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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Transnet

10 Oct 2018

Selected African trade events now underway:

NTM Week 2018 (9-11 October, Geneva: Shaping sustainable trade amid protectionism

2nd Africa-Turkey Economic and Business Forum (10-11 October, Istanbul). Update: Erdogan calls on Africa to trade in local currencies

Events to diarise:

(i) Respect for IP – Growing from the Tip of Africa (23-25 October, Sandton); (ii) IORA Tourism Ministerial (23 October, Port Elizabeth); (iii) Consultative meeting on the SADC Entrepreneurship Support Facility (24 October, Windhoek)

Tripartite FTA update: COMESA welcomes South Africa’s ratification

South Africa has ratified the Tripartite Free Trade Agreement becoming the fourth country to do so after Egypt, Uganda and Kenya. This is according to a notification sent by the South African Government to the Chair of the Tripartite Task Force, Ms Chileshe Kapwepwe, who is the Secretary General of COMESA. The process of ratification has been set in motion in a number of member states and it is expected that this target will be reached by end of April 2019, which is the deadline that the Tripartite member states set for themselves. With this latest development, 10 more ratifications are now needed for the Agreement to enter into force. “This development adds to the aura of expectations around the TFTA which groups 29 of the 55 countries negotiating the AfCFTA,” the COMESA Director of Trade and Customs, Dr Francis Mangeni, who is also a member of the technical negotiating team, said in Lusaka, adding that all the Annexes to the TFTA Agreement have been concluded.

On the basis of the provisions on transitional arrangements, he explained, once the threshold for minimum number of ratifications is achieved, then implementation of the Agreement commences immediately, on the basis of the principle of variable geometry. This is aided further, by the fact that exchange of tariff offers is near complete. All the member states, save for SACU countries, EAC countries and Egypt chose to offer their respective RECs preferential arrangements and were therefore not negotiating tariff offers. “The negotiations between EAC and Egypt are complete,” Dr Mangeni said. “Those between SACU/Egypt and SACU/EAC are nearing completion. In the latter case, divergence has narrowed down to just one product line. All the negotiating parties have agreed to a deadline of December 2018.”

Negotiations on the Tripartite rules of origin are highly advanced. From the total of 5,387 tariff lines, Rules of Origin have now been developed for 3,267 tariff lines (at 6-digit HS 12 version), representing 60.8% of all the tariff lines. In addition, a draft manual on application of the Rules of Origin has been developed and is ready for use. A number of tripartite instruments have also been developed and are now ready for use. The tripartite guidelines on implementation of Trade Remedies are ready for use and so are certificates of origin, export declaration and import declaration forms among others. In addition, the Tripartite Agreement on the Movement of Business Persons has also been finalized and will be ready for use once it undergoes legal scrubbing. [Youth Connekt Africa Summit in Kigali: Experts advocate for ‘made in Africa model’ to drive AfCFTA]

Termination of the South Africa-Zimbabwe trade agreement: what next? (tralac)

What is the background to this bilateral agreement, what does it provide for, why is it being terminated now, and how will trade between South Africa and Zimbabwe in future be conducted? Are there other bilateral trade agreements which may go the same way? Are bilateral trade agreements involving only certain Members of a Customs Union permissible? Do the recent developments indicate the advance of a proper rules-based trade regime for Southern Africa? This Policy Paper discusses these questions. It will also refer to relevant provisions in the SACU Agreement and the SADC Protocol on Trade. It concludes with a discussion about overlapping membership challenges and the amendment of the provision dealing with derogations under the SADC Protocol on Trade. [The author: Gerhard Erasmus]

Zimbabwe: Trade deficit down 44% (The Herald)

Zimbabwe’s trade deficit went down 44% to $127m in August 2018 from $229m in February 2018 on the back of significant growth in exports during the seven-months period. Official statistics from the Zimbabwe National Statistical Agency show that between February and August 2018, the country’s total exports amounted to $2,4bn, a 24% increase, from $1,9bn recorded in the same period last year. Zimbabwe’s total trade for the period February to August 2018 increased by 25% to $6,4bn, from $5,1bn recorded in the same period in 2017.

ECOWAS FTA update: National experts validate draft Supplementary Acts on community rules of origin

Regional experts have validated the draft Supplementary Act fixing community rules of origin and procedures applicable to goods originating in ECOWAS. When adopted, the validation would, among others, repeal and replace Protocol A/P.1/01/03 dated 31 January 2003 which had defined the notion of products originating in ECOWAS Member States. Broadly, through the various articles, the national experts examined how sufficiently processed or transformed were the products under consideration, the notion of originating industrial products, identification of originating industrial products, goods manufactured in free zones or under suspense or end-use procedures, principle of territoriality, Sets, the proof of Community Origin, Validity of the Proof of Origin, Control of the Proof of the Community Origin, repeal, Dispute resolution. The work of the national experts is expected to be presented to the meeting of Directors-General for onward consideration by the Ministers of Finance of the region. All 15 Member states, the ECOWAS Commission, the WAEMU Commission and GIZ were also represented at the meeting. [Fitch: ECOWAS medicine registration to boost pharmaceutical growth prospects]

Promoting SME competitiveness in Francophone Africa: standards open doors to trade (ITC)

Companies in 16 French-speaking African countries are more likely to export when they comply with international standards, according to a joint survey (pdf) by ITC and the Permanent Conference of African and Francophone Consular Chambers. Among 9,000 firms surveyed, only 25% have an internationally recognized certificate, generally for quality or safety. Getting more agriculture firms certified could boost the number of exporters. Only 7% of enterprises in the agriculture sector export, but 70% of those that do hold an international certificate. The survey also found that the smaller the firm, the less likely it was to have an internationally recognized certificate. Extract (pdf):

