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tralac’s Daily News selection

tralac’s Daily News selection

01 Jun 2020

Diarise:

The OACPS hosts (3 June) first-ever Inter-Sessional Summit on the theme: Transcending the COVID-19 pandemic. It will be chaired by Kenya’s President Uhuru Kenyatta.

ecomConnect Day (4 June): e-commerce, economic recovery and AfCFTA. The programme and registration details can be accessed here.

EAC Ministers/Cabinet Secretaries of Health, Transport and EAC Affairs: EAC partner states adopt the EAC regional electronic cargo and drivers tracking system

The system is expected to share truck driver’s information leveraging on that which is managed and operated by revenue authorities in the region, and the existing health information systems in partner states. The system allows the users to share information across borders in a transparent manner, and the truck drivers will need to upload the phone app on their phones. Continuous screening will be done at selected check points along the transport corridors, which have already been designated, and information made available for all partner states. Verification of documents will be done by customs, immigration, law enforcement agencies/persons who will confirm if a particular traveller is fit to proceed on their journey. The Digital surveillance tracker will interface and connect directly to designated laboratories in the Partner States to allow the Partner States, for purposes of COVID-19 laboratory results needed to generate the COVID-19 Test Certificates / attestation Certificates for COVID-19 test results.

pdf SADC Council of Ministers: meeting outcomes (311 KB)

Council noted that while the regional Guidelines on Harmonization and Facilitation of Movement of Essential Goods and Services across the SADC Region which were adopted on 6 April, 2020, have played a critical role in facilitating movement of goods, there are challenges which require urgent attention. In this regard, Council directed the expanded Technical Committee on Health to review the Guidelines by the 6th of June 2020 and report to Council. Recognizing the urgent need to cooperate with other RECs and the AU, Council directed the Secretariat coordinate with COMESA, and the EAC in the context of the Tripartite arrangement, and the AU at Continental level, to align and harmonize measures and regulations.

Council received the preliminary report on the socio-economic impact of COVID-19 and its implications on the SADC region and noted that the pandemic will have short, medium and long-term negative impact on all social and economic sectors, given its cross-cutting nature. The report also indicated that the global economic activity is projected to contract against a background of declining commodity prices and rising debt, and that subsequently, SADC economies are projected to contract by 3% in 2020, reversing the gains made in the past years on industrial development and trade. The report further highlighted that increased expenditures in response to the COVID-19 pandemic will affect the fiscal positions for SADC Member States and subsequently, most Member States will not be able to meet the SADC Macroeconomic Convergence programme targets of 3-7% inflation range; fiscal deficit of 3% of GDP; public debt of not exceeding 60% of GDP; and GDP growth of at least 7%.

In line with the Preliminary Report on the socio-economic impact of COVID-19’s findings, Council urged Member States to implement the recommendations outlined in the report.

South Africa’s April 2020 merchandise trade statistics: a deficit of R35.02bn (SARS)

The R35.02bn trade deficit for April 2020 is attributable to exports of R53.01bn and imports of R88.03bn. Exports decreased from March 2020 to April 2020 by R65.06n (55.1%) and imports decreased from March 2020 to April 2020 by R6.11bn (6.5%). Exports for the year-to-date (1 January to 30 April 2020) decreased by 3.5% from R394.72bn in 2019 to R381.08bn in 2020. Imports for the year-to-date (pdf) of R381.41bn are 5.5% less than the R403.58bn imports recorded during the same period in 2019. The cumulative trade deficit for 2020 is R0.33bn. [Bank of Uganda: Exports, imports fall - BoU]

US-Kenya trade agreement negotiations: USTR posts a summary of specific negotiating objectives

Our vision is to conclude an agreement with Kenya that can serve as a model for additional agreements in Africa, leading to a network of agreements that contribute to Africa’s regional integration objectives. In addition, our goal is to conclude an agreement that builds on the objectives of AGOA and will serve as an enduring foundation to expand US-Africa trade and investment across the continent. We seek to support higher-paying jobs in the United States and grow the U.S. economy by improving U.S. opportunities for trade and investment with Kenya. The current health crisis and economic challenges posed by COVID-19 underscore our desire to strengthen our economic relationship with Kenya and lay the foundations for stronger, more resilient economies to address the current and future health crises. Our specific objectives for this negotiation will comply with the specific objectives set forth by Congress in section 102 of the Trade Priorities and Accountability Act. In doing so, we aim to address both tariff and non-tariff barriers and to achieve fairer, more balanced trade. Extracts from the 19 page document:

On technical barriers to trade:

  • Require application of decisions and recommendations adopted by the WTO TBT Committee that apply to standards, conformity assessment, transparency, and other areas.

  • Include strong provisions on transparency and public consultation that require the publication of drafts of standards, technical regulations and conformity assessment procedures, allow stakeholders in other countries to provide comments on those drafts, and require authorities to address significant issues raised by stakeholders and explain how the final measure achieves the stated objectives.

  • Ensure national treatment of conformity assessment bodies without conditions or limitations and encourage the use of international conformity assessment systems, including mutual recognition arrangements.

  • Obtain commitments that Kenya will not foreclose export opportunities to the United States with respect to third-country export markets, including by requiring third countries to withdraw or limit the use of any relevant standard, guide, or recommendation developed in accordance with the TBT Committee Decision.

