 2019. This implies a ratio of trade growth to GDP growth of 1.3 in both years.
All geographical regions recorded positive year-on-year trade growth in both exports and imports in the first half of 2018, but some regions performed better than others. North America saw the fastest export growth during this period at 4.8%, followed by Asia at 4.2% and Europe at 2.8%. Exports of Other regions (comprising Africa, the Middle East and the Commonwealth of Independent States including associate and former member States) increased by 2.7% while those of South America were up 1.1%. Asia had the fastest import growth (6.1%) followed by South America (5.5%), North America (4.8%), Europe (2.9%) and Other regions (0.5%).
WTO agriculture talks: Members evaluate negotiating submissions, eyeing 2020 Ministerial (ICTSD)
The WTO’s agriculture negotiations resumed last week after the organisation’s annual August hiatus. While the discussions were mainly limited to reviewing negotiating submissions, analysis, and data, some sources indicated that the level of engagement seemed noticeably improved from recent meetings, with more planned to help refine the direction of the talks further. Ambassador John “Deep” Ford of Guyana, the chair of the WTO’s Committee on Agriculture “special session” tasked with negotiating new farm trade rules, convened delegates for informal meetings on 21 September, at which Australia and Canada both made presentations based on recent negotiating submissions.
Canada presented analysis on domestic support by the Cairns Group of agricultural exporters, drawing on figures presented in a submission that the group tabled in July. The paper reviews domestic support from 2001 to 2014 for select WTO members that are significant exporters, importers, or producers, drawing on data that the countries themselves have reported to the global trade club. Members also discussed a separate paper from Australia, which also looked at domestic support trends. In addition, the chair reported on his consultations on cotton, where the US has also tabled an informal paper. Sources said this could be followed by submissions from other members soon.
Pew Research Center: Americans, like many in other advanced economies, not convinced of trade’s benefits
Americans and publics in advanced economies are especially skeptical of trade’s role in boosting wages – only about three-in-ten in the United States and across the other advanced economies surveyed subscribe to this view. Slightly more Americans think trade lowers prices and generates new jobs (37% and 36%, respectively). Among the other advanced economies polled, a median of 47% link trade to job creation, while 28% say prices decrease thanks to trade. People in emerging markets are even more dubious of trade’s impact on prices – a median of just 18% in these countries say it drives prices lower. But publics across the nine emerging markets surveyed are enthusiastic about trade’s other economic benefits: A median of 56% think trade leads to more jobs and 47% say it improves wages.
These are among the key findings from a Pew Research Center survey conducted among 30,133 respondents in 27 countries from 14 May to 12 August. Among the 27 nations surveyed, attitudes toward trade are closely associated with education and income levels. In 18 countries, those with higher levels of education are more likely than those with less education to think trade creates jobs. In 17 countries, those with an income higher than the national median are more likely than those with an income below that line to believe trade generates employment. [Note: Emerging and developing countries included in the survey are Brazil, India, Indonesia, Kenya, Mexico, Nigeria, Philippines, South Africa, Tunisia]
Updates from the Manufacturers Association of Nigeria AGM: Mainstreaming industrial policies to catalyse industrial renaissance
(i) President Addo Akufo-Addo: Nigeria, Ghana urged to lead industrial revolution in Africa. Speaking through his Senior Minister, Samuel Yaw Osafo-Maafo, who represented him as a guest lecturer at the annual lecture during the 46th AGM of the Manufacturers Association of Nigeria in Lagos: “We need to stop this needless drive for importation and direct our attention to protecting local businesses. We must tailor our procurement laws to favour local production. For every cheap item we buy from outside Nigeria, Ghana or the continent as a whole, we shall bear in mind that we are providing employment to other people outside our borders and denying our people the jobs to make a living and create wealth in dignity. Africa must procure prudently to protect itself and provide labour to its youth.”
The Ghanaian leader explained that Africa could create the champions of entrepreneurs and business giants who could stand shoulder to shoulder with foreign businesses. “We have many examples of our own to celebrate like the Dangotes. What we must never stop to do is to effectively ensure that both the private and public sectors continuously engage in productive dialogues and consultations to define what is good for our industrial sustainability and I believe this meeting will deepen that process.”
(ii) Nigerian, Ghanaian manufacturers sign MoU on trade relations. The Manufacturers Association of Nigeria and the Association of Ghanaian Industry, on Thursday, signed a MoU to facilitate exchanges and joint actions for a conducive atmosphere for the operation of manufacturing business in both countries. Dr Frank Jacobs, outgoing President of MAN, and Dr Yau Agyei Gyamfi, President Association of Ghanaian Industry, signed the MoU at the 46th Annual General Meeting of the manufacturers Association of Nigeria in Lagos. The MoU serves to form the nucleus of a coalition of manufacturers across West Africa.
