Building capacity to help Africa trade better

tralac’s Daily News selection


tralac’s Daily News selection

tralac’s Daily News selection

Happening tomorrow:

  1. The SADC Council of Ministers meets. They will review the regional guidelines for the harmonisation and facilitation of movement of critical goods and services across the SADC region during the COVID-19 pandemic, which Council adopted on 6 April, 2020. The Ministers will also discuss the need to accelerate implementation of regional strategies and instruments aimed at responding to crises such as the COVID-19 pandemic; they include the Regional Development Fund, the Preparedness and Response and Disaster Fund, and the Regional Resilient Strategic Framework 2020-2030.

  2. South Africa’s April merchandise trade figures will be released. Business Day reports that the median forecast among economists polled by Bloomberg is of a surplus of R13bn, down from the March surplus of R24.2bn.

  3. Transport ministers from Kenya, Uganda, and Rwanda will meet to discuss the use of the Naivasha Inland Container Depot. (See more below)

A selection of perspectives on the global trading system, African development issues, COVID-19:

  1. The Africa Report: Will Kenya’s Amina Mohamed be the WTO’s first African leader? ”Despite accounting for 35% of WTO developing country membership, no African has ever led the organisation. Although Amina Mohamed’s credentials are suited for the role, the appointment is based more on international wheeling and dealing than just suitability.”

  2. Alan Wolff (WTO Deputy Director General): ”My list of the underlying values of the WTO has 16 entries. They include a number of basic principles. The first two, not obvious to all of us today, are supporting peace and stability. This was the key concern of the founders of the multilateral trading system in 1948 and the central objective of conflict-affected and fragile acceding members today. Other values, such as nondiscrimination, transparency, reciprocity, international cooperation and the rule of law are more obvious. Still others are more nuanced, less obvious perhaps, and emerge only upon reflection. They include well-being, equality, sovereignty, universality, development, market forces, convergence and morality. A recent addition to the list is sustainability. A serious discussion of WTO reform is long overdue. The pandemic simply adds to the urgency of it taking place.”

  3. George Chikoti (ACP Secretary General): ”The multilateral system is not some abstract political design, it is the extended hand of solidarity from one nation to another, and in the 21st century, never have we been more dependent on our ability to act together.”

  4. Peter Maurer (ICRC President): ”We have to see Covid-19 response as a value chain in which each and every one of us has to add something. The health system across African is still very uneven. Universal health coverage is not a reality, and let’s be frank, it will be very difficult for governments to finance in the near future, national health services that can essentially be funded just from the public purse. We need to look at intermediate steps; micro-health insurance sector working with governments could massively expand the coverage for hundreds of millions of people, to cover the major health risks. These are the things that throw people back into poverty and 40% of people who have escaped from extreme poverty actually fall back into it often because of health crisis.”

  5. Deborah Wetzel (World Bank’s Director of Regional Integration for Africa): ”The Lake Chad region remains a priority area of engagement given the common nature of the challenges faced by the sub-region and the huge potential for regional cooperation. The framework being created by both PROLAC and the MCRP AF will lay the foundation for future regional and coordinated investments that will improve access to regional markets, promote value-chains development and revive cross-border and regional trade”. [World Bank: Lake Chad Region Recovery and Development Project]

  6. Guy Ryder (ILO Director General): ”The COVID-19 economic crisis is hitting young people – especially women – harder and faster than any other group. If we do not take significant and immediate action to improve their situation, the legacy of the virus could be with us for decades. If their talent and energy is side-lined by a lack of opportunity or skills it will damage all our futures and make it much more difficult to re-build a better, post-COVID economy.”

  7. Tao Zhang (IMF’s Deputy Managing Director): ”The IMF has launched a number of initiatives to support countries’ response to COVID while continuing support to member countries as they pursue the SDGs. These include increased financial support for low-income developing countries - as of May 20, we have provided more than $16bn of SDRs via emergency financing facilities to 59 countries; bolstering support to fragile and conflict states to address their unique challenges; and enhanced policy advice and capacity building on measures to promote inclusion and sustainable macroeconomic environment.”

  8. President Cyril Ramaphosa (AU Chairperson): ”South Africa supports the call of the African Union for a debt standstill for two years. We support the allocation of more IMF Special Drawing Rights to help central banks, the corporate sector and small and medium-sized businesses to withstand the shocks caused by the pandemic. We endorse the call of Secretary-General Guterres for the development of a comprehensive debt framework. This should start with an across-the-board debt standstill for countries unable to service their debts, followed by targeted debt relief and a comprehensive approach to structural issues in the international debt architecture to prevent defaults. We further welcome the Secretary-General’s call for a global response package amounting to at least 10% of the world’s GDP. This means more than $200bn of additional support for Africa.”

  9. WTO’s Committee on Trade and Development discusses impact of COVID-19 on developing economies’ participation in world trade. The plight of African countries was stressed, as many depend on importing medical products. The continent is also affected by shrinking demand for its exports from both developed and developing countries. This is having a particularly negative impact on its agricultural sector and its participation in supply chains. Some delegations called on members to ensure that policy measures taken in response to the COVID-19 pandemic do not affect Africa more than necessary and said they should be transparent, proportionate, temporary and non-discriminatory. They also highlighted the benefits of regional integration through the African Continental Free Trade Area.

Multi-country statement circulating at the WTO: pdf The importance of MSMEs in the time of COVID-19 (66 KB) . We note the significant negative impact that the COVID-19 pandemic has had on our citizens and our businesses, in particular on those that operate as Micro, Small and Medium-sized Enterprises in economies at all levels of development. We recognize that addressing this global health crisis and economic shock requires a coordinated global response to stabilize our economies and to help MSMEs affected during this challenging period.

