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4th WTO Trade Policy Review of SACU: Opening statement by South Africa
Opening statement by Ms. Niki Kruger (South Africa), Spokesperson on behalf of the Southern African Customs Union (SACU) on the occasion of the 4th WTO Trade Policy Review of SACU
It is an honour and privilege for me to deliver this statement on behalf of the Southern African Customs Union (SACU) consisting of following Member States:
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The Republic of Botswana
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The Kingdom of Lesotho
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The Republic of Namibia
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The Republic of South Africa; and
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The Kingdom of Swaziland
At the onset, I wish to welcome all present here this week for the 4th Trade Policy Review of the Southern African Customs Union Member States. I further wish to thank the Chairperson, Ambassador Atanas Atanassov Paparizov for his Opening Remarks and I wish to recognise Ambassador Alberto Pedro D’Alotto, for agreeing to be the discussant for this 4th WTO Trade Policy Review of SACU.
I wish to also extend our gratitude to the WTO Secretariat for their assistance in preparing their Reports, as well as our Member States and our own SACU Secretariat for their work in preparing the Government Reports and coordination of inputs and responses to questions from WTO Members. I also wish to thank all WTO Members that shown an interest in this Review and for the questions posed to us in advance. We have endeavoured to answer all of these as per the timeframes in the procedural guidelines.
SACU Member States are now undertaking its 4th Trade Policy Review, once again, as a Customs Union. We are of the view that the transparency exercise that the trade policy review promotes is of great value to all of us. We therefore re-affirm our commitment to submitting our trading regimes for review within the context of our obligations under the WTO. This commitment is consistent with the objectives of the Trade Policy Review Mechanism (TPRM) as provided for in Annex 3 of the Legal Texts of the WTO Agreements.
I wish to remind Members that the Southern African Customs Union dates back to 1910, making it the oldest Customs Union in the world. Following the attainment of independence by the British Overseas Territories in the mid-1960s, a new Agreement was signed on 11 December 1969 by the sovereign states of Botswana, Lesotho and Swaziland (BLS), as well as South Africa.
However, the 1969 Agreement was a colonial construct with important elements missing, such as joint decision-making procedures, common policies, common institutions and institutional infrastructure. Around the time of the signing in 1994 of the Marrakesh Agreements, which heralded a new era of trade liberalisation, leading to the establishment of the WTO in 1995, some important political developments took place in Southern Africa with the achievement of independence of Namibia in 1990 and the attainment of democracy in South Africa in 1994.
To take advantage of these important global and regional developments, SACU Member States took a decision in 1994 to renegotiate the 1969 SACU Agreement to better reflect the prevailing political and economic environment. The objective of the SACU Member States was to have an international organisation with effective, transparent and democratic institutions, based on joint decision-making procedures, while also providing for a dispute settlement mechanism in the form of a Tribunal and the development of common policies. In 2002, the process of renegotiating the new SACU Agreement was completed and the five SACU Member States signed a new and comprehensive Agreement in Gaborone, Botswana. This Agreement entered into force on 15 July 2004 following its ratification by all SACU Member States. I wish to note that the 2002 SACU Agreement was also successfully considered by the Committee on Regional Trade Agreements at its 53rd sitting in 2009.
Distinguished Ladies and Gentlemen, as most of you would be aware, the 2002 SACU Agreement forms the basis for a collective review of the five Member States’ trade policies. SACU is a fully-fledged Customs Union, with a Common External Tariff and free movement of goods amongst its Members. Four of its Members are also in a Common Monetary Area. The five SACU states are at different levels of economic development. Botswana and South Africa are classified as upper middle-income countries, while Namibia and Swaziland are considered as lower middle-income countries, and Lesotho is a least developed country. However, all SACU countries face common challenges relating to poverty, unequal income distribution and high unemployment rates.
The 2002 SACU Agreement is a comprehensive Agreement when compared to the previous Agreement of 1969. The main features of the Agreement can be summarised as follows:
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Joint decision-making processes: The 2002 Agreement provides for clear decision-making processes whereby all SACU Member States are involved, with decisions taken based on consensus.
