The WTO’s Dispute Settlement Body meets today: selected updates

1. India asks WTO to set up panel against US for imposing higher duties on steel, aluminium. China, the EU, Mexico, Canada, Norway, Russia, Turkey and Switzerland, who were similarly penalised by the US, have also asked the dispute settlement body of the WTO to set up a panel to sort out the issue, as per the DSB agenda available with BusinessLine. “The DSB, which will meet in Geneva on Wednesday, will examine all the requests. If the US rejects the first-time requests, members will have to file a second request in the next meeting, which would not be allowed to be rejected and panels will be subsequently constituted,” according to a trade official. [Trump trade fight heads to global court as WTO nears the rubicon]

2. US adviser hints at evicting China from WTO. One of President Trump’s top economic advisers has suggested there could be a case for “evicting China” from the WTO. In a BBC interview, Kevin Hassett chairman of the president’s Council of Economic Advisers said China had “misbehaved” as a member of the WTO. He also claimed that the US had been failed by the organisation. The question he argued is whether that can fixed through bilateral negotiation, by reform of the WTO or even, by removing China from the WTO. The last of those is a not official US policy. It was the final, least preferred, of three options that Dr Hassett listed and he expressed it as a question: “Should we pursue evicting China from the WTO?” It might not even be possible. But it is a startling suggestion to hear from a senior figure in the US administration.

3. WTO should restore capacity for settling disputes: Chinese official. A senior Chinese trade official on Tuesday stressed here that the WTO should restore its capacity to settle disputes. Zhang Xiangchen, China’s ambassador to the WTO, said during an interview with Xinhua that China has established a high-level working group on reforming the WTO with the EU. According to the Chinese ambassador, the priority now is to return the body to its role as a dispute settler. Other urgent tasks for the WTO include achieving an agreement on fishery subsidies in 2019 as planned, e-commerce and investment facilitation, and improvements in transparency.

Related commentaries from the tralacBlog

1. Assuring Continuation of Effective WTO Dispute Settlement (Alan Wolff, WTO Deputy Director General): Until the past few years, for many there was widespread complacency over the existence and state of the liberal world trading system. If progress was needed that could not be achieved at the WTO, it could be achieved through regional and bilateral agreements. Times have changed. It turns out that a well-functioning multilateral trading system is essential to all Member countries and to all who trade, as well as to the world economy more generally.

2. The Settlement of Trade Disputes: Where do we stand and what can be done? (Gerhard Erasmus, tralac Associate): The crisis in the dispute settlement arrangement of the WTO has a paralysing effect on the multilateral trade system. While the workload of the Dispute Settlement Body increases, proceedings for new disputes cannot be finalized. Should the legitimacy associated with finality and clarity through independent dispute settlement be eroded, unilateral measures and retaliation (the very actions to be prevented by a rules-based system) could follow. The WTO crisis will deepen.

3. Modernisation of the multilateral trading system – WTO reforms (Talkmore Chidede, tralac Researcher): The multilateral trading system and the World Trade Organisation (WTO) are today under threat. The system is being shaken by increasing protectionism and the imposition of non-tariff barriers and more specifically, in recent times, tariff barriers, notably by the largest trading nations – the United States (US) and China. Trade negotiations have reached more than an impasse – and the dispute settlement system may well come to a grinding halt unless appointments to the Appellate Body are made.

Underway, in Lusaka: 39th COMESA Policy Organs meetings, culminating in the Council of Ministers meeting (25 September)

The 39th COMESA Policy Organs meetings began yesterday in Lusaka, to run until Sunday, 25 November. They include meetings of the Committee on Administration and Budget, the Intergovernmental Committee and the Council of Ministers. The Council of Ministers meeting on Sunday will consider recommendations of the Inter-Governmental Committee (23-24 November). A key item on the agenda is the financing of the COMESA budget, where a status report on the member states payment of their annual subscriptions to the organization will be provided. A new resource mobilization strategy that has been developed by the Secretariat, proposing innovative ways of financing, will also be tabled before the IC and Council.

ICE Eastern Africa: updates

1. Addressing the 22nd Meeting of the ICE in Kigali, UNECA Deputy Executive Secretary, Ms Giovanie Biha, said the ECA was helping countries across the continent to develop national AfCFTA implementation strategies. “And we will be setting up national dialogues so that governments, civil society and the private sector can come together to discuss the way forward,” she said, adding building a consensus behind the AfCFTA was the only way to achieve its implementation. She said the national strategies will complement the broader trade policy of each country and identify key trade opportunities, current constraints and steps required to take full advantage of the AfCFTA. Capacity development on gender mainstreaming to advocate for gender-sensitive implementation of the AfCFTA is also crucial, the Deputy Executive Secretary said.

2. It’s time to implement the AfCFTA to stimulate economic transformation in Africa. “Currently East African countries are trading amongst themselves at only half their potential, and the growing local demand is met by imports from outside the continent rather than by local production,” explained Andrew Mold, Acting Director of the ECA in Eastern Africa. “The AfCFTA will enable East African countries to increase their exports of manufactured goods in the region and on the continent.”

3. TMEA Chief Executive Officer, Frank Matsaert: “Trade is everyone, and therefore trade policies should consider gender specific outcomes. Establishing clear links between trade policies and women’s economic empowerment will result to better livelihoods for families and reduced poverty levels. We are working closely with East African governments to ensure women are key players of trade initiatives.”

4th Pan African Forum on Migration: update

Member states presenters noted the importance of the cooperation with neighbouring states as key to create stronger border regimes and systems and emphasized that a balanced view of migration is required to increase development and security. It has been underlined that free movement can help to facilitate the transfer of skills and close skill gaps, but skills must be recognized across borders. The importance of data and information was highlighted are essential to help develop evidenced based labour migration frameworks and policies. The expected outcome will include a Draft Common African Position on Migration and on Refugees based on existing continental and regional normative and legal frameworks on migration and refugees. It is expected that the Forum will inter-alia result in the following outcomes:

Rwanda: Trade deficit narrows by 36% in three years (New Times)

Rwanda witnessed a 36% drop in its trade deficit since 2015 thanks to the Made-in-Rwanda policy that has increased the country’s industrial output. The progress on the performance of manufacturing industries was shared by Felicien Mutalikanwa, the Chairman of Rwanda Manufacturers Association during the celebration of African Industrialisation Day at Kigali’s SEZ yesterday. Since the launch of the Made-in-Rwanda campaign in 2015, he said, total exports increased by 69% from $559m in 2015 to $944m in 2017. Total imports decreased by 4%, from $1.849bn in 2015 to $1.772bn in 2017, he revealed.

“Exports growth reflects the positive impacts of the Made-in-Rwanda policy. It is quite visible that it has started to bear fruit and we believe this is just the beginning. According to National Institute of Statistics of Rwanda, the share of industry in national GDP was 16% in the second quarter of this year,” he said. In 2017/18, according to Mutalikanwa, manufacturing activities increased by 8% boosted by food processing activities, which increased by 15%. He said manufacturing of chemicals, rubber and plastic activities grew by 8% while textiles increased by 19%. “We realised the growth of textiles and leather products thanks to the Government’s policy that discourages importation of second-hand clothes and shoes,” he said.

Nigeria’s Industrial Council: membership, terms of reference, thematic areas

Bank of Tanzania: Our target is unlicensed foreign exchange dealers, money launderers

BoT governor Prof Florens Luoga told a press conference yesterday that the bureaux de change targeted in the exercise were believed to be proxies for illicit financial flows in and out of the country. Luoga said the central bank, and the government, had become concerned about a recent upsurge of illegal syndicates among forex shops, many of which either don’t have official licences or are operating through the use of borrowed or counterfeit licences. “We started our underground investigation six months ago, and realized that cases of money laundering and backroom operations were rife in some forex shops. Many of these were part of a global chain entailing illegal and clandestine foreign currency transactions,” the BoT supremo stated. He said the bank is working in collaboration with state security organs to ensure that cases of money laundering and illegal foreign currency transactions in the country are dealt with firmly. According to Prof Luoga, issuance of new licences to foreign exchange shops were halted at least three months ago, and no new applications for such businesses will be accepted pending the completion of the ongoing investigations. [Global cashew prices rise after Magufuli orders military intervention]

Tanzania: World Bank statement on lifting the suspension of missions (World Bank)

During a meeting between His Excellency President John Pombe Magufuli and the World Bank’s Vice President for Africa, Hafez Ghanem, the President assured the Bank that Tanzania will not pursue any discriminatory actions related to harassment and/or arrest of individuals, based on their sexual orientation. As a member country of the World Bank Group, Tanzania endorsed the Bank’s new Environment and Social Framework (effective October 2018), that strengthens the Bank’s commitment to social inclusion of vulnerable and disadvantaged people and non-discrimination on the grounds of their age, gender, ethnicity, religion, physical, mental or other disability, social, civic or health status, sexual orientation, gender identity, indigenous heritage and economic status.

Africa loses billions of dollars due to child marriage (World Bank)

Child marriage will cost African countries tens of billions of dollars in lost earnings and human capital, says a new World Bank report launched ahead of the AUC’s second African Girls Summit on Ending Child Marriage taking place in Ghana this week. According to Educating girls and ending child marriage: a priority for Africa, more than three million (or one third of) girls in Sub-Saharan Africa marry before their 18th birthday each year. Today, the region has the highest prevalence of child marriage in the world. While many African countries have achieved gender parity in primary education, the report notes that girls lag behind boys at the secondary level. In Sub-Saharan Africa, seven out of 10 girls complete primary education, but only four out of 10 complete lower secondary school. On average, women who have a secondary education are more likely to work and they earn twice as much as those with no education. The report also documents the impact of child marriage and girls’ education on more than three dozen other development outcomes.

2018 Review of the IMF’s Capacity Development. On 14 November, the Executive Board of the IMF concluded the 2018 Review of the IMF’s Capacity Development Strategy. Directors supported the five specific areas of recommendations that underpin the Fund’s CD Strategy: