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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Simon Dawson | Bloomberg

01 Oct 2018

Starting tomorrow, in Geneva: WTO Public Forum 2018. Under the main theme of Trade 2030, the Public Forum’s sub-themes will be sustainable trade, technology-enabled trade, and a more inclusive trading system. Our profiled sessions from the extensive programme:

On Tuesday: Industrialisation 4.0: how to achieve sustainable results for Africa?; AgTech disruptors in East African value chains: implications for regional integration and inequality; How a plurilateral ecommerce agreement can meet African economic development needs?

On Wednesday: Africa goes digital: leaving no one behind; Women and e-commerce: from data to implementation; How to harness the industrialization opportunities of the African Continental Free Trade Area in the digital age

On Thursday: Data and statistics for gender-responsive trade policy; Harnessing technology for transformation and inclusive trade for Africa and the LDCs: the role of the WTO; Creating value at origin: putting SMEs at the heart of inclusive and sustainable trade in Ghana and Ethiopia

Chiedu Osakwe: WTO fundamentals are sound, but the architecture requires reform and modernisation for the 21st century global economy (ICTSD)

What are the problems facing the WTO? The range spans conflicting economic models, architectural and structural inadequacies, and rules, functions, and procedures that require radical updates...Eight, any serious reform of the WTO, as a contributor to growth and a healthy global economy, requires a changed approach and engagement with Africa, and by Africa. That realisation is dawning on all sides. The paradigm for engagement with Africa must change, consistent with actions that flow from the realisation that good policy invites positive engagement.

A reformed approach to engagement with Africa should be in full recognition of the Agreement Establishing the African Continental Free Trade Area. The AfCFTA is not only about an integrated liberalised single market for trade in goods and services. It is both an economic and a geopolitical turn for Africa. It represents a strategic, economic, and legal order for rules-based engagement with the global economy. Therefore, the legal and policy framework for relations with Africa must and should be based on the new terms governing trade arising from the AfCFTA. In responding to Africa’s economic policy choices, WTO members should reform their approach to Africa, and stop designing “assistance” programmes or providing development aid as a substitute for rules-based trade and investment engagement. Furthermore, Africa as a market will be a centre of gravity in the global economy by 2050. The relevance of a reformed and refitted WTO, with a claim to universality, for the 21st century would depend substantially on its engagement with and acceptance of the AfCFTA. Across the board, Nigeria, in solid partnerships, will continue to provide leadership. [The author is Director General and Chief Negotiator, Nigerian Office for Trade Negotiations]

At UNGA side events: UNECA’s Vera Songwe advocates AfCFTA, digital identity, investment opportunities and strengthened partnerships

Reinvigorating trade and inclusive growth (WTO, IMF, WB)

Certain “frontier” areas of trade policy have high potential to lift global productivity and durably increase medium-term growth. The digital economy revolution is opening new opportunities for cross-border trade and investment. This is changing the nature of trade, elevating the roles of policies relating to electronic commerce (“e-commerce”), investment, and services trade. This reflects the international nature of supply chains and complementarity of foreign direct investment with trade in goods and services – the ‘trade-investment-services’ nexus. The effectiveness of this nexus, and of international supply chains, is also grounded in secure property rights, including for intellectual property. The growing overlap between trade regimes and domestic policy puts extra emphasis on effective regulatory cooperation. While the benefits are high in these areas, so too are the risks. On gender and trade (pdf):

Exporters in developing countries employ more women than non-exporters and jobs in export sectors tend to have better pay and conditions than those in the informal sector. In many developing economies women comprise up to 90% of the workforce in export processing zones, bringing jobs that provide higher income and greater job stability. The growth of global and regional supply chain trade, such as in apparel and assembled goods, has been a strong source of employment for women in developing countries. The impact of trade and trade policy on women is complex. Women can be affected by trade as consumers, as producers of traded goods and services, and as entrepreneurs with dominant ownership of exporting companies. The trade impact on female producers or exporters also depends on the role in the economy of the sector or industry where they are specializing and on whether they are employed in large or small firms. While the export sector is an important source of employment for women, the services sector is the largest employer of women. Further services trade reform, coupled with domestic regulatory reform, could thus help to drive further job creation for women in service sectors such as health, finance, and tourism, and in areas such as communications, distribution, and logistics that are becoming increasingly tradable. Table of contents (pdf) :

Introduction; Trade areas with high growth potential (Services trade, Regulatory cooperation, Electronic commerce, Investment, Market access for merchandise trade); Trade-related policies for inclusiveness (Trade and the empowerment of poor people, Rural economy, Micro, small, and medium-sized enterprises, Gender, Complementary policies to support inclusiveness); Role of the international trading system

pdf Zambia: 2019 Budget Speech (1.02 MB)  (MoF)

External sector performance: Export earnings increased by 20.7% to $4.6bn during the first half of 2018 from $3.8bn over the same period in 2017. Copper export earnings were the largest contributor at $3.5bn from $2.9bn following an increase in both price and export volumes. Non-traditional exports increased by 17.7% to $911m, from $774.1m. Notwithstanding the increase in export earnings, the current account deficit widened to $756.5m in the first half of 2018 compared to $340m in the corresponding period in 2017. This was explained by higher growth in imports relative to export earnings, an increase in interest payments on public sector external debt, and dividend payments to non-resident shareholders.