(iii) Manufacturers’ inventory up 255% in one year. Dr Frank Jacobs, outgoing MAN president noted that the inventory of unsold products, inadequate electricity supply, frequent increase in electricity tariff and abnormally high interest rates were some of the problems bedeviling the sector. “Inventory of unsold finished goods increased to N161.53bn in the second half of 2017 from N35.42bn recorded in the corresponding period of 2016. Inventory of unsold manufactured goods amounted to N321.12bn in 2017 against the N90.43bn recorded in 2016, indicating a 255.19% increase over the period.”
Launch of New Africa Dialogue: remarks by President Paul Kagame (CSIS)
Let me say that the main lines of US policy toward Africa have hardly changed since the end of the Cold War. To be very frank, if I could remember how many times I have had discussions with distinguished leaders in the United States and across Africa, talking about how we could relate to each other. There have been so many meetings over so many years, and we always keep coming back more or less to the same thing. We keep asking what is it that we could do, and yet we end up not doing much about that. But Africa has changed tremendously, and so has America and the rest of the world. It is therefore very important to rethink how Africa and the United States relate to one another.
US refuses visa for Kenyan delegation to UN meeting (The East African)
The United States refused to issue visas to more than half of the Kenyans who were seeking to travel to New York for the United Nations General Assembly week. “A delegation of 60 people from Kenya applied for visas. Only 27 of the 60 got them,” said James Mureu, vice chairman of the Kenya National Chamber of Commerce and Industry. Mr Mureu made the disclosure on Tuesday in a talk at a New York trade show of African products.
Côte d’Ivoire: Country Strategy Paper (2018-2022) and 2018 Country Portfolio Performance Review (AfDB)
Regional Integration and Trade (extract, pdf): Regional integration, one of the five pillars of PND 2016-2020, is one of the Government’s top priorities despite some challenges. The Integration Strategic Plan for 2017-2020, which Côte d’Ivoire has adopted, seeks to achieve its dual ambition as economic hub in the region and as a major continental player. With a GDP 36% close to that of WAEMU, Côte d’Ivoire is a key actor at regional level. At the African level, the country seeks to be among the most prosperous economies, by continuing to increase its overall trade balance which remains positive with the various regional and continental blocks (see Graph 5). The main integration challenges are related to weak infrastructure in the transport and energy sectors. The other challenges are commercial, and concern the economic impacts of tariff disarmament which could stem from the implementation of the agreement on the continental free trade area as well as the unilateral conclusion of agreements with the EU under the regional Economic Partnership Agreement.
Growth prospects remain strong, supported by robust oil and cocoa production. Inflation has remained in single-digits. S&P upgraded Ghana’s ratings from B- to B with a stable outlook in September 2018. The government continues to step up efforts to address financial sector vulnerabilities, with the recent purchase and assumption of five banks. However, Ghana has been affected by the volatile environment for emerging and frontiers markets, which has exerted pressure on the currency resulting in cedi depreciation. Program performance has been affected by external and domestic factors. Available fiscal data through end-July point to much expenditure front-loading on goods and services and lower-than-programmed revenue, especially VAT and import duty. On this basis, achieving end-December fiscal targets hinges on strengthening both expenditure discipline and tax compliance, beyond measures adopted in the mid-year budget review. The authorities remain strongly committed to the program targets. The 2019 budget would need to address persistent revenue shortfalls and start tackling decisively the issue of exemptions.
New orders for key US-made capital goods fell in August after four straight months of strong gains and the goods trade deficit widened sharply, prompting some economists to significantly lower their economic growth estimates for the third quarter. Still, growth projections for the quarter remained at lofty levels, with other data on Thursday showing increased investment in wholesale and retail inventories last month. The Federal Reserve raised interest rates on Wednesday for the third time this year, and Chairman Jerome Powell told reporters that this was “a particularly bright moment” for the economy.
The US Census Bureau announced the following international trade, wholesale inventories, and retail inventories advance statistics for August 2018: The international trade deficit was $75.8bn in August, up $3.8bn from $72.0bn in July. Exports of goods for August were $137.9bn, $2.3bn less than July exports. Imports of goods for August were $213.7bn, $1.5bn more than July imports.
Friday’s Quick Links:
Australia is keen on boosting free and open trade with East Africa
President Buhari urges ECOWAS to harmonise for consensus candidates at AU, UN
Akufo-Addo assures Buhari of safety of Nigerians in Ghana