tralac’s Daily News Selection

tralac’s Daily News Selection

26 Nov 2019

pdf Request for observer status by the African Union at the WTO (61 KB)

The following communication, dated 22 November 2019, addressed to the Chair of the General Council and the Director-General of the World Trade Organization, is being circulated at the request of the delegation of Benin on behalf of the African Group:  

I wish to request Your Excellency to allow the African Union to have an observer status in the WTO. The African Union is Africa's inter-governmental Organization with the ultimate objective to accelerate the political and social-economic integration of the Continent. As you may be aware, the African Union operationalized the AfCFTA at the 12th Extraordinary Summit of the Heads of State and Government of the African Union in Niamey, Niger, on 7 July 2019. Once fully implemented, this historical continental flagship project of the AU’s development Agenda 2063, would make the continent the world's largest single market with 1.5 billion people and a combined GDP of $2.5 trillion. In recognition of the determinant role that trade plays for economic growth and sustainable development in today's globalized economy, the African Union attaches great importance to the enhancement of trade performance of its Member States of which 44 are Members of the World Trade Organization. Nine African countries are currently candidates to the WTO, including 6 LDC's.

Africa remains committed to the rules-based multilateral trading system in which WTO serves as the principal global organ of governance. To ensure that Africa is effectively integrated and represented into this international trading system and that its interests and concerns are adequately taken into account, the AU has been given the mandate by its Member States as per its policy organs, to coordinate and harmonize the position of African countries and regions, with a view to speak with one voice in international trade negotiations and fora. I have no doubt that the granting of observer status to the AU and its participation in the activities of the WTO and its technical sub-committees will facilitate the formulation of common African policies and enhance the equitable participation of the member States of the WTO to contribute to a rules-based multilateral international trading system. Above all, this will greatly reinforce the growing strategic partnership between the African Union and the WTO.

Note: Text of letter from Mr Moussa Faki Mahamat, Chair of the African Union Commission, addressed to Ms Sunanta Kangvalkulkij, Chair of the General Council and Mr Roberto Azevêdo, WTO Director-General, on 17 November 2019

pdf African Group elements on agriculture: For meaningful development outcomes (89 KB) at the 12th Ministerial Conference (WTO)

The following communication, dated 22 November 2019, is being circulated at the request of the delegation of Benin of behalf of the African Group: 

Agriculture is a vital sector for achieving Africa's aspirations to growth and development. Agriculture contributes by almost 15% to the total GDP of the continent, creating job opportunities for almost half of its working force, and therefore agriculture for Africa is a matter of food security, employment, income and mere existence.

The negotiations on Agriculture in the DDA are therefore of paramount importance to the African Group. It is widely known that Agriculture remains the most trade-distorted sector in the context of WTO rules. Hence, reforming the agricultural rules is a critical development outcome in the DDA.

The African Group reiterates its position that discussions on reforming the Agreement on Agriculture (AoA) in particular and the WTO in general shall be revolving around the means to make the rules more development oriented and responsive to the challenges our continent is facing. Therefore, our priority in Agriculture negotiations is to correct the historical imbalances in the AoA in a manner that would enable our countries to respond to the challenges of food security compounded by climate change.

On the Special Safeguard Mechanism:

African countries have been subject to massive and repetitive import surges, resulting over the years and in the absence of any means to safeguard the market in substantial reductions in production mounting in some cases to more than 50% decrease, and the loss of numerous jobs.

Members are to intensify the discussions in the dedicated session on SSM of the Committee on Agriculture in Special Session with the view of concluding the negotiations on the SSM by MC12.

The Mechanism shall cover both price-based and volume-based triggers with no a priori product limitations as to its availability, and it shall be easily applied by developing countries, with flexible time limits for application to address the needs of the developing Member utilizing the mechanism.

The operation of the SSM shall be carried out in a transparent manner, and the Member invoking the SSM should afford any interested Member the opportunity to consult with it in respect of the conditions of application of the measure. Transparency requirements shall be conducted in a manner that would not impose onerous burden on developing countries and especially LDCs and NFIDCs.

Communiqué on the Chairperson’s working visit to South Africa (AU)

The Chairperson of the AUC Moussa Faki Mahamat concluded a two-day working visit to the Republic of South Africa. Accompanied by Dr Ibrahim Assane Mayaki, CEO of AUDA-Nepad and other senior officials, the Chairperson held discussions with President Cyril Ramaphosa, Foreign Minister Naledi Pandor, Finance Minister Tito Mboweni and senior officials from the Department of International Relations and Cooperation. The two leaders and their teams held discussions to discuss the strategic priorities of South Africa ahead of the country’s assumption as Chair of the African Union in 2020.

President Ramaphosa emphasised his commitment to deepen engagement regarding unresolved conflicts on the continent, including Libya, as part of South Africa’s desire to accelerate action to Silence the Guns by 2020. President Ramaphosa also reaffirmed South Africa’s support to the AfCFTA and the critical role that infrastructure development should play in making the AfCFTA a reality.  For his part, the Chairperson of the Commission Moussa Faki Mahamat noted the importance of the upcoming presidency of South Africa to head the Union in 2020, and reaffirmed the commitment of the Commission and to support South Africa in preparing for this crucial role to push ahead with promoting the continental agenda. [Communiqué on the Chairperson’s working visit to Botswana]

South Africa: Staff concluding statement of the 2019 Article IV Mission (IMF)

IMF staff projects economic growth to remain sluggish in 2020 - below population growth for the sixth consecutive year. On current policies, the medium-term growth outlook would remain subdued accompanied by somewhat muted inflationary pressures. With low growth and low job creation, the increasing labor force is projected to exacerbate unemployment pressures, poverty, and inequality. Amid weak economic performance, credit expansion remains low, notwithstanding an uptick in unsecured loans. External debt and gross financing needs remain elevated, while external financing continues to be heavily reliant on non-FDI inflows. However, the relatively easy global financing conditions are providing breathing space to finance government operations. South Africa’s undeniable economic potential remains largely untapped and the recent economic performance points to rising risks. The economy faces three immediate challenges...:

The vulnerable outlook emphasizes the urgency of rebuilding policy buffers and implementing reforms to put the economy on a sustainable and inclusive growth path. Failure to implement the needed adjustment in government and SOE spending and efficiency will worsen debt dynamics, erode financial stability, and further raise the country risk premium. With delays in structural reforms, growth and social conditions will worsen. Implementing the reforms now will benefit from the benign financing conditions in international markets and prevent disruption from an abrupt adjustment in future.

Ethiopia: Science, Technology and Innovation Policy Review  (UNCTAD)

The STIP review contrasts Ethiopia's rapid economic growth with much slower growth in technological learning and innovation capacity as a major obstacle to sustaining this impressive performance and achieving more sustainable development. It shows that on paper, Ethiopia has most of the policies, regulations, background studies and roadmaps necessary to kick-start a successful process of technological learning, innovation and technological upgrading. However, in reality the country faces challenges in policy implementation across public institutions related to capacity constraints and sub-optimal allocation of efforts and resources. “Innovation ultimately takes place at the firm-level, but the state plays a key role as a facilitator of the national innovation system,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics division during the report’s launch in Addis Ababa. “The state is the glue that holds the innovation system together.”

The STIP review also provides an in-depth analysis of two sectors as case studies for understanding how STI policy can stimulate technological upgrading and innovation and thereby improve the performance of industries identified as important for Ethiopia's development. They are the apparel and textile sector for resource-based labour-intensive exports and the pharmaceuticals sector for knowledge-intensive import substitution. The STIP review is based on fact-finding missions to Ethiopia conducted in December 2018 and March 2019.

