News

tralac’s Daily News selection

tralac’s Daily News selection

15 May 2020

Updates on the closure of the Nakonde border post, COVID-19 testing for truck drivers

  1. Zambia reopens border with Tanzania to cargo after COVID-19 closure. ”Trucks from both sides have been moving, starting with those destined for Tanzania,” Malozo Sichone, the minister of Zambia’s Muchinga province, said in response to a request for comment. A mining industry executive said the border had opened for copper exports from noon on Friday. A logistics official said: “We have trucks that have already crossed.”

  2. Truck drivers will now undergo mandatory Covid-19 tests before they leave the country, The Citizen has learnt. The decision was reached during a meeting that brought together transport operators and officials from the Health ministry. The Tanzania Association of Transporters and Tanzania Truck Owners Association have confirmed the development. “It is true. Beginning on May 18, truck drivers will be tested before picking up cargo from Dar es Salaam port. They will then be issued with a 14-day clearance certificate,” the TAT chief operations officer, Mr Hussein Wandwi, told The Citizen yesterday.

  3. Foreign Affairs Ministers of Rwanda and Tanzania will today (Friday) hold discussions on the way forward in regard to cross border movement of freight trucks. The development was confirmed by foreign minister and Government Spokesperson Vincent Biruta in a news conference on Friday morning. Currently, over 1000 trucks destined for Rwanda are stuck in the Tanzanian border town of Benako, after some Tanzanian truck drivers protested the requirements by Rwanda to adopt a relay system handing over their trucks to Rwandan drivers.

Updates on African debt relief issues

  1. Kenya eschews G20 debt relief initiative over restrictive terms. Kenya will not seek a suspension of debt payments under a G20 initiative aimed at helping poor countries weather the COVID-19 pandemic, its finance minister said on Friday, saying the terms of the deal were too restrictive. Minister Ukur Yatani told Reuters in an interview he was also concerned about the impact that debt relief might have on Kenya’s credit rating. But Yatani said he was concerned that terms of the deal limiting countries’ access to international capital markets during the standstill could hinder Kenya’s ability to finance its deficit later in the year. “We fear we might unnecessarily create a crisis,” he said.

  2. Private creditors establish the Africa Private Creditor Working Group. The Africa Private Creditor Working Group is an initiative to represent the views of international private creditors invested in Africa and to work with countries on their financing needs during the COVID-19 crisis. The AfricaPCWG will provide African Governments, the UNECA, the G20, the IMF and other Multilateral Development Banks a forum through which all stakeholders can engage transparently and constructively with different categories of private international investors in African sovereign and corporate debt to coordinate the resolution of broad issues arising due to the COVID-19 crisis. The AfricaPCWG is coordinating the views of over 25 of the world’s foremost asset managers and financial institutions providing private finance to nations and companies through Eurobonds, syndicated loans, trade finance and other credit structures across the continent of Africa. These investors bring significant expertise and experience in Africa and other Emerging Markets, and represent total assets under management in excess of $9 trillion. Participants in the AfricaPCWG forum have already established a number of core principles of engagement. Upmost amongst these is the belief that a one-size-fits-all solution will be counter-productive for the nations and people of Africa.

COMESA ministers approve harmonized regional trade facilitation guidelines. COMESA will develop an online platform for exchanging information on availability of essential products within the COMESA Member States as part of the response measures to the COVID-19 pandemic. This was among key decisions made by the extra-ordinary meeting of the COMESA Council of Ministers on Thursday. The virtual meeting was convened to approve a harmonized set of regional guidelines developed to facilitate movement of goods and services across the region during the COVID-19 pandemic. It was led by the Minister of Industry and Commerce of Madagascar, Hon Madame Lantosoa Rakotomalala, who is the chairperson of the Council. The new guidelines provide common measures and practices to be applied across the 21 COMESA countries. In developing the guidelines, reference was made to those of the those of the EAC, SADC and the AU to ensure a seamless application of trade facilitation measures in the region.

An interview with AfCFTA Secretariat Secretary General Wamkele Mene: Implementing the AfCFTA is the best stimulus for post-COVID-19 economies (Africa Renewal)

Q: Given the current situation, any idea when free trading can begin? A: We have recommended to the AU Assembly of Heads of State, which is the body with the authority to delay the trading date, that given the current public health crisis and the need for some technical work to be concluded, that we cannot meaningfully trade [under AfCFTA] on 1 July.

Q: Does this mean free trading will not begin until the pandemic is defeated? A: We are exploring other ways of continuing our technical work if the pandemic continues. Trade negotiations are very technical. We negotiate in four languages (English, French, Arabic, Portuguese). We must make provision for the different time zones in Africa. And there are requirements for confidentiality. All these have to be taken into account before we can continue the negotiations, if at all we are able to continue the negotiations on virtual platforms. We would like to resume our work as soon as the pandemic is contained. But if for whatever reason, the pandemic continues, which we hope it will not, we are exploring other ways of advancing our negotiations.

Q: Do you discourage countries from entering into bilateral trade agreements? A: Under the agreement, countries can enter into agreements with third parties provided they give African countries similar or better treatment than they are giving to the third party. So, in terms of AfCFTA law, it is allowed. But as a political objective of integrating and consolidating our market first, it is obviously desirable that countries desist from doing so.

pdf G20 Trade and Investment Ministerial Meeting: statement (131 KB)

We will continue monitoring the situation closely, assessing the impact of the pandemic on trade, and convene again as necessary. We task the G20 Trade and Investment Work Group to continue paying the highest attention to these actions and to provide status updates on the implementation of the agreed actions.

Trade facilitation (extracts):

  • Speed up and streamline customs procedures, in line with the WTO Trade Facilitation Agreement and encourage the use of electronic documentation and processes, where possible and practical, including use of smart applications

  • Reduce sanitary and technical barriers by encouraging greater use of relevant existing international standards and ensuring access of information on relevant standards is not a barrier to enabling production of PPE and medical supplies

  • Share necessary information within the G20 regarding medical suppliers, as appropriate and according with applicable national legislation, so as to facilitate trade deals

  • Encourage G20 Digital Ministers to promote the application of online services and e-commerce, in accordance with national laws and regulations, to facilitate the flow of essential goods and services during the pandemic

  • Encourage our Governments to facilitate the resumption of essential crossborder travel, in accordance with national laws and regulations, while safeguarding public health in line with our efforts to combat the pandemic as well as to minimize the socio-economic impacts of COVID-19

Support for micro, small, and medium-sized enterprises:

  • Call for international organizations to prepare in-depth reports, within their mandates, on the disruption of global value chains caused by the pandemic on MSMEs

  • Encourage enhancement of communication channels and networks for MSMEs, including through deepened collaboration with the private sector

Joint statement on micro, small, and medium-sized enterprises: history and latest developments in the Informal Working Group (IISD)

The past four years have seen the subject of micro, small, and medium-sized enterprises grow in profile at the WTO, where a group of its members has been examining what challenges these smaller companies face when engaging in world trade and how these can be alleviated. Heading into the WTO’s Twelfth Ministerial Conference (MC12), an informal working group of over 90 WTO Members dedicated to the issue has been working toward advancing a series of “outcomes” that could be presented at the event, along with pushing to formalize their work at the institution.

These discussions are unusual among WTO Members in that they focus on different categories of businesses, trying to unpack in detail how existing trade policy and practice may have varying effects depending on business size, especially relative to larger actors. A similar effort is underway by various WTO Members and Observers to consider how trade policy and practice affect women differently than men across multiple issue areas. Neither the discussion on MSMEs nor on gender is aiming to negotiate new rules, which is another notable difference in approach from current practice at the WTO. At the time of this writing, the Informal Working Group on MSMEs was still discussing what outcomes they could present for MC12, what form these might take, and whether they will obtain the necessary support ahead of the ministerial to present them as consensus documents.

The brief (pdf) was written primarily for trade negotiators in Geneva and in world capitals, regardless of whether their governments are involved in these MSME discussions. It also briefly considers related developments in regional trade agreements (RTAs) and in non-negotiating international forums that have taken place over the past 15 years, as well as the gender and social inclusion elements that have been raised in MSME-related trade discussions. [WTO: pdf Statement on highlighting the importance of MSMEs in the time of COVID-19 (54 KB) ]

Electronic World Trade Platform Rwanda: rekindling sales for African businesses during COVID-19 (UNECA)

Ms Vera Songwe, Executive Secretary of the Economic Commission for Africa: “COVID-19 is particularly endangering global trade. That is why I am very happy to be part of this Electronic World Trading Platform (eWTP) initiative with the Alibaba business group. Africa, which has already been trading with China, can improve trading at this time based on a number of goods on which it possesses comparative advantage.”Rwanda is already trading its Rwandan chili and Coffee. We hope that with the eWTP, we can put more goods from the continent notably, coffee from Ethiopia, Shear Butter from Mali, white pepper from Cameroon, Vanilla from the Comoros Islands and Saffron from Madagascar, among others, on the platform.”.

