News
tralac’s Daily News selection: 7 October 2015
The selection: Wednesday, 7 October
The TPP deal gets done: what does it mean for developing countries? (CGD)
From information available so far, it looks like there were improvements in some areas of interest for developing countries. But I still have concerns in the three areas I wrote about in July. I’ll need to see the details before I can assess the outcomes there. And my biggest concern about the TPP, TTIP, and other regional agreements remains how they affect the World Trade Organization. Most developing countries are outside these big trade deals and will have no way to protect themselves in trade if the multilateral system fades into irrelevance.
Finally, how will the deal impact the multilateral system? Will a successful TPP negotiation spur countries on the outside to increase their efforts to bring things back to the WTO? Or will it encourage US negotiators to turn away from the WTO and focus on the Transatlantic Trade and Investment Partnership? We should get an indication of that when WTO ministers meet in Nairobi in December and, unfortunately, I’m not optimistic. [The author: Kimberly Elliott]
Sean Doherty: 'Has the TPP deal finally brought trade up to date?'
G20-OECD Global Forum on International Investment: summary report
G20 urges reforms for global trade growth
The great global trade slowdown (LiveMint)
The latest trade statistics from around the world do not make for happy reading. Economists at the World Trade Organization have recently cut their forecast of global trade in 2015 by 50 basis points, to 2.8%. Trade volumes are falling in many countries such as China. The Indian trade numbers too have been weak. The immediate news on the trade front should not be a surprise for most people who follow economic trends. But there could be more structural damage as well that is not captured in the headlines. [The author, Niranjan Rajadhyaksha, is executive editor of Mint]
US trade deficit widens as exports sag, imports from China surge (Reuters)
The data released on Tuesday by the Commerce Department illustrates the U.S. economy's vulnerabilities to a strong dollar and weak demand in foreign markets, which could impose further caution on the Federal Reserve's plans to hike interest rates. The trade deficit swelled by 15.6% to $48.3bn in August, according to data that is adjusted for seasonal factors.
The world economy is awash with liquidity and the cost of debt has never been so low – still many developing countries struggle to obtain sources of international finance for long-term productive investment. UNCTAD’s Trade and Development Report, 20151 argues that dedicated government action is needed to correct this shortfall if ambitious development goals are to be achieved. This task cannot be entrusted entirely to financial markets. Instead, specialized public institutions and mechanisms designed specifically for this purpose will be crucial. [Downloads, data]
Global action plan launched against MNCs avoiding tax (OECD)
Inclusive Global Value Chains: policy options in trade and complementary areas for GVC integration by small and medium enterprises and low-income developing countries (OECD/WB)
Jobs, wages and the Latin American slowdown (World Bank)
In the report, Jobs, Wages and the Latin American Slowdown, the World Bank´s Office of the Chief Economist for Latin America and the Caribbean points out that the expectation is that the region will see 0% growth for 2015 with a slight improvement to 1% in 2016, although uncertainty around that projection is high. That would be the fifth year in a row the region has underperformed initial expectations, a sign that new factors, mainly internal, are prolonging the effects of worsening external conditions, particularly the sharp deceleration in China and fall of commodity prices.
From Cape to Cairo? The potential of the Tripartite Free Trade Area (SAIIA)
The three main countries involved in this project – Egypt, Kenya and South Africa – have a considerable regional trade complementarity. The de facto regional trade of these three countries is also high but concentrated in sub-regions of the TFTA. The regional trade complementarity of Ethiopia, another potentially major player, is much lower, as is its regional trade intensity. The authors moreover analyse similarity in regional exports to shed light on the competition that markets face and resulting disincentives for the TFTA. [The authors: Sören Scholvin, Jöran Wrana]
South African trade policy: key cabinet decisions (GCIS)
Cabinet approved the Guidelines of Good Business Practice for South African Companies Operating in Africa. These guidelines are a voluntary set of principles consistent with laws and internationally recognized standards that promote responsible business conduct on the African continent. They provide a guiding framework for South African companies to promote sustainable economic development in Africa. They also encourage South African companies to align their involvement and practices with government’s integration and development objectives in Africa and to build mutual confidence, trust and benefit for the companies and the societies in which they operate.
Cabinet approved the ratification of the Annex on the Institutionalization of the Southern African Customs Union Summit. The summit, which comprises Heads of State or Government of each member state, will provide political and strategic direction to SACU. All SACU member states need to sign the agreement so that the summit can become the highest decision making institution of the SACU. [Background: tralac's SACU Roundtable]
Resolve disputes - Mwanakatwe tells SA (ZNBC)
Commerce Minister Margaret Mwanakatwe is optimistic that Zambia and South Africa will resolve disputes regarding the export of organic products into South Africa. Mrs Mwanakatwe says this will mitigate trade imbalances between the two countries. Mrs Mwanakatwe says the move will allow the Zambian honey to easily penetrate the South African market.The Minister was speaking when she opened the 2015 Zambia-South Africa Trade and Investment Forum in Lusaka.