More than 9,000 in-depth surveys. In total, 9,396 enterprises were surveyed in Benin, Burkina Faso, Cameroon, the Central African Republic, the Republic of the Congo, Côte d’Ivoire, the Democratic Republic of Congo, Gabon, Madagascar, Mauritania, Morocco, Niger, Senegal, Togo, and Tunisia. The survey captured information on a wide variety of firms. Seventy-nine percent are micro firms, defined here as having 1–9 employees, 16% are small firms (10–49 employees), 4% are medium-sized (50–249 employees) and 1% are large (250+ employees). Regarding sectors, 43% of the enterprises surveyed are active in the retail sector, 33% in services, 16% in manufacturing and 8% in agriculture.

The larger the firm, the more likely it is to export. Micro enterprises are primarily involved in the retail sector (46%), selling goods such as food and drinks, clothing, furniture, pharmaceutical products and electronics. Small enterprises are mostly active in the services sector (33%) and medium-sized and large firms tend to be engaged in manufacturing (31% and 34%, respectively). Unsurprisingly, the larger and the more industrial the company, the more likely it is to export: only 9% of micro enterprises sell their product/service abroad, compared with 25% for small firms, 35% for medium-sized and 47% for large firms. [Note: The French version can be accessed here. Related: ITFC launches Islamic trade finance programme for West Africa’s SMEs]

Agriculture in Africa: selected updates

Identifying and promoting regional value chains in leather and leather products in Africa (UNCTAD)

The leather and leather products (LLP) industry provides a tremendous opportunity to the region to form regional value chains and add greater value to the region’s exports. At present, the region is the largest source of the basic raw material (i.e. hides and skins) to the leather industry of the world but exports it with little value addition. This study identifies potential regional value chains for Africa that can be formed in LLP. The report examines the changing patterns of intra-regional and global trade of sub-Saharan Africa, highlighting the importance of intra-regional trade in leather and leather products. Inputs and outputs of leather industry are identified and their emerging global as well as intra-regional trends are highlighted. It also estimates intra-regional trade potential in LLP. The impact of tariff liberalization on potential intra-regional trade is also explored.

Sustainable agricultural mechanization: A framework for Africa. The framework, developed by the AU and the FAO, identifies 10 priorities for AU member states to include in their national plans, ranging from the need for a stable supply of machine spare parts and innovative financing mechanisms, and the importance of regional collaborations that allow for cross-border hiring services. [Download:  pdf The Sustainable Agricultural Mechanization: A Framework for Africa (4.50 MB) ]

Open access World Development article: Can commercial farming promote rural dynamism in sub-Saharan Africa? Evidence from Mozambique. The authors: Steven Glover, Sam Jones.

African Cotton, Textiles & Apparel Monitor: Issue #30 is posted

Kenya: Shady parallel economy where tax-free billions roam (Business Daily)

Since the partnering of the Kenya Revenue Authority, the Kenya Bureau of Standards and Anti-Counterfeit agency to stamp out a secret economy run by powerful individuals out to cut corners, a lid has been lifted offering a sneak preview into the shadowy dealings estimated by the Kenya Association of Manufactures at Sh200 billion. Usually described by government officials as cartels, they are roaming free in almost all sectors of the economy jeopardising the effectiveness of policy planners. Illegal imports are circulating freely in the economy, many companies are facing survival battles and standards of goods having been compromised as some of the very officials employed to guard against such economic crimes look the other way. Development economist Anzetse Were says underground economy is rampant because the government has fundamental capacity constraints.

Ghana: Government will no longer absorb CTN cost (GhanaWeb)

The government will not be able to absorb the cost of the cargo tracking note (CTN) when the implementation of the module starts on 15 October 2018. This, however, means that shippers or importers are now to pay for fees or charges applicable to the CTN module contrary to an initial pledge by the government to absorb the cost. To mitigate the burden on shippers, information available to the GRAPHIC BUSINESS indicates that the government intends to introduce a scheme under the CTN where an importer that ships not more than three 20-foot equivalent unit (TEU) into the country in a month would be exempted from paying any charges in relation to the CTN.

In Bali: Launch of the Global Dialogue on Trade platform (ICC)

Launched today by ICC Secretary General John W.H. Denton and WTO Director General Roberto Azevedo, the new Global Dialogue on Trade platform will provide concrete support to the on-going intergovernmental approach to improving the multilateral rules-based trade system. The initiative – digitally enabled and managed by ICC – will convene open dialogue among multilateral institutions, think tanks and businesses from around the world. Following an initial call for debate themes, the platform will seek input from users to assess elements in the existing framework that work well, elements that should be improved and what should be addressed to help the WTO effectively deal with the challenges and disruptions of the 21st century. The call for themes will close on 31 October, to be followed in November by the platform’s first three privately-held, digital debates on selected themes. [Related: IMF’s Christine Lagarde: How global trade can promote growth for all; WTO’s Roberto Azevêdo: Financial inclusion in trade – reducing the global trade finance gap]

Today’s Quick Links:

Namibian Trade Forum launches roadshow to promote the EU-SADC EPA

Russia to set up nuclear energy plant in the COMESA region

Kenya, Uganda cooperate on trans-boundary water matters under IGAD auspices

AfDB publishes newly harmonized “additionality” framework for private sector operations

UNCTAD’s eTrade for all: Year in Review 2017-2018

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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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