tralac’s Daily News selection
The AfCFTA and the US-Kenya Free Trade Agreement challenge: getting beyond divide-and-rule (Wilson Center’s African Program)
Hardly had South African President Cyril Ramaphosa settled into his chairmanship of the African Union and his compatriot, Wamkele Mene, assumed leadership as Secretary-General of the fledgling and still largely aspirational African Continental Free Trade Area agreement before both began to face a baptism by fire in the form of the United States’ and Kenya’s intent to pursue their own bilateral free trade agreement - a formidable challenge to the AfCFTA. How Ramaphosa as 2020 AU Chair and Mene as AfCFTA’s first SG confront this bilateralist challenge to continental trade integration will determine much about the AfCFTA’s future as Africa’s flagship for achieving global economic power status within the world’s fast-shifting geo-economic/strategic landscape.
How Mene and Ramaphosa, in their respective new positions, will navigate such potential disruption is unclear. One suggestion emanating out of Washington is for the AU, African Development Bank, and Africa Trade Policy Centre (within the UN Economic Commission for Africa) to develop a draft continental trade deal with the US to replace AGOA in 2025 (if not sooner). Another possible approach is for African stakeholders to pro-actively engage the US Congress, particularly the House Africa Subcommittee and the Congressional Black Caucus, to leverage broader congressional support for Africa. Ahead of the 2020 US-Africa trade ministerial to be held in Washington, discussions on the future of the post-AGOA US-Africa partnership should be centered on the promotion of Africa’s regional integration processes and the implementation of the AfCFTA. [The authors: Francis A. Kornegay, Faith Mabera]
USTR’s South Africa GSP review: Google’s submission (InfoJustice)
South Africa has made strong progress in crafting a fair use system that is closely modeled on the US legal framework, including a four-factor test drawn from 17 U.S.C. § 107 that strikes an appropriate balance between the interests of authors, creators, and users. The adoption of fair use in South Africa would clearly benefit US exporters, particularly when the alternative is a legal system that is less consistent with US law. The United States has a strong and innovation-oriented copyright system that protects the legitimate rights of creators, enables new innovation, and generates massive consumer benefits. In addition to other aspects of the US copyright system, the US fair use framework has been critical to the growth of the US digital economy and US digital exporters. One economic study found that American industries that benefit from fair use generate $368bn in US exports each year.
Sustaining the growth of American exports increasingly requires promoting the adoption of fair use-style measures in key foreign markets, such as South Africa. Many of the core technologies that drive American exports of goods and services depend upon fair use or similar rules to function, and exporters of these technologies will be disadvantaged if South Africa does not develop a compatible legal system. It is critical for USTR and the US government to support South Africa in its own efforts to craft a fair use framework, and to provide capacity building assistance where necessary to ensure that these new rules are implemented effectively and consistently with US law. As part of providing support for these efforts, USTR should reject the elements of the GSP petition that complain about South Africa’s efforts to develop a fair use system modeled on U.S. law.
The United States International Trade Commission has determined that a US industry is materially injured by reason of imports of acetone from Belgium, Korea, and South Africa that the US Department of Commerce (Commerce) has determined are sold in the United States at less than fair value. As a result of the Commission’s affirmative determinations, Commerce will issue antidumping duty orders on imports of this product from Belgium, Korea, and South Africa. The Commission’s public report, Acetone from Belgium, Korea, and South Africa, will contain the views of the Commission and information developed during the investigations.
Selected postings on the on-going African response to COVID-19:
African Union, Africa CDC update. As of 17 March 2020, 443 total COVID-19 cases have been reported in 30 African countries. A total of 10 deaths have been reported from four African countries. Africa CDC is working with all affected countries and is mobilizing laboratory, surveillance, and other response support where requested. See Table 1 for the full list of countries in Africa reporting cases and deaths
South Africa issues regulations to curb stockpiling, price hikes. Government has imposed regulations that will limit unjustified price hikes and product stockpiling, to protect consumers, as the number of COVID-19 pandemic cases rise to 150. The regulations, announced by Trade, Industry and Competition Minister Ebrahim Patel during a press briefing on Thursday, deal with pricing matters during the national disaster. “We are doing this to ensure that we don’t have unjustified price hikes or stockpiling of goods. We are doing this to protect consumers and ensure fairness and social solidarity during this period,” said Patel. On Thursday, government issued directives under the Disaster Management Act and Regulations under both the Competition Act and Consumer Protection Act. According to the regulations, prices may not exceed the increase in the cost of the raw material. The profit levels, he added, should not be hiked higher than in the period just before the period of the COVID-19. “The regulations will cover the full supply chain and will limit price increases of suppliers,” Patel said.