  • Establish an active TBT Chapter Committee that will discuss bilateral and third-party specific trade concerns, coordination of regional and multilateral activities, regulatory cooperation, and implementing good regulatory practices.

On trade remedies:

  • Preserve the ability of the United States to enforce rigorously its trade laws, including the antidumping (AD), countervailing duty (CVD), and safeguard laws.

  • Facilitate the ability to impose measures based on market distortions due to ongoing subsidization or dumping.

  • Promote cooperation between trade remedies administrators, particularly with regard to the sharing of information that would improve the ability of administrators to effectively monitor and address trade remedies violations.

  • Strengthen existing procedures and create new procedures to address AD/CVD duty evasion, including the ability to conduct AD/CVD duty evasion verification visits.

  • Establish transparency and due process obligations reflected in U.S. AD/CVD laws, regulations, and practice.

On labor:

  • Require Kenya to adopt and maintain in its laws and practices the internationally recognized core labor standards as recognized in the ILO Declaration, including:

  • Freedom of association and the effective recognition of the right to collective bargaining;

  • Elimination of all forms of forced or compulsory labor;

  • Effective abolition of child labor and a prohibition on the worst forms of child labor; and

  • Elimination of discrimination in respect of employment and occupation.

  • Require Kenya to have laws governing acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.

  • Establish rules that will ensure that Kenya does not waive or derogate from labor laws implementing internationally recognized core labor standards in a manner affecting trade or investment between the Parties.

  • Require Kenya to prohibit the importation of goods produced by forced labor, regardless of the source country.

As a part of the process of formulating these objectives, on March 23, 2020, the Office of the USTR solicited public comments by Federal Register notice regarding objectives and positions for a U.S.-Kenya trade agreement and received over 5,000 submissions.

pdf United States-Kenya Negotiations: Summary of Specific Negotiating Objectives - May 2020 (852 KB)


Commodity exports to China could fall by $33.1bn in 2020, UNCTAD study finds

Global exports of commodities to China could plunge by $15.5bn to $33.1bn in 2020 – a drop of up to 46% compared with annual growth projections before the coronavirus pandemic hit, according to new UNCTAD research. The findings raise concerns for economies that rely on exports of primary goods, such as energy products, ores and grains. Some two-thirds of developing countries are commodity dependent according to UNCTAD data. For commodity-dependent developing countries, some of the most vulnerable on the planet, the drop is projected to be between $2.9bn and $7.9bn, which would constitute a 9% loss in terms of annual growth rate. Because China absorbs about one-fifth of world commodities’ exports, such a drop in its imports would have a dramatic impact on producers of primary goods. “Assessing the impact in China says a lot about possible general tendencies,” says Marco Fugazza, an UNCTAD economist who conducted the study. There have been few assessments done so far at a relatively disaggregated product level using up-to-date information,” he says, adding that UNCTAD awaits similar statistics from other big markets, such as the European Union, to expand the analysis. Extract (pdf):

As shown in column 1 of Table 1, commodities represent close to one fourth of China’s imports. Column two indicates that Commodity Dependent Developing Countries (CDDCs) account for 65% of these commodities exports. One fifth of world commodities exports are shipped to China as shown in column 3. The last column reports that one fourth of exports of commodities from CDDCs go to China. As a matter of comparison, Table 1 contains the same information for both the United States of America and the European Union. While the European Union absorbs about one fifth of world exports of the commodities considered here, the corresponding share of the United States of America is less than 9%. The incidence of imports from CDDCs is slightly larger for the European Union than for China. However, the corresponding figure for the United States of America is about 41%. Column 3 of Table 1 further indicates that imports of the European Union capture about 18% of total exports and those of the United States of America 9%. We also have that 23% of CDDCs exports are directed towards the European Union and about 7% towards the United States. Table 2 reports a series of figures illustrating further the increasing relative importance of the Chinese market for CDDCs exports. In 2018, 80 CDDCs exported at least one of the commodities listed in table 3. About one third of them directed one third or more of their exports towards the Chinese market. The corresponding figures for the European Union and the United States of America were 18% and about 7% respectively.

Textile and garment supply chains in times of COVID-19: challenges for developing countries. Given its non-essential nature, the fashion industry faces significant risks. Indeed, in times of COVID-19, as consumers around the world remain in lockdown, they no longer need new products. This industry is characterised by a highly integrated global supply chain. In it, many developing countries play the role of the supplier of low-cost inputs. This article highlights some of challenges and concerns that some of these countries face, many of which are dependent on textile and garment exports.

The impact of COVID-19 on the African oil sector: a special report by AFREC on the implications on African countries

For African crude oil exporting countries, the expected fall in demand means that exports of crude oil in 2020 will be down by at least 10% on average compared to recent years. Prices are also expected to fall. At $40/barrel or lower, the value of African oil exports could fall to levels last seen 20 years ago. These lower prices coupled with reduced output could see Africa’s larger oil producers facing $20bn or more of lost oil value in 2020. For consuming countries, the low per capita consumption of oil for transportation in many African countries will not significantly gain from lower prices which limited by low demand and a very likely limitation on storage. This report (pdf) looks at the impact of the COVID-19 pandemic on production, revenue and demand across Africa. It does so by first examining the sector in Africa, before looking at the global economic situation and the response taken across the oil sector. It then considers the impact for Africa as a whole and for specific regions and example countries. It concludes with some possible opportunities as well as some challenges for the future.


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