  • We will continue careful monitoring of all MSME-related developments. We will take further action where necessary to help MSMEs’ involvement in international trade and promote that supply chains remain open and connected. In cooperation with other international organizations and stakeholders, we will look to explore solutions and share good practices to facilitate trade, accelerate efforts towards trade digitalization, including access to digital tools, as well as improve MSMEs’ access to trade finance and to trade-related information through online platforms.

  • We reaffirm our support for the central role of the WTO in international trade. We will continue to work together to deliver a free, fair, predictable, and stable trade environment and to keep our markets open with a view to support the global recovery. We invite the WTO Secretariat to continue working closely with other international organizations to facilitate MSMEs’ participation in international trade.

  • It is clear that timely and accurate information on COVID-related trade measures reduces uncertainty and allows MSMEs to make informed decisions. We therefore encourage Members to continue informing and updating the WTO, as soon as practicable, of any trade-related COVID-19 measures they implement in order to ensure transparency and predictability.

  • We will continue our efforts to deepen and multilateralize MSME conversations at the WTO, for the benefit of our MSMEs and our economies. We will work together to help MSMEs overcome this crisis, and build resilience to future shocks.

South African notification under article 12.1(a) of the WTO’s Agreement on Safeguards. The application was lodged by South African Iron and Steel Institute on behalf of the South African Fasteners Manufacturers’ Association and its members producing the subject products. The claim is that the subject product is being imported into the SACU market in such increasing quantities in absolute terms and relative to SACU production and under such conditions, to be causing serious injury to the SACU industry.

  • Prima facie information on which the investigation was initiated: The Commission found that the applicant submitted prima facie information to indicate that volumes of bolts with hexagon heads of iron or steel increased both in absolute terms and relative to domestic production in the 2017/18 (1 July 2016 to 30 June 2019) period.

  • The Applicant submitted that a confluence of events forms the basis of the unforeseen development that supports this application. This confluence of events is led notably by China which is the biggest producer of global fasteners, accounting for more than 50% of global fasteners capacity and output. The Applicant stated that during the Uruguay Round of negotiations, South Africa did not foresee the following events:

Collen Dlamini: We dodged one bullet – we needn’t play American roulette (Daily Maverick)

In April, the Office of the United States Trade Representative released its Special 301 Report watchlist, “an annual review of the state of IP protection and enforcement in US trading partners around the world”. South Africa was not included on the watchlist. There are several ways to interpret South Africa’s omission from the watchlist. In her Maverick Citizen piece last week, Linda Daniels chose to interpret the omission as a free pass on the bill. Daniels seems to suggest that South Africa’s omission from the watch list means that the threat posed by the Copyright Bill to SA’s exports has been neutralised. Another implication of her piece is that the response of the United States to the bill is not motivated by any real inadequacies of the bill, but rather a malicious plot to thwart the bill and punish South Africa. However, her analysis is flawed on both counts. There are significant constitutional flaws in the bill, and the threat the bill poses to the economy is very real too. [The author is the chairperson of the Copyright Coalition of SA]

Uganda reluctant to use Naivasha as key transit cargo depot (The Star)

Uganda is unwilling to use the Naivasha Inland Container Depot as its key transit cargo handling facility despite Kenya’s push to relocate operations from Mombasa and Nairobi. But according to Uganda’s Minister of Works and Transport Edward Katumba-Wamala, the use of the Naivasha ICD for transit cargo would not reduce traffic, as truck drivers will still be required to pick containers from Naivasha to their destination. “Therefore, it is our considered opinion that the use of Naivasha ICD which is part of our long term regional infrastructure development should remain optional,” Katumba says in a letter to Macharia. He says if Kenya makes it more attractive, big industry players and shippers such as Bollore Logistics , Mukwano Group of Companies and others “can be encouraged to start using this facility because of economies of scale.”

EAC Secretariat cautions on likely impact of above normal rains, June-September 2020

According to the Greater Horn of Africa Climate Outlook Forum Statement, parts of South Sudan, Western Kenya, Uganda, Northern Tanzania and Rwanda are expected to receive above normal rainfall between June and September 2020, while the rest of the EAC Region is expected to experience the normal dry season. “It is against the backdrop of the ongoing COVID-19 pandemic, the heavy floods that have caused havoc in parts of the region and the second wave of desert locust invasion, the EAC Secretariat urges the Partner States to take appropriate measures to ward off further threats to our people” says the EAC Deputy Secretary General in charge of Productive and Social Sectors, Mr Christophe Bazivamo. The Senior Meteorology Officer at the EAC Secretariat, James Kivuva, warns that “a warmer than usual season is expected in the coastal parts of the region from Kenya to Tanzania and beyond, Burundi, Rwanda, and western South Sudan, but it will be colder than usual in the central parts of Tanzania and Kenya, the eastern parts of Uganda and South Sudan and around the Lake Victoria basin”.

Kenya’s horticulture sector: extract from CBK’s MPC statement (pdf, CBK)

Horticultural exports are normalising as the volume increased by 6.9% in April 2020 compared to April 2019. Further, these exports in the first half of May 2020 were 63% of exports in the entire month of May 2019. The volume of flower exports was lower by 36.5% in April 2020 compared to April 2019, but higher prices moderated the impact of the lower volumes. The sector will continue to benefit from the recent cessation of restrictions in key destination markets and increased cargo capacity. [Flower exports rise as EU markets ease lockdown; Kenya’s first quarter tea exports: prices decline on Corona woes]

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