tralac’s Daily News selection
A reminder that the Joint Bureau of the African Union Ministers of Trade and the Council of Ministers of the AfCFTA took place this afternoon
AfCFTA Secretariat SG Wamkele Mene: ”The consideration for postponement doesn’t mean that there no longer is political will and that there is no longer political commitment. We have to adjust to conditions that unfortunately nobody could have anticipated and we have to give the space to governments to solve the public health crisis as a matter of priority.”
Declaration of Extra-Ordinary Meeting of the Bureau of the STC Communication and ICT. We, the Ministers in charge of Communication and ICT, meeting through video conferencing on 5 May 2020 as the Bureau of the Specialized Technical Committee on Communication and ICT to consider strategies and actions to support the continental strategy on COVID-19 pandemic, hereby commit ourselves to (extracts):
Build partnerships with private technology companies, social entrepreneurs, national and international organizations to make use of existing technologies to manage the COVID-19 crisis.
Encourage the design of new applications and services to help in the fight against COVID-19, to facilitate services such as delivering food and other essential items to those most in need by optimizing the entire supply chain via digital government services.
Develop a continental data policy and regulation framework to achieve uniform data processing system and harmonized legislations that enables cross sector and cross border data transfer, interoperability, aggregation, encryption and anonymization of location data as a valuable asset that can be used to develop digital solutions to counter COVID-19 crisis.
Work with African ICT and Communication stakeholders to develop a continental digital platform to serve as a secured virtual space to disseminate existing data bases, technical solutions and information on ways and means to combat COVID19 crisis.
Pursue and expedite the implementation of the pdf African Strategy on Digital Transformation (1.80 MB) .
Nyaguthii Maina: Africa must not let disputes with foreign investors undermine its Covid-19 response (Business Day)
In light of these pressing challenges, African states must be prepared for the imminent threat of ISDS claims to undermine these emergency measures and responses. Examples of this risk are already emerging in other parts of the world. The Peruvian government was recently cautioned against measures it intended to take in its efforts to ease the movement of essential goods and workers during the Covid-19 pandemic. The government aimed to waive toll fees, but media reports indicate that concessionaires could bring ISDS claims over unilateral changes to their contracts.
African states should urgently call for the suspension of investor-state arbitration for all Covid-19-related measures, and urge others to do the same. State resources and global financial support should be focused on public health systems, restoring economic health and managing related crises, not defending perverse claims made in times of a global pandemic. [Note: The author is attached to the International Institute for Sustainable Development]
Ethiopia: Request for purchasing under the Rapid Financing Instrument (IMF)
External accounts are expected to weaken materially. The current account is projected to strengthen modestly this fiscal year amid a significant decline in imports of goods and services on the back of weak domestic demand and lower project inflows. Falling remittances and the concurrent decline in exports — ed by air travel — would less than offset the import contraction amid a substantial strengthening in the terms of trade (including from higher coffee prices and lower global oil prices). However, the overall balance of payments is projected to weaken, on the back of a large drop in foreign direct investment, including due to privatization delays, in part due to the pandemic. As a result, an additional financing gap of $1.7bn has emerged for 2019/20. In 2020/21, both exports and imports are expected to grow on the back of an incipient recovery, resulting in a deterioration in the trade balance, but an improved services balance and stronger remittances will mitigate the impact on the current account. Privatization revenues will help contain the additional financing gap, which is projected to reach $731m. [See Box 1: Economic policy response to COVID-19]
AFSTA/ACTESA: Restrictions on cross-Border movement affecting seed supply chain. Restrictions on cross border movement imposed in response to the coronavirus pandemic by countries in the region, have adversely affected the supply of seeds which may lead to food insecurity. Hence, the African Seed Trade Association (AFSTA) and the COMESA Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA), recommends classification of seeds as essential commodities that should be allowed unrestricted movement across the region. “If the seed movement is not normalized in the next six months, 123 million out of 650 million people in the COMESA region will face starvation,” according to a joint statement issued by the two organizations.[Africa Fertilizer Financing Mechanism: Annual Report 2019]
FAO: Global food commodity prices drop further in April. World food commodity prices declined for the third month in a row during April, as the economic and logistical impacts of the COVID-19 pandemic resulted in significant contractions in demand for many commodities. The FAO Food Price Index, which tracks international prices of the most commonly-traded food commodities, averaged 165.5 points in April, some 3.4% lower than the previous month and 3% lower than April 2019. The FAO Sugar Price Index hit a 13-year low, declining 14.6% from March, when it posted an even larger monthly drop. The FAO Cereal Price Index declined only marginally, as international prices of wheat and rice rose significantly while those of maize dropped sharply. International rice prices rose by 7.2% from March, due in large part to temporary export restrictions by Viet Nam that were subsequently repealed, while wheat prices rose by 2.5% amid reports of a quick fulfillment of the export quota from the Russian Federation. Prices of coarse grains, including maize, by contrast fell by 10%, driven down by reduced demand for its use for both animal feed and biofuel production.
FAO: Task force focusing on impacts of COVID-19 on Africa’s food security begins work. Ensuring people have access to food by keeping borders open for trade is critical during this period of COVID-19 and to achieving the Sustainable Development Goals, FAO Director-General QU Dongyu, said during the first meeting of the Task Force on the impact of COVID-19 on Food Security and Nutrition in Africa. The meeting, co-convened by Qu and Angela Thoko Didiza (Minister for Agriculture, Land Reform and Rural Development of South Africa and Chair of the African Union Specialized Technical Committee on Agriculture, Rural Development, Water and Environment), was moderated by Josefa Sacko, the AUC’s Commissioner for Rural Economy and Agriculture. The Task Force will also provide coordinated support to any new food security “hot spots” resulting from COVID-19, with particular focus on countries facing multiple threats such as the Desert Locust infestation in Eastern Africa.
See related news articles:
Selected trade data releases, trends:
China’s dollar-denominated exports unexpectedly rose in April, but imports fell the same month as movement restrictions to contain the coronavirus outbreak eased. According to data from the General Administration of Customs released on Thursday, exports rose 3.5% from a year ago while imports fell 14.2% in the same period. Economists polled by Reuters had expected exports to have fallen 15.7% in April from a year earlier while imports were expected to have fallen 11.2% from a year earlier. In March, China’s exports fell 6.6% from a year ago, while imports slipped 0.9% in the same month. China’s trade surplus for the month of April was $45.34 billion — compared to the $6.35 billion economists polled by Reuters had predicted. China reported trade surplus of $19.9 billion for the month of March.
China’s trade surplus with the United States stood at $22.87bn in April, Reuters calculation based on Chinese customs data showed on Thursday. That was much bigger than a surplus of $15.33bn in March. For the first four months of the year, China’s trade surplus with the United States totalled $63.68bn.
Australia’s trade surplus ballooned to a record in March as shipments of iron ore to China surged as the Asian giant came back from lockdown, while exports of gold more than tripled amid a global rush for the safe haven metal. There was also a rare surplus on services as the closure of international borders to contain the coronavirus forced Australians to abandon travel plans and stay home. In all, the trade surplus swelled 174% to A$10.6bn ($6.79bn) in March, easily the fattest on record and far above forecasts of A$6.8bn. The bumper haul meant the surplus for the entire first quarter climbed 41% to A$19bn, likely delivering a timely lift to economic growth just before lockdowns began in earnest. “Taking into account price effects, we now estimate that net trade provided a 0.4 ppt (percentage point) boost to GDP growth in Q1,” said Ben Udy, an economist at Capital Economics.
“Trade is still happening” – Canada’s Deputy Prime Minister. ”One of the areas where we feel that we have been more successful than people might have thought is in maintaining our trade with the United States,” said Chrystia Freeland, Deputy Prime Minister of Canada, on navigating the economic limitations of the COVID-19 era. Commenting on the need to close the Canadian-US border to limit the spread of the coronavirus, she added: “We have been able to cut down the traffic across that border by over 90% and at the same time trade is still happening – goods and services are still flowing across the border.” Freeland’s remarks came during a weekly virtual meeting of the Forum’s COVID Action Platform on 6 May. Launched last month, the Forum’s platform aims to convene leaders from governments and the business community for collective action to protect people’s livelihoods, facilitate business continuity and mobilize support for a global response to the COVID-19 pandemic.