tralac’s Daily News Selection
Two key trade policy events are taking place this week:
The Aid for Trade Global Review 2019 gets underway in Geneva on Wednesday, ending on Friday. By addressing the supply-side capacity and trade-related infrastructure constraints of developing, and in particular least developed countries, Aid for Trade can help advance the 2030 Agenda for Sustainable Development. Aid for Trade aims to make trade more inclusive and ensure that its benefits are spread further and wider.
The 35th Ordinary Session of the Executive Council takes place on Thursday and Friday in Niamey. It will be followed by the 12th Extraordinary Summit on AfCFTA (7 July) and the First Mid-Year Coordination Meeting of the AU and the RECs (8 July)
Afreximbank’s flagship publication, African Trade Report 2019: African trade in a digital world, is posted. This report also undertakes a comprehensive review of policies and regulatory reforms that can ensure a successful transition towards digital transformation and propel countries to their full potential in the digital age. It stresses that some of the key challenges that have affected the growth of African trade – most notably a deficit of physical infrastructure and its inherent implications for supply-side constraints – will not suddenly disappear in the digital era. The report then argues for bold investment to bridge the digital divide that exists between Africa and the rest of the world. In addition to digital infrastructure, success in the digital era will depend on the capacity of African governments to strengthen their competitiveness and bolster their regulatory environments for the development of digital ecosystems. Furthermore, African governments must adopt and implement strong incentive measures for African businesses to increase their digital competitiveness and boost their level of innovation, to drive the process of digital transformation. The report is organised into eight chapters (pdf):
After this introduction and executive summary, Chapter 2 covers thematic research about “Digital Transformation for Intra-Regional Trade and Industrialisation in Africa.” Chapter 3 reviews global and African economic and financial developments, while Chapter 4 discusses global and African trade and the trading environment. Chapter 5 reviews the dynamics in commodity markets; Chapter 6 discusses intra-African trade; Chapter 7 reviews the potential implications of digital transformation for intra-African trade. The concluding Chapter 8 reviews the prospects for global and African economic and trade developments in the near term.
South Africa: Trade statistics for May 2019 (SARS)
The R1.74bn trade surplus for May 2019 is attributable to exports of R112.07bn and imports of R110.33bn (pdf). Exports increased from April 2019 to May 2019 by R8.43bn (8.1%) while imports increased from by R3.17bn (3.0%). Exports for the year-to-date (1 January to 31 May) increased by 10.4% from R459.53bn in 2018 to R507.36bn in 2019. Imports for the year-to-date of R513.41bn are 8.9% more than the R471.61bn imports recorded in January to May 2018, leaving a cumulative trade deficit of R6.05bn for 2019. On a year-on-year basis, the R1.74bn trade surplus for May 2019 is a deterioration from the R4.76bn recorded in May 2018.
Botswana: International merchandise trade statistics March 2019 (pdf, Statistics Botswana)
Botswana’s overall exports amounted to P6, 457.3 million, representing a rise of 89.2%, compared to the revised February 2019 value of P3, 413.3 million. On the other hand, imports stood at P5, 759.2 million, showing a decrease of 7.5% from the revised February 2019 value of P6, 226.5 million. Subsequently, the country recorded a positive trade balance of P698.1 million. The UAE was the largest destination for Botswana’s exports, having received 22.6% of total exports during the month under review. India and Belgium came second and third with market shares of 18.5% and 17.6%, respectively. Israel and South Africa got 9.1% each, Singapore and Hong Kong received 7.5% and 6.3% of total exports respectively. Botswana’s exports were mostly absorbed by Asia with a market stake of 64.8%, the EU with 17.8% and SACU with 13.2%. South Africa was the major source of imports into Botswana with a contribution of 60.7% to the country’s total imports. Namibia and Canada, followed with contributions of 14.1% and 5.3% respectively. India and Belgium also made significant contributions to the country’s imports with 4.4% and 4.3% in that order. [Bank of Namibia: First Quarter Bulletin, Jan-March 2019 (pdf)]
Beginning in January 2020, countries within the West African sub-region will be able to use a single currency called ECO. The currency was adopted by the Authority of ECOWAS Heads of State and Government on Saturday in Nigeria’s capital Abuja. The West African leaders endorsed the currency at their 55th Ordinary Session and approved a road map towards the currency’s issuance in January 2020. There was a roadmap to ensure that all member countries meet three primary criteria for the adoption of the currency. That includes member countries having a budget deficit of not more than 3%; average annual inflation of less than 10% with a long-term goal of not more than 5% by 2019. Countries were expected to also have gross reserves that can finance at least three months of imports. The other convergence criteria that have been adopted by ECOWAS are public debt or Gross Domestic Product of not more than 70%.
The EAC Budget presented to the House last week by the Deputy Minister for Foreign Affairs and East African Cooperation of Tanzania, Dr Damas Ndumbaro, amounts to $111,450,529. The EAC Budget is to be appropriated, inter alia, as follows: EAC Secretariat ($53,296,404), EALA ($18,973,845) and the East African Court of Justice ($4,225,241). According to the Chair of Council of Ministers, the priority interventions for FY 2019/2020, include the consolidation of the Single Customs Territory and promotion of intra- and extra-EAC trade and export competitiveness, development of regional infrastructure, effective implementation of the Common Market Protocol and the enhancement of regional industrial development. Other areas include the implementation of the roadmap towards the EAC Monetary Union, institutional transformation focusing on implementation of the institutional review recommendations and improvement of performance management at the EAC Organs and institutions. The 2019/2020 Budget is to be financed by Partner State contributions through the Ministries of EAC Affairs ($49,791,446); Ministries responsible for Education ($4,379,968) and Ministries responsible for Fisheries ($ 2,060,845). Development partners will support the Community to the tune of ($54,031,725) while Member Universities will inject $468,300. The miscellaneous revenue is pegged at $296,145 while the General Reserve shall contribute USD 422,100. [Kenya’s Cabinet Secretary, Ministry of EAC and Regional Development, Adan Mohammed: Kenya is fully committed to EAC integration process]
Directors welcomed the National Strategy for Transformation’s focus to increase reliance on the private sector as an engine of growth and job creation, and highlighted the supportive measures to bolster financial development and mobilize national savings and improve education. Noting Rwanda’s inherent challenges in attracting private investment, they welcomed the African Continental Free Trade Area as a means for creating larger markets. They saw initiatives such as the G-20 Compact with Africa, together with aid directed toward blended finance, as vehicles to leverage additional private financing.
Outcomes from the G20 meetings in Osaka, Japan
pdf G20 Osaka Leaders’ Declaration (755 KB) : extract. We welcome the pdf G20 Ministerial Statement on Trade and Digital Economy (89 KB) in Tsukuba. We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open. International trade and investment are important engines of growth, productivity, innovation, job creation and development. We reaffirm our support for the necessary reform of the World Trade Organization (WTO) to improve its functions. We will work constructively with other WTO members, including in the lead up to the 12th WTO Ministerial Conference. We agree that action is necessary regarding the functioning of the dispute settlement system consistent with the rules as negotiated by WTO members. Furthermore, we recognize the complementary roles of bilateral and regional free trade agreements that are WTO-consistent. We will work to ensure a level playing field to foster an enabling business environment. [Sixteen accompanying annexures are available for individual download] [ pdf Business and Policy Examples for Sustainable and Inclusive Growth through Trade and Investment (6.18 MB) - refer to Paragraph 53, G20 Ministerial Statement on Trade and Digital Economy]
From development to differentiation: just how much has the world changed? (UNCTAD)
Given the divergent growth performances of developing countries since the establishment of the WTO, there is a growing debate on whether these can still be collectively categorized as ‘developing’ and whether those that have enjoyed sustained growth over the past quarter century should continue to receive special treatment in the context of trade, and by implication other international negotiations. This paper (pdf) traces the history and reasons for the emergence of special and differential treatment provisions in the trade negotiations. It examines various development indicators in order to assess whether the developing world has evolved to the extent that a change in this basic principle of the multilateral trading system is required. The paper argues that the economic and social gaps between developed and developing countries remain significant despite the gains in some countries over the last quarter century.
Fund transfers by Moroccan expatriates: context, evolution and prospects for capacity-building (UNECA)
The main purpose of the study (according to the terms of reference) is to analyse the general context and dynamics of Moroccan emigration, as well as the determinants for fund transfers, particularly those intended for investment. This report has three central themes (pdf). The first concerns the general situation of Moroccans living abroad and the main socio demographic characteristics. The second deals with the main features of Moroccan expatriate fund transfers. It presents a few analytical elements for understanding the strengths and weaknesses of transfers, as well as the opportunities and risks. The third covers policy recommendations, for the purposes of lifting the constraints weighing on fund transfers and boosting the contribution of these transfers to Morocco’s development.