tralac’s Daily News Selection
Paul Heald: Why South Africa should resist US pressure to extend copyright terms (InfoJustice)
The current term of copyright in South Africa is life-of-the-author plus 50 years. But the US is pressuring South Africa to extend the term to life-plus-70. Since the US is a net exporter of copyrighted media, like songs, books, and movies, US copyrights earn billions in revenue yearly. The US wants to prolong this trade imbalance as long as possible and deny foreigners free access to older US works. Research I have done shows that caving in to this demand would be bad for South African consumers. This is because copyright term extensions prevent works from entering the public domain and being republished for the public benefit. The negative effect on the availability of titles is palpable and dramatic. Just as important, keeping books under copyright imposes a direct cost on the public in terms of higher prices. South Africa is poised to adopt a Copyright Amendment Bill that aims to modernise its 1978 Copyright Act and ensure protection of the creative industries. But the proposed amendments are fiercely contested and the US has been adding to the pressure. A change to extend the terms of copyright would benefit the US, which exports far more copyrighted works to South Africa than it imports.
Remarks by High Representative/Vice-President, Josep Borrell, and Commissioner for International Partnerships, Jutta Urpilainen. So, why a new strategy, some might ask. It is a fair and good question. But so is the answer. This Strategy with Africa is a Strategy of the new geopolitical Commission. What do I mean with this? We live in a multipolar world, where we face increasing competition. At the same time, the realities are shifting in Africa. Economy is booming and the young population is growing rapidly. The old narrative and perception of Africa as a continent of instability and threats is challenged by huge emerging opportunities. Then there are the big global mega trends. Climate change and digitalisation already change the way we live. They are transforming our economies and societies. At the same time, the multilateral international order is under threat. When we believe in cooperation, some push for unilateralism.
These realities provide us both with a challenge and an opportunity. We want Europe to be stronger in the world. We can achieve our goals together with our partners. Not everything has to change. The new comprehensive Strategy builds on the priorities agreed at Abidjan in 2017 and the successful work of the Africa-Europe Alliance for Sustainable Investment and Jobs and its inclusive Task Forces. Now it is time to scale up and take the partnership to a new level. Therefore, what now needs to change is how the geopolitical Commission engages with Africa. I see our new approach built on four pillars:
Questions and Answers: Towards a Comprehensive Strategy with Africa. The EU is Africa’s largest trade and investment partner, and the main supporter of the AfCFTA with €72.5m mobilised by the end of 2020. In 2018, total trade in goods between the 27 EU member states and Africa was worth €235bn – 32% of Africa’s total. This compares to €125bn for China (17%) and €46bn for the US (6%). In 2017, the 27 EU Member States had foreign direct investment stock in Africa worth €222bn – more than five times either the US (€42bn) or China (€38bn).
We, the JAES Civil Society Steering Group, welcome the efforts of the EU to strengthen its partnership with Africa. We call on the EC and EEAS to ensure that they maintain a balanced approach and put people at the center by going beyond the five priorities. We believe that the involvement of African and European civil society in the definition and implementation of the strategy is crucial to make the entire process more democratic, transparent and accountable. We also welcome the recognition of the potential and key role of young people and women in the realisation of peace, sustainable and inclusive development. We look forward to an EU-AU Summit that gives civil society a real space to participate and to a strategy that truly responds to people, especially girls and young women’s aspirations, created through an open and inclusive process on both continents.
A suite of postings on the economic and trade impact of the coronavirus:
The spread of the coronavirus is first and foremost a public health emergency, but it’s also a significant economic threat. The COVID-19 shock will cause a recession in some countries and depress global annual growth this year to below 2.5%, the recessionary threshold for the world economy. Even if the worst is avoided, the hit to global income, compared with what forecasters had been projecting for 2020, will be capped at around the trillion-dollar mark. But could it be worse? UNCTAD published an analysis (pdf) on 9 March that suggests why this may be the case. Losses of consumer and investor confidence are the most immediate signs of spreading contagion, the analysis says. However, a combination of asset price deflation, weaker aggregate demand, heightened debt distress and a worsening income distribution could trigger a more vicious downward spiral. Widespread insolvency and possibly another “Minsky moment”, a sudden, big collapse of asset values which would mark the end of the growth phase of this cycle cannot be ruled out. “Back in September we were anxiously scanning the horizon for possible shocks given the financial fragilities left unaddressed since the 2008 crisis and the persistent weakness in demand,” said Richard Kozul-Wright, UNCTAD’s director of globalization and development strategies. “No one saw this coming – but the bigger story is a decade of debt, delusion and policy drift.”
Extract (pdf): Figure 3 below maps out data for the trade openness of economies to China (exports plus imports to GDP) representing a proxy for the depth and extent of real ties to China, together with debt servicing on publicly guaranteed debt to government revenue as sources of vulnerability facing developing countries since the viral outbreak. We use trade in goods (both exports and imports) in an attempt not only to capture the importance of China’s share of export demand but also the role of imports affecting global values chains. This data, for some 117 developing countries, shows that around a fifth of these economies are highly vulnerable to direct impacts of the COVID-19 shock due to a combination of deteriorating debt sustainability (captured by a growing share of public revenues going to service public debt obligations) with high exposure of their economies to trade and wider economic relations with China, including Mongolia, Angola, Gabon, Philippines, Mozambique, Vietnam, Cambodia and Zambia. These developing economies are closely linked to the Chinese economy through their participation in Chinese-led global value chains and also are reliant on commodity exports to China. In addition, China has become an important source of financing for developing countries, with loans to emerging market and frontier economies increasing 10-fold (from $40bn in 2008 to $400bn in 2017). For countries like Zambia, Mongolia, Ecuador, Venezuela, Angola, Kenya, Pakistan, Sri Lanka, Bolivia and Jamaica, China is now the largest official creditor.
The coronavirus (COVID-19) outbreak could cause global FDI to shrink by 5%-15%, according to an UNCTAD report (pdf) published on 8 March. The UN trade body had projected earlier a stable level of global FDI inflows in 2020-2021 with a potential increase of 5%. Now it warns that flows may hit their lowest levels since the 2008-2009 financial crisis, should the epidemic continue throughout the year. COVID-19’s negative impact on investments will be felt strongest in the automotive, airlines and energy industries, the report says. Investment Trends Monitor (pdf): Table 2 also lists the share of the reinvested earnings component of FDI for each region, indicative of the potential indirect effect that earnings losses could have on FDI. For example, the average -9% earnings losses projected to date for 2020 could affect 52% of FDI flows (this assumes losses are spread uniformly across MNE operations; in reality it is more likely earnings losses would be concentrated in foreign affiliates in affected areas, further augmenting the impact on reinvested earnings).
Ronak Gopaldas: Africa should make sure it ends up on the right side of coronavirus geopolitics (Business Day)
Of course, there are a couple of important caveats to these scenarios. The first is premised on coronavirus’s longevity and the ensuing contagion, which remain uncertain. Second, how severely the virus affects the Chinese economy remains to be seen. If China is able to mitigate the disruption quickly (as it was able to do with the SARS epidemic), these outcomes could become tail risks and nothing more. Given the authoritarian nature of its political system, China will be able to impose draconian crisis management measures in a manner that many Western democracies cannot. This is likely to help soften the impact of the outbreak. There is a great deal of speculation on how this will play out. African countries should be attuned to the dynamic nature of the crisis and its unplanned consequences. It would be negligent not to consider the possibility of a global geostrategic reset and its cascading consequences. Current developments may serve as the perfect catalyst for a rethink of the manner in which Africa engages with foreign partners. The continent’s policymakers will need to guard against exploitation in the midst of such a crisis and be alert to the risks associated with new partners bearing gifts and promises. [Uganda: Imports from China drop]
IMF’s Gita Gopinath: Limiting the economic fallout of the coronavirus with large targeted policies (IMF)
Central banks should be ready to provide ample liquidity to banks and nonbank finance companies, particularly to those lending to small- and medium-sized enterprises, which may be less prepared to withstand a sharp disruption. Governments could offer temporary and targeted credit guarantees for the near-term liquidity needs of these firms. For example, Korea has expanded lending for business operations and loan guarantees for affected small- and medium-sized enterprises. Financial market regulators and supervisors could also encourage, on a temporary and time-bound basis, extensions of loan maturities.
Considering the epidemic’s broad reach across many countries, the extensive cross-border economic linkages, as well as the large confidence effects impacting economic activity and financial and commodity markets, the argument for a coordinated, international response is clear. The international community must help countries with limited health capacity avert a humanitarian disaster. The IMF stands ready to support vulnerable countries with different lending facilities, including through rapid-disbursing emergency financing, which could amount up to $50 billion for low-income and emerging market countries.
Mozambique: National Financial Inclusion Strategy (2016-2022) mid-term review (World Bank)
Financial inclusion is a key enabler to reducing poverty and increasing shared prosperity. In Mozambique, despite considerable efforts to promote financial inclusion, less than half the population in 2016 had access to a bank account, mobile money account. In response, the government of Mozambique (GOM) launched an ambitious national financial inclusion strategy (NFIS) in July 2016. The NFIS implementation period is from 2016 to 2022, with an initial phase to 2018. By 2018, the percent of population with access to a bank account had declined slightly but was compensated by growth in mobile money accounts. A mid-term review (MTR) of the NFIS was undertaken to assess progress at the end of the first phase, recommend requisite course corrections, and establish priorities for the second phase. This report includes recommendations for priority actions for second phase of the strategy’s implementation and monitoring of progress. It is based on an examination of relevant written documentation and discussions with stakeholders during two visits to Mozambique between 2018 and 2019. [African Business Magazine: Towards an economy transformed by gas]
Kenya: We shall not allow in cheap Ugandan milk (Monitor)
Kenya has said it will not allow cheap milk imports to flood its market. This was said by the country’s Agriculture Cabinet Secretary Peter Munya, who also noted they had come up with a raft of reforms to protect local farmers as well as revive Kenya’s dairy sector. Kenya has since December had run-ins with milk exporters, particularly from Uganda, locking out dairy products from its market. At least, Ugandan milk exporters including Pearl Dairy, which produces Lato Milk and Lakeside Dairy, which manufactures Top Dairy milk, have been locked out of the Kenyan market. No official explanation has been provided and a February protest note, which had given Kenya an ultimatum of 15 days within which it had to explain its hostility specifically against Lato Milk it yet to be responded to. At the close of last week, Mr Munya told Daily Nation that importation of cheap milk had disadvantaged Kenyan farmers thus government would implement a raft of measures to stop its entry as well as punish those found importing it.
India’s External Affairs minister S. Jaishankar: Political correctness cannot justify trade deals (Mint)
“Obviously, in a globalised world, no economy can be an island to itself. But the exercise of engagement and its terms must be objectively addressed. Trade outcomes must be primarily justified by trade calculations not by political correctness. Their gains must be visible, probable, and practical and not just hypothetical scenarios,” Jaishankar said while addressing the Economic Times Global Business Summit in the national capital. “The debate between opportunities and risks is consequently both active and open. At stake is the livelihood of many, a concern underlined by the experience of large (trade) deficits,” the minister said. “Above all, they must promote manufacturing as the mainstay of the economy, not undermine it. There are strong strategic aspects to such negotiations,” which is why India has taken “a whole of” consultative approach to the process, he said. “I can’t have a strategy for India that is bad for Indian business, then I am hurting my national strategy,” the minister said later in a question and answer session. “Indian business is at the heart of India,” he added.