South Africa-Saudi Arabia Joint Economic Commission: dti update

In addition to co-chairing the JEC, Minister Rob Davies is leading a business delegation of South Africa companies from the financial services, agro processing and pharmaceutical sectors. The visit is also a follow up on President Ramaphosa’s State Visit to Saudi Arabia in July 2018 where Saudi Arabia pledged to invest $10bn in South Africa’s energy, defence and agricultural sectors. The 8th session of the JEC will assess the progress made and implementation of the commitments of the previous session and seek ways to further deepen trade, economic and social cooperation. Minister Davies will address a Business Forum, to be hosted by the Riyadh Chamber of Commerce.

Kenya’s push to lower regional tariffs hits snag (The Standard)

Kenyan exports to the region are likely to continue attracting high tariffs as EAC member states go slow on the proposed review of the Common External Tariff. According to some countries, the review is not top on their agenda. Instead, Rwanda, Uganda, Tanzania and Burundi have turned their attention to the promise of lower tariffs proposed under the nascent AfCFTA. Tanzania Revenue Authority Commissioner for Customs and Excise, Ben Usaje, said EAC countries were struggling with their own domestic fiscal demands, and that was why they were shelving the long-awaited review of the Common External Tariff.

He said besides the other four EAC member states, Kenya, the region’s biggest economy and which has been pushing for a review of the tariff, was also grappling with its own challenges, including implementation of the recently passed VAT regulations. “Since the countries participated in the AfCFTA trade negotiations, they have not shown any enthusiasm for the community’s CET. Again, they are also struggling with their domestic tax regulation issues. Tanzania will be watching closely to see if the other EAC members will rejuvenate the CET review talks and then we will act,” said Mr Usaje. He added: “The common narrative in East Africa is that Tanzania has been the stumbling block of a review of the CET because of its constant levy disputes with Kenya, but that is not the case.”

Working with the grain of African integration (ECDPM)

This Briefing Note (pdf) gives an overview of the complexities and challenges facing efforts at regional integration in Africa. While frustration with progress is widespread and with ambitions continuing to grow, the paper proposes that engagement with regional processes be based on a more explicit understanding of the political economy of regional processes. That is, it is important to take account of within and between state political interests in order to gauge where there is genuine traction for regional initiatives and therefore where support might be effective.

As part of thinking about furthering the regional agenda, this BN also points to the importance of effective monitoring, meaning not only following outcomes, but also tracking commitments made towards regional efforts. While a more realistic understanding of where and why countries engage in regional integration, and though improved monitoring of actual engagement can help identify where to support countries in their efforts, peer pressure and learning across regions can also play a role. The Pan African Coalitions for Transformation recently launched to play this role across a range of policy areas may help to fulfil this role. [The authors: Bruce Byiers, Jaime de Melo, Ed Brown]

PwC’s Truck Study: Digitisation and autonomous driving to halve costs by 2030

The digitization and automation of processes and delivery vehicles will reduce logistics costs for standardized transport by 47% by 2030, according to a new report from PwC’s Strategy& consultancy. The Global Truck Study 2018 (with a focus on the trucking sector in the EU) has found that around 80% of these savings will be attributable to the reduction of personnel in the transport and logistics industry. In addition, there will be enormous increases in efficiency: autonomous lorries, for example, will be able to travel 78% of the time from 2030 onwards, as opposed to 29% of the time since 2030. This will be because there will be no breaks for drivers and idling time will be reduced through the use of algorithms. The first-mile delivery of products will become more efficient over the next few years, primarily as a result of the automated assignment of freight to the truck, and platform solutions will replace manual administration tasks, which will release savings potential of 45% by 2030. For last-mile deliveries, data-driven demand analysis, automated deliveries (for example through drones) and reduced administrative overhead could see costs fall by 51%.

Monday’s Quick Links:

Mills Soko, Mzukisi Qobo: SA’s cancellation of bilateral investment treaties - strategic or hostile?

Bank of Namibia: Quarterly Bulletin, September 2018 (pdf)

European Commission Fact Sheet: Political negotiations on a new ACP-EU Partnership start in New York

NAFTA: United States-Mexico-Canada Agreement Text

Fletcher Tabuteau to lead NZ’s first trade delegation to South Africa

Chelsea Follett: Are tariffs Trump’s most anti-woman policy?

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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