Security bill spat: SA-US relations at risk (IOL)
South Africa is in danger of being sidelined for project funding by the International Monetary Fund and the World Bank as the US lobbies to scrap the controversial Private Security Industry Regulation Amendment Bill. Yesterday, the US trade mission threatened to withdraw its support for South Africa’s funding applications for infrastructure development projects if certain clauses in the bill were not reviewed, and once more placed the Africa Growth and Opportunity Act on the back foot. Heidi Ramsay, the deputy spokeswoman for the US embassy in Pretoria, said the US’s concerns were that the requirement would force US security firms to sell off their ownership at what would likely end up being fire-sale prices, which could effectively result in an uncompensated expropriation. [Security law to cost SA R133bn (Business Report)]
Botswana moves to eliminate trade barriers (Mmegi)
Local exporters and importers now have a ‘one-stop shop’ where they can receive crucial information on laws, regulations and quality standard requirements for conducting cross-border trade. Through a National Enquiry Point, which was launched in Gaborone this week, the Botswana Bureau of Standards will offer the services. The NEP is a requirement of the WTO under the Technical Barriers to Trade agreement.
Services sector anchors Botswana's 2nd quarter economic growth (Mmegi)
Uganda: Substandard imports decrease by 30% - government (Daily Monitor)
Substandard and counterfeit imports have reduced by 30% over the last two years, the minister of Trade has disclosed. According to Ms Amelia Kyambadde, the reduction is as a result of the enforcement of a government policy subjecting sensitive imports to quality test before being shipped here. Speaking last week at the 6th annual Ministry of Trade Sector Review Conference, Ms Kyambadde said the reduction that the sector has seen since 2013, also tells a story of what a stronger resolve can yield. In the sector review meeting, the executive director of Uganda National Bureau of Standards, Mr Ben Manyindo, said by close of the year, substandard and counterfeit imports would have reduced by 50%. And by end of 2016 it would have gone down by 65%.
Kenya: Current account deficit hits Sh151bn on imports surge (Business Daily)
The gap between Kenya’s imports and exports widened by 62% in the second quarter of the year, contributing to the pressure on the local currency. The country’s exports value slumped to Sh133.5 billion between April and June from Sh141 billion for the same period last year while imports grew to Sh379.9 billion from Sh371.5 billion, KNBS data shows. The expanded import bill and reduced exports pushed Kenya’s balance of trade to a deficit of Sh246.3 billion compared to a Sh230.5 billion deficit reported in the second quarter last year. However, the current account deficit was kept low because of the positive balance on the services account and remittances.
Dar-Kenya trade scales EA high (Daily News)
Trade between Kenya and Tanzania has continued to grow, accounting for 80 to 90 per cent of trade in the East African Community, President Jakaya Kikwete has said. Addressing the Kenya’s National Assembly in the capital, Nairobi, President Kikwete said the growth in trade between the two countries demonstrated how much the two countries’ contribution is critical to the greater EAC integration agenda.
Kenya-Tanzania Business Forum: Uhuru Kenyatta's speech (Business Daily)
France’s milk firm eyes East Africa (Daily Nation)
Improve ease of doing business in Tanzania (The Citizen)
EALA plenary commences in Nairobi, Pan-African Parliament: opening of the 1st Ordinary Session
Women traders in Africa’s Great Lakes (World Bank Blogs)
The Great Lakes Trade Facilitation Project (GLTFP) is groundbreaking in many ways: it is the first large-scale World Bank operation focusing on small-scale trade in a conflict area; it moves beyond a traditional focus on trade in goods, also targeting cross-border trade in services; and it is a collaborative effort across WBG’s Global Practices, including the Trade & Competitiveness and the Governance GP, designed with critical support from the Fragility, Conflict and Violence Group. [The authors: Cecile Fruman, Carmine Soprano]
Serial offenders - industries prone to endemic collusion: contributions from South Africa, Brazil (OECD)
State-business relations as drivers of economic performance (UNU-WIDER)
The empirical study of state-business relations in developing countries has emerged only recently, with notable contributions starting in the mid-1990s, developing further in the 2000s and gaining more general acceptance in the 2010s. The evidence suggests that effective SBRs can matter for economic performance. The case studies suggest that SBRs can be effective (Mauritius) but also ineffective (Malawi). [The authors: Alberto Lemma, Dirk Willem te Velde]
International agencies and experts meet to update classification of non-tariff measures (UNCTAD)
Leading organizations and experts in trade and non-tariff measures (NTMs) met in Geneva on 28-29 September, to plan an update to the International Classification of NTMs - policy measures other than ordinary customs tariffs that nevertheless restrict free trade. The following objectives were achieved:
Towards a new partnership between the EU and the ACP countries after 2020: public consultation
It is important to take stock of the current Partnership Agreement, to explore the extent to which it remains valid for the future and offers a platform to advance joint interests. A thorough review is needed of the assumptions, on which the partnership is based, of its scope, instruments and ways of working. The outcomes will form a major component of the analysis and as such contribute to set out policy proposals for the future relationship. Reference documents:
Zambia constitutes team to tackle job losses in mining industry (Coastweek)
South Africa: State of Renewable Energy report (GCIS)
WTO agrees membership terms for Liberia
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