PIDA Week 2019 is underway in Cairo on the theme: Positioning Africa to deliver on Agenda 2063 and economic integration through multi-sectoral approaches to infrastructure development

(i) Extracts from the concept note: Intended outcomes of PIDA Week include (pdf). Validation of key studies that contribute to the PIDA PAP 2 process; Validation of the Dispute Settlement Mechanism for operationalization of the Single African Air Transport Market; Progress on the Digital Transformation Strategy; Validation of the Strategy to unlock access to rural areas; Validation of the strategy paper as well as the Detail scoping study of the Continental High Speed Railway Network, followed by a capacity building workshop on the Luxembourg Protocol on railways; Launch of the African Network for Women in Infrastructure (ANWIn)

Sector specific workshops will be also held during the week, including: Validation workshop of the detailed scoping study for the Continental High Speed Railway Network; Efficiency and competitiveness of ports in Africa; Coordination workshop on the implementation of the Tourism Action Plan 2019-2021; Meeting of the working group in charge of the feasibility study on the African Tourism Organisation

(ii) Speech by AUC Commissioner for Infrastructure and Energy, Dr Amani Abou Zeid: Yesterday the Members of the Bureau of the STC on Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism composed of the Arab Republic of Egypt, Democratic Republic of Congo, Somalia, Lesotho and Togo, met and validated the PIDA PAP 2 integrated corridor approach, the projects selection criteria, the strategy to unlock access to rural areas and the detailed scoping study of the Continental High Speed Railway Network.

With the validation of the PIDA PAP 2 studies by the Ministers the African Union Commission in collaboration with AUDA-NEPAD, the RECs and the Member States will engage the consultations for the selection of the list of priority projects which are expected to be implemented from 2021-2030.

At the political level, there is a need for African countries and RECs to mainstream PIDA projects into their national and regional development plans. It is also important that African Member States take ownership in the development and implementation of national and continental initiatives. This is necessary to ensure that there are clear and harmonized ambitions, strategies and political commitments towards ensuring access to infrastructure services as well as provide the necessary policy and financial instruments for infrastructure development at the local, national and regional levels.

(iii) Speech by AUDA-NEPAD CEO, Mr Ibrahim Mayaki: As we embark on the development of the next set of priority projects in PIDA PAP 2 we should take note of the lessons learned and match these with the imperative to deliver on the promise of infrastructure for Africa’s people. We particularly welcome the integrated corridor development approach for PIDA PAP 2.

With the aim of fully implementing MoveAfrica, AUDA-NEPAD developed a Traffic Light System (TLS) to rank and track the level and the quality of the service of Africa’ s transport corridors, starting with border posts as a point of departure. Four border posts, Beitbridge, Chirundu, Kasumbalesa and Kazungula along the North-South Corridor in the SADC Region were selected for the pilot phase. If we have to achieve the Continental Free-trade Area we must reprioritise African border posts and commit to addressing the unnecessary delays at these critical trading routes. To date the TLS has been expanded into 21 COMESA member states, 15 SADC members states and 15 West African countries. The current corridor coverage is on the North South Corridor, Abidjan Lagos Corridor and the Trans Kalahari Corridor. The TLS under MoveAfrica is growing becoming a credible tool that ensures the Africa Continental Free-trade Area is actualised.

(iv) PIDA Week Programme (pdf) 

CFA franc reform: CEMAC launches deep reflection (Cameroon Tribune)

The 15th Extraordinary Summit of Heads of State and Government of 22 November, in Yaounde, mandated the CEMAC Monetary Union and BEAC to carry out a study and make proposals within reasonable time. The six countries of the Economic and Monetary Community of Central Africa (CEMAC) have unanimously agreed to reform its currency so as to have a stable and strong legal tender capable of giving the economies the boost for better development and population's livelihood. The direction the reform will take can only be known when the CEMAC Monetary Union and Bank of Central African States, mandated by the Heads of State of CEMAC to carry out the study, must have tabled their proposals in the shortest or reasonable time possible.

According to point seven of the 16-point resolutions read by the President of the CEMAC Commission, Daniel Ona Ondo, "... concerning monetary cooperation with France on the CFA Franc, the Heads of State decided to engage a deep reflection on conditions and framework of new cooperation. To this effect, they mandated the Central African Monetary Union and BEAC to propose within a reasonable timeframe an appropriate scheme that can lead to the evolution of a common currency."