Mr Eric Jing, Alibaba Group Director and Executive Chairman of Ant Group: “We want to support SMEs worldwide to recover from the outbreak, resume production and secure orders in their times of need. Through today’s livestream, we look forward to reopening global trade, starting with helping businesses reopen.” First proposed by Alibaba Group founder Jack Ma in 2016, the eWTP has been recognized by the G20 and launched in China, Malaysia, Belgium, Rwanda and Ethiopia. It is a private sector-led, multi-stakeholder initiative offering SMEs easier access to new markets via simple and straightforward regulations. It also offers training and support in areas such as e-commerce, logistics, financing, cloud computing and mobile payments.

pdf Recommendations to leverage e-commerce during the COVID-19 crisis (285 KB) (World Bank)

Public policy can only play an enabling role, tackling market failures and creating an environment in which digital entrepreneurship can thrive. This guidance note highlights 13 key measures that governments can take in the short term to support e-commerce during the ongoing crisis. The first group of measures aims to help more businesses and households to connect to the digital economy during the crisis. The second group of measures aims to ensure that e-commerce can continue to serve the public in a way that is safe, even during the COVID-19 lockdown. The third group of measures aims to ensure that the government’s e-commerce strategy during the crisis is clearly communicated, implemented, and coordinated with other policy measures.

Trade in COVID-19-related medical goods: Issues and challenges for Commonwealth countries (Commonwealth Secretariat)

Overall, there is very low intra-Commonwealth trade in COVID-19-related products (Table A2). However, the pattern is somewhat more promising at the regional level, where there is higher dependence on Commonwealth suppliers in Africa (India, South Africa) and the Pacific (Australia, India, New Zealand). For Commonwealth Africa, India is the leading supplier of COVID-related goods (27%), which is almost three times more than France and Germany. There is some intra-African trade in these products as well, with South Africa providing more than 7% of the region’s overall imports of COVID-19-related goods and a large share of protective gear. The supply of ventilators is more diverse: two EU member countries – Germany and the Netherlands – contribute more than a quarter of imports, whereas the USA and China account for 21% and 14%, respectively. India provides around one third of the region’s PPE imports.

The tariff profile of Commonwealth members prior to the outbreak of the pandemic shows that developing country members levied higher import taxes on future COVID-19 goods compared with the world average (10.7% and 9.2%, respectively) (Figure 5). By comparison, the developed economy members had low tariffs – 3.5%. Some of the medical goods deemed essential for containing the spread of the virus have tariff peaks of more than 10% in Commonwealth developing countries. These include hand soap (17), disinfectants (12.9%) and PPE (around 14%). However, these averages mask wide variations and significant tariff peaks in some member countries, especially LDCs (Box 4). Overall, WTO data suggests most Commonwealth developing countries have retained their existing tariff regime for tackling the pandemic, with only a handful of countries easing import barriers on a temporary basis. By comparison, most developed economy members have further reduced the incidence of tariff protection on COVID-19 goods, which, as demonstrated, is already low. [The authors: Brendan Vickers, Salamat Ali, Collin Zhuawu]

African Energy Ministers agree on common strategy for COVID-19 response and recovery (AU)

The Bureau adopted a declaration calling for various measures to provide energy for critical health facilities and front line services in response to the COVID-19 pandemic. The Declaration expresses the Member States’ commitment to work together to ensure a coordinated continental response to the pandemic and joint strategy for recovery after the crisis. Recognising the critical role of power utilities, the Declaration called on Member States to support them to cope with low demand and reduction in revenues while continuing their mandate of providing electricity services. It further called for the promotion of clean cooking technologies to reduce incidences of indoor air pollution which is responsible for respiratory diseases that could aggravate the impact of COVID-19 in case of infection. The Bureau called for support for energy for water pumping and setting up of potable water stations to promote hygiene measures instituted to fight the spread of the coronavirus.