South Africa: “Unanimous” decision to cut rates by 1% as coronavirus threatens global recession. The South African Reserve Bank has slashed the interest rate by 1%, bringing the country’s prime lending rate to 8.75% from 20 March to stimulate the economy as the coronavirus is threatening to plunge the country deeper into recession. “The decision was unanimous,” said the Bank’s governor, Lesetja Kganyago. The governor said the MPC’s quarterly projection model indicated three repo rate cuts of 25 basis points (0.25%) in the second, third and fourth quarter of 2020. “Monetary policy can ease financial conditions and improve the resilience of households and firms for the short-term, “ added Kganyago, before warning that monetary policy alone cannot keep the economy out of trouble. [Download: Statement of the Monetary Policy Committee]
Statement by SA’s Minister of Public Works and Infrastructure, Patricia De Lille. Another key intervention by DPWI is the installation of a fence at Beitbridge border between South Africa and Zimbabwe. This is to ensure that no undocumented or infected persons cross into the country and vice-versa. This is in line with one of the measures announced by the President in that South Africa’s borders and ports are to be secured with immediate effect. The President stated that 35 of the 53 land entry points will be closed. This measure will, however, not be effective if the fences at the border are not secure, which in many places, they are not. In terms of Section 27 (2) (l) of the Disaster Management Act, No 57 of 2002, I have invoked emergency procurement procedures in relation to the erection and repairs of the border fences, east and west of the Beitbridge Border Post. This resulted in the following process unfolding in this past week: On Tuesday 17 March the due diligence and site inspections were undertaken between DPWI, Defence and the Defence Force. It was identified that a total of 40 kilometres of 1.8 meter high fence has to be erected, 20 kilometres on either side of the Beitbridge Land Port of Entry. The cost of the project is approximately R37.2m. All 40 kilometres of fence will be finished within one month.
COMESA Competition Commission warns against fake claims for COVID-19 cures. The COMESA Competition Commission has issued a warning to companies and individuals that are selling products not medically tested and approved, which they claim can treat and prevent the coronavirus. “Such companies and individuals are advised to refrain from such conduct as it is contrary to article 27 of the COMESA Competition regulations. If any company or individuals are found wanting, the commission will not hesitate to apply the provisions of the regulations which include sanctions of up to $300,000,” George Lipimile, the CCC chief executive said in a statement.
Rwanda: 24 businesses fined over price hikes. The Government said Thursday that it had so far imposed penalties on 24 businesses in the City of Kigali that unlawfully increased prices of certain products. The inspections conducted, as provided by the Competition and Consumer Protection laws, found abnormal increases in the prices of some products, the Ministry said. The measures that were taken include fining businesses and instructing some to “temporarily suspend their business activities.” The Ministry of Trade and Commerce told The New Times that at least 24 retailers and traders who received penalties increased prices of food products and hygiene essentials.
BMW South Africa is to shut down its Rosslyn manufacturing plant in Pretoria for two weeks because of risks posed by Covid-19 and the resulting impact on demand for new vehicles
Kenya Association of Manufacturers launches online directory for locally manufactured goods, aimed at enhancing supplies and ensuring trade transactions continue uninterrupted in the wake of Coronavirus scourge.
Global Trade Review: Development banks pledge fresh support as Covid-19 crisis deepens
The Gambia: ECOWAS sensitises stakeholders on brown card insurance (The Point)
Dawda Sarge, the chairman national Bureau of ECOWAS Brown Card, also explained that its main objectives are to enhance the free movement of road users and foster regional integration, whilst guaranteeing a fair and prompt compensation framework to victims of road traffic accident for losses suffered by visiting motorists from other ECOWAS member states. “We operate through a network of 14 bureaus in each of the 14 ECOWAS member states that share land border. Each national bureau performs two main functions; issuing bureau and to investigate and settle claims arising out of road traffic accidents.” Ismaila Saidy, representative of Ministry of Trade, stated that the card plays an important role towards the realisation of the development aspiration of ECOWAS member states and citizens. “The government of The Gambia will continue to support bureau’s programmes and policies to enable them to realise its goals and objectives.”
South Africa is partnering with the UNEP Chemicals and Waste Management Programme on an ambitious two-year project to strengthen the country’s institutional approach towards sound management of chemicals and wastes. The project’s first key task will be to conduct a thorough analysis of current chemicals and waste management infrastructure. The focus will be on emerging contaminants and what the country has already accomplished to manage these chemicals. Key gaps and challenges will be identified, particularly within South Africa’s existing regulatory framework and institutional capacity. South Africa will address a lack of capacity at the country’s ports of entry by training customs officials on regulatory enforcement and compliance. By developing a standard operating procedure for border and customs officials across the country’s nine provinces, authorities will be better equipped to detect illegal activities and illicit trade. The training will also include how to sample and how to use portable analytical instruments to better screen imports of chemicals, in particular, leaded paints from entering South African borders.
Saudi Ports Authority (Mawani) announced on Wednesday the launch of a new shipping line connecting the Kingdom of Saudi Arabia with East African countries through the shipping line “CMA CGM”, the world’s leading company in shipping services. It is also the first container shipping-line to reach King Fahd Industrial Port in Yanbu, on the Red Sea coast, which contributes to enhancing the movement of exports and imports to and from Yanbu.
Central Bank Digital Currency: Address by IMF deputy managing director Tao Zhang (IMF)
It’s a real pleasure for me to be here for this conference on China’s Trade and Financial Globalization. I want to thank the Institute of Global Affairs of the London School of Economics for the invitation. This afternoon, we’re going to take up a topic that everybody seems to be talking about these days – namely, central bank digital currency (or “CBDC” for short). This is a “widely accessible, digital form of fiat money that can be legal tender,” and a recent BIS survey of central banks shows that 80 percent were exploring CBDC. I’ll start by laying out what I see as some of the main pros and cons of CBDC, as well as their international implications. I’ll say a few words about a few recent pilot experiences with these currencies, and also about some variants and alternatives to CBDCs. Finally, I will close by sharing what the IMF is doing in this area. Digital currencies issued by central banks can bring a number of benefits: