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tralac’s Daily News Selection

tralac’s Daily News Selection

08 Nov 2019

3rd Ordinary Session of the STC on Migration, Refugees and Internally Displaced Persons: updates, documentation   

(i)  AU member states urged to ratify the protocol on free movement to achieve free trade. In her opening remarks the African Union Commissioner for Social Affairs, Mrs Amira Elfadil Mohammed Elfadil, said the AUC, together with Governments of Mali, Morocco and Sudan, are in advanced stages of establishing the African Centre for the study and Research on Migration in Mali; the African Migration Observatory in Morocco and the Continental Operational Centre in Khartoum for Combating Irregular Migration as directed by the AU Assembly. The host agreements have been signed with all these governments and AUC is now at an advance stage of putting necessary legal and operational institutional framework to ensure their operationalization.  Ms Judith Uwizeye, Minister in Office of the President of the Republic of Rwanda and the Chairperson of the outgoing STC, highlighted that the Protocol on Free Movement of Persons in Africa requires 15 ratifications to enter into force. She emphasized the importance of Member States to make an effort to expedite ratifications in order to accelerate mobility and integration in Africa. “Without mobility and free movement, even the AfCFTA will stay challenged as we cannot achieve free trade properly without free movement”, she said.  The minister urged other Member States to ratify the protocol in the months to come under the new leadership of this STC so that the protocol comes into force.

(ii)  Progress in the implementation of free movement of persons in Africa: signatures and ratifications (pdf).  Ratifications have increased from one to four. The countries that have ratified and deposited the Protocol with the AU, include Rwanda, Niger, Mali and Sao Tome and Principe. The Protocol requires 15 ratifications to enter into force. Signatures to the Protocol remains at 33, including Angola, Bukina Faso, Central African Republic, Chad, Cote d’Ivoire, Comoros, Congo, Djibouti, Democratic Republic of Congo, Equatorial Guinea, Gabon, Gambia, Ghana, Guinea, Kenya, Lesotho, Liberia Mali, Malawi, Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Somalia, South Sudan, Sao Tome & Principe, Sudan, Tanzania, Togo, Uganda and Zimbabwe.

Recommendations in the implementation of free movement in Africa:

In order to address the challenge of slow pace of ratification of the Protocol on Free Movement of Persons, there is need for the AU Commission to intensify advocacy of the Protocol and African Passport.

The Free Movement Champion should promote, support and be the voice of free movement, he will nominate regional champions to work collaboratively with him to accelerate continental popularisation of free movement including lobbying for the production and issuance of the African Passport, amoungst other key activities he has been entrusted with. He will motivate Member States to ratify and deposit the instrument with an aim of getting the Free Movement Protocol come into force as soon as possible. Finally, his role will ensure that this flagship project is regularly monitored and reported on. The AUC, RECs and relevant Partners should support Member States to ratify and implement the Protocol, including to produce and issue the African Passport by lobbying for more financial and technical resources.

(iii)  A study on the operationalization of the African Humanitarian Agency (pdf).  The Department of Political Affairs is currently charged with the African Union’s efforts on humanitarian actions.  In this respect, the Humanitarian Affairs, Refugees and Displaced Persons Division is one of the two Divisions that currently make up the Department of Political Affairs. This is expected to change in 2021 as a result of the merging of the Humanitarian Affairs Division with the Social Affairs Division under the current AU Reform process. When operationalized, the AfHA would be expected to fill a major lacuna in humanitarian action in Africa by providing effective coordination effort on the handling of humanitarian crises on the African Continent. This would involve contributions at the strategic level as well as synchronizing and sharing best practices all over the continent in interactions with Member States that have the ultimate responsibility for the protection of citizens either directly and/or, through regional mechanisms, in particular, the Regional Economic Communities (RECs). The AfHA expected to have on the ground presence in humanitarian operations in Member States in a collaborative manner with emergency response and assessment teams data bases with RECs, regional mechanisms and Member States. The African Union, through the AfHA, is expected to provide support and intervention on as needed basis when nationals of Member States face dire situations. In effect, AfHA will combine a heavy strategic orientation with a light footprint on operations. [Member states experts’ meeting on the operationalization of African Humanitarian Agency: report of Johannesburg workshop (April 2019)]

#ICSOE2019 for Eastern Africa.  Asmara communiqué reaffirms benefits of regional integrationThe final communiqué insisted on the importance of regional cooperation to tap on the potential benefits of the AfCFTA, for job creation, social cohesion and industrialization. Extract on AfCFTA issues:

The meeting considered that global ‘risks’ such as Brexit and the U.S-China trade dispute could in fact be a source of opportunity for the continent. Meanwhile, more information was requested on: the informal parts of Eastern African economies, cross-border trade and migrant remittances. Other points raised were the role of RECs in AfCFTA acceleration and the opportunities presented by shared waters in regional integration. The session ended recognising: the need for concrete plans to accelerate regional tourism; the need to involve youth in blue economy activities; and lastly the success of the Government of Rwanda in their detailed and effective monitoring and evaluation framework.

The meeting provided a common understanding of AfCFTA implementation, determining the back story, current status and recommended ways forward. The meeting ascertained that many technical parts of the Agreement are in place. Participants understood that services liberalization will not happen instantly – with the Protocol for services merely establishing the parameters for a first round of negotiations on business, communications, financial services, tourism and transport services. The meeting recollected the five ‘operational tools’ that were launched at the July 2019 Summit.

Having recognised the profound benefits of the AfCFTA, the meeting recommended next steps for the African continent, including the Eastern Africa region. These were to:

Finalize remaining critical components

Increase the number of state parties

Create institutions, establish operative mechanisms, introduce obligations into law and regulation: optimise implementation, through complementary measures such as national strategies

Conclude Phase II of negotiations and use the AfCFTA as a vehicle for achieving the African Single Market.

Zambia finalizes its AFCFTA strategy and implementation plan (UNECA)

Speaking during the closing session of the experts meeting to finalize Zambia’s AfCFTA strategy and implementation plan (5-6 November),  Mr Paul Mumba, Ministry of Commerce, Trade and Industry chief economist,  informed the meeting that the work on the AfCFTA, “does not end here, but starts now, he urged the participants to collectively own the strategy and share with their respective constituencies”. He assured the meeting that sensitisation is continous and called on every one to take a personal responsibility in raising awareness about the AfCFTA. The  Chief Economist said that “the final draft of the AfCFTA Strategy will be submitted to the Minister of Commerce, Trade and Industry by Friday 8 November 2019”. Once submitted it will be reviewed internally by senior management before submission to Cabinet. Once cleared, the strategy  will be officially launched by Ministry. He further advised that, once the Strategy is approved, it is critical to undertake national sensitization and continued advocacy so that the Zambian stakeholders own the document.

Industrial Development Report 2020: Industrialising in the digital age  (UNIDO)

The top 50 economies in advanced digital production:  Figure 1.12 (pdf) provides an early glimpse into how different economies are engaging with advanced digital production technologies. It lists the top 50 economies in the patenting, exporting and importing of these technologies, ordered by their corresponding shares in world totals. Ten frontrunner economies account for 91% of patents, 70% of exports and 46% of imports of new technologies. But, looking just at global shares may be deceptive:  Figure 1.13 illustrates how the ranking of economies in each dimension changes using alternative indicators: for patents, using regular (those not defined as global) instead of global patent families, and for exports and imports, using revealed comparative advantage indices instead of world market shares.

Much of the world, especially in Africa, is not engaging with the new technologies. First, large parts of the world, especially on the African continent, remain excluded from recent technological breakthroughs. These economies are not producing or importing any significant values of the most representative goods within this technological realm. In fact, about half of all economies included in the analysis can be considered excluded from the current wave of technological change.

The manufacturing sector has the lion’s share of technologically advanced firms. Manufacturing tends to be the key sector for innovation, though the analysis also includes service industries. In India, 8% of all firms belonging to the digital leaders group are in the manufacturing sector, in Nigeria, 75% and in Kenya, 50%.  In India 94% of highly innovative firms are in manufacturing, in Pakistan, 92% and in Kenya, 58%.  This result is hardly surprising: as the IDR  2016 showed, the manufacturing sector normally has higher levels of R&D and innovation expenditures. This has traditionally been considered a key explanation in the academic and policy debate of manufacturing’s prominence as an engine of economic growth.  [UNIDO: Innovation and connectivity required for a smooth transition to Industry 4.0]

A smoother trade transition for graduating LDCs (CGD)

Assuming that the post-Brexit tariff schedule will maintain some tariff peaks, British policymakers will face the conundrum of what happens to LDC exports of those high tariff products when they graduate. One option would be for the UK to replicate the EU’s GSP+ program and help LDCs transition into that as they graduate, as the EU did with Cape Verde. But if the eligibility conditions and other provisions remain the same, this will not be an option for some graduating LDCs. Most notably, Bangladesh would not meet the vulnerability criteria that exclude large exporters and other apparel exporters would struggle with the more restrictive rules of origin (Annex A, pdf). In other cases, countries may not be ready to take on the commitments involved with ratifying and effectively implementing 27 international conventions related to labor standards, the environment and good governance.

Whether or not GSP+ is an option, the UK - and other preference providers - should have a clear strategy for graduation that includes a transition period - such as the three years that the EU currently offers. During that period, full benefits continue. This gives a graduating country, which is likely to still be relatively poor, additional time to consolidate its progress. At that point, however, a sudden jump in tariffs could still have a significant negative impact on the country’s exports. To avoid sudden trade shocks related to graduation, the UK should go beyond what the EU does and phase in the higher MFN or standard GSP tariffs slowly, adding no more than, say, two to three percentage points per year. So, for example, an apparel exporter transitioning to a MFN tariff of 12% would gain an additional four to six years to adjust to increased competition from other exporters. The gradual phasing in of UK tariffs should be authorized in the trade preference legislation and it should apply automatically to all graduating LDCs—unless they become ineligible for another reasons. Since it would be available equally to all LDCs, it should not conflict with WTO rules governing nondiscrimination (Annex A). [The author: Kimberly Ann Elliott.  Related:  The G20 Initiative on "Supporting Industrialization in Africa and LDCs"- a review of progress]

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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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