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The establishment of common institutions: The Agreement establishes a number of common institutions, with the SACU Council of Ministers being the highest decision-making body in SACU, supported by the SACU Commission, the Technical Liaison Committees and the SACU Secretariat, a permanent institution based in Windhoek, Namibia, responsible for the day-to-day administration of the Agreement. The Agreement further provides for the establishment of a SACU Tariff Board, which will be responsible for setting and implementing tariff policy. The Tariff Board will be supported in its work by National Bodies in Member States. Finally, the Agreement establishes an ad hoc Tribunal created to resolve any differences that might occur amongst Member States.
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Revenue-sharing formula: The Agreement makes provision for a revenue-sharing formula that provides for the equitable sharing of revenue derived from customs and excise duties, taking into account the differing levels of economic development amongst SACU Member States.
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Trade relations with third parties: The Agreement further provides for the establishment of a Common Negotiating Mechanism. As a Customs Union, SACU will have to ensure the integrity of the Common External Tariff. As a result, the Council decided that SACU should enter all trade negotiations with third parties as a bloc.
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Development of common policies: The Agreement recognizes that economic integration cannot proceed in the absence of common policies. The Agreement therefore calls for the development of common or harmonized policies, or increased co-operation, in the areas of industrial development, agriculture and competition.
Since implementation of the revised SACU Agreement in 2004, a number of initiatives have been embarked on to further deepen integration in the Customs Union and to strengthen the cooperation that exist among the five Member States. To this effect, SACU has taken a decision to include a Summit of Heads of State and Government in its institutional arrangement. There have also been initiatives aimed at facilitating further integration, including the adoption of a new Vision and Mission for SACU, as well as a related 7-point priority work programme, which includes (i) regional industrialisation, (ii) establishing of institutions, (iii) review of the revenue sharing arrangement, (iv) trade facilitation, (v) unified engagement in trade negotiations, (vi) trade in services and (vii) strengthening the capacity of the Secretariat.
This work programme is aimed at promoting development integration within the Customs Union, enhance economic development, diversification, industrialization and competitiveness of Member States and promote the integration of Member States into the global economy through enhanced trade and investment. We believe that if the region is to develop faster and take advantage of regional integration and globalisation, Member States need to address the constraints facing the supply side of their economies, including those related to inadequate regional infrastructural linkages. This requires restructuring in Member States to be orientated to become more diversified economies and to significantly reduce Member States’ over-dependence on primary commodities. This would also contribute to increases in the volume of intra-regional trade and SACU’s integration into the global economy. The key objective is thus diversification of production particularly into higher value added products. There is also a need to invest in infrastructure development to promote inter-connectivity between economies.
There has been notable progress in all areas including on the negotiation and conclusion of some trade agreements. A number of trade facilitation initiatives have also been launched and progress has been achieved in defining the parameters for the review of the revenue sharing arrangement.
With respect to trade negotiations specifically, Chairperson, I wish to indicate that SACU Member States continue to undertake trade negotiations with third parties as a collective. This is a legal requirement given our common external tariff. SACU has therefore negotiated common tariff offers with third parties and has thus far signed Free Trade Agreements (FTAs) with the Southern African Development Community (SADC) and the European Free Trade Association (EFTA) and a Preferential Trade Agreement (PTA) with the Member States of the Southern Common Market (MERCOSUR). The SADC and SACU-EFTA FTAs already entered into force, while the SACUMERCOSUR PTA is yet to be implemented as ratification on the part of MERCOSUR is still pending. In addition, we have signed a Trade, Investment and Development Cooperation Agreement with the USA aimed at facilitating increased trade between the two Parties to the Agreement.
We are further also engaged in negotiations with India towards a PTA. As a collective, SACU is also involved in negotiations towards a Tripartite Free Trade Agreement between the Common Market of East and Southern Africa (COMESA), the Southern African Development Community (SADC), and the East African Community (EAC), while negotiations towards a comprehensive Continental Free Trade Agreement involving all African Countries was launched in June 2015. Finally, SACU Member States as part of the SACU EPA Group have recently finalised the Economic Partnership Negotiations with the European Union and it is anticipated that the Agreement will be signed and ratified by October 2016. Our guiding principle in negotiating all these trade agreements has been adherence to the WTO provisions that apply in this regard.
Speaking of the WTO, it is important to observe as well that SACU Member States are having common tariff bindings to a large extent. There are only a few exceptions to this, and SACU has, with the assistance of the WTO Secretariat, embarked on an initiative to harmonise those bindings. SACU also applies common trade remedies and implements a common tariff setting mechanism. Further work to improve the institutional mechanisms and institutional infrastructure in SACU is ongoing.
Trade reforms have continued over the last few years. Despite the outbreak of the financial crisis in 2008, the simple average applied MFN tariff remained stable at around 8 percent since the last trade policy review in 2009 as attested by the latest WTO Secretariat Report. It is noteworthy that SACU increased the percentage of duty-free tariff lines from around 54 percent in 2009 to 56 percent in 2015. Despite our varied levels of development, the shares of SACU’s WTO agricultural products and WTO NAMA products attracting a zero tariff in 2015 are 40 percent and 58 percent respectively. In light of this and other features of our trade regime, we do not concur with the assertion made in the Secretariat Report that the SACU Common External Tariff remains complex.
Although SACU’s trading partners have stayed mainly the same since 2010, the percentage of trade with Asia and Africa has increased substantially.
Deepening global economic interdependence has meant that SACU’s economic prospects and resilience to external shocks is often severely tested. This has been most evident during the recent economic crisis which has had a disproportionate impact on SACU given the relatively small size of our economies. The International Monetary Fund projects the global economy to grow by 3.1 percent in 2015 and increase moderately over the coming few years. For SACU, the average growth for the period 2012-2014 is recorded at around 2.3 percent. SACU countries have had to contend with the impact of deep declines in commodity prices, volatile exchange rate fluctuations and falling export demand that are attributable to the global trade slowdown.
Against this background, it is our view that developing countries, including SACU Member States must be able to use all legitimate, legal policy space provided by WTO rules as necessary to protect their economies. In our view, the recent crisis has served to underline the importance of our programmes to pursue and deepen industrial development, infrastructure development and economic integration in SACU, within our region and across the African continent.
I wish to thank Members of the WTO for the interest shown in SACU and specifically for the large number of questions received. Nine countries submitted questions in advance, while another eleven countries have submitted since the deadline. In total we received over five hundred questions. We have sought to provide comprehensive answers to all of the questions received before the deadline. It should be noted that we received a number of questions in Spanish and we were not in a position to answer those without an official translation into English. We will endeavour to provide answers to these questions during this week and all the questions will be answered within the prescribed period of one month as provided for by the rules of procedure. We look forward to a fruitful exchange in this regard.
In conclusion, I would like to once again thank all delegations and the Secretariat for all your time and effort in participating in SACU’s 4th trade policy review, and for already making this exercise a success.
I thank you.
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Second Trade Policy Review of Angola: Minutes of the Meeting
The second Trade Policy Review of Angola was held on 22 and 24 September 2015, providing a good opportunity to assess the evolution of its socio-economic, trade and investment policies since its last Review in 2006.
Members commended Angola on its impressive recovery from its civil war and on its economic performance that has put it on track to graduate from LDC status. Economic growth has been supported by significant public investment in infrastructure (including utilities) and by high world prices for its main exports, crude oil and to a lesser extent diamonds. However, growth has slowed down since 2009 due to a less favourable international environment.
Noting that Angola’s dependence on oil renders its economy highly vulnerable to external shocks, Members encouraged it to continue with its diversification efforts by identifying sectors of promising growth. On the business environment, Members praised Angola for the steps already taken but expressed concerns about its restrictions on payment transfers, its visa issuance system, and its opaque regulatory and investment procedures.
Members commended Angola on its active participation in the WTO. The recent adoption of several trade facilitation measures by Angola, including the elimination of pre-shipment inspection and the revamp of fiscal administrations, was generally welcomed. Members encouraged Angola to submit its Category A notification and ratify the Trade Facilitation Agreement. Members also urged Angola to submit other outstanding notifications on, inter alia, SPS, TBT, subsidies and state-trading enterprises, with a view to further improving transparency.
Opening Statement by the Representative of Angola
H.E. Minister Rosa Escórcio Pacavira De Matos
Since its first Trade Policy Review in 2006, the Republic of Angola has continued to experience remarkable economic growth. At the political, economic and social, the country adopted, in 2010, a new Constitution that ensures political and economic stability, based on respect for individual freedom and collective citizens as well as the promotion of free economic and entrepreneurship and economy market based on the principles and values of healthy competition, morality and ethics.
During the preparation of its trade policy review, thirteen Members addressed more than a hundred and forty written questions to the Government of Angola, we appreciate the interest in particular to know the current situation of my country and thus take this opportunity to inform that the Government of Angola has already formulated their writing.
The worldwide trading activity has shown a slowdown, justified by the volume of the drop in exports of goods and services from 3.6% in 2013 to 3.3% in 2014, despite the slight increase in exports in developed economies (3.1% in 2013 to 3.3% in 2014) most notably the United States.
On the other hand, there was a slight increase in imports of 3.3% in 2013 to 3.4% in 2014, explained by the combination of import growth in advanced economies (2.1% in 2013 to 3.3% for 2014) and weak demand for imported products in emerging and developing economies (3.7% in 2014).
Several factors contributed to the weakening of trade and production in 2014, the fall in commodity prices, the decline in imports in Latin America, the slowdown in exports in Asian markets, including the continuing impact of the recession in the Eurozone.
Overall, the poor performance of world trade must be registered to trade in emerging and developing markets, which led to the maintenance of current account imbalances worldwide.
When it comes to global inflation in 2014, low commodity prices, such as crude oil and its derivatives, as well as food contributed to the recent decline of the change in the price index, positioning itself at 3.2 % for emerging economies, according to IMF data. In advanced economies, inflation is below expectations over the long term (1%), settling at 0.7%.
During 2014, the relevant inflation measures had an impact on the decrease of this indicator, having a core inflation advanced economies prowling rates of less than 0.7% against the 1.3% recorded in 2013 despite continued declines in the rate unemployment.
Compared to 2013, inflation in the euro zone has fallen, from 1.3% to 0.9% in 2014, causing global inflation and core inflation (excluding unprocessed food and energy) fell below 1%, positioning itself at 0.2% at the end of 2014 while emerging and developing economies have seen their inflation rate reduced from 4.5% in 2013 to 3.2% in 2014.
The economies of sub-Saharan Africa (where Angola is positioned) inflation rate rose slightly, justified by the reduction of investment in infrastructure and its consequence on agricultural production leading to shortages of commodities.
In regard to interest rates, according to the IMF, deposit reference rates (London Interbank Offered Rate - LIBOR), six months in U.S. dollars were fixed at 0.3% in 2014. In addition, according to BBA (British Banker’s Association), interest rates showed a stable behaviour, and in the euro area and Japan, the rates were fixed close to zero (0.2% on average).
Real sector
According to the latest data of 2014, the non-oil sector increased by 8.2%, while the oil marked a decrease of 2.6%. In this perspective, it is estimated that the nominal GDP has reached AOA 12.462,3 billion.
The good performance of non-oil sector was heavily influenced by the importance of the fisheries (19.1%), energy (17.3%) and agriculture (11.9%). Preliminary data points out a non-oil nominal GDP of AOA 8,158 billion, i.e. an increase of 11% compared to 2013.
In the year 2014, the oil sector was strongly affected by the decrease in physical production levels of crude oil, at about 2.7%, changing from 626.3% million bbl. to 610.2 million bbl., aggravated by price drop early in the second half of 2014, at which point it reaches its highest point of the year (US$115/barrel) until settling at around US$55.81 in December. During this period, the oil nominal GDP decreased about 11.9% from AOA 4,817.8 billion in 2013 to AOA 4,304.3 billion in 2014.
The diversification of the economic structure, expected to be achieved, will result on the gradual decrease in importance of the oil sector, the increase of the non-oil tax revenues, and the growth of non-oil exports through programmes aimed at stimulating domestic production, creating of priority clusters, as well as the creation of a strong national business community, particularly in terms of micro-, small- and medium-sized enterprises that generate employment and wealth to Angolans.
In this context, the Government has made investments focusing on the rehabilitation and development of infrastructure and the creation of a favourable macroeconomic environment for private investment in non-oil sector, and the implementation of a support to the development of policy across sectors the national economy.
Among the measures taken to promote entrepreneurship and private investment stand out the New Private Investment Law (Law No. 14/15 of 11 August), the Law on Public-Private Partnerships (Law No. 2/11 of 14 January), the Regulation of Law 30/11 of 13 September on the Micro, Small and Medium-sized Enterprises, the Small Business Support Program (PROAPEN), and the implementation of the Single Window Entrepreneurship (BUE).
In this regard, the Government has created programmes to facilitate the access of the productive sectors of the country to finance the costs to enable the economic viability of investments through the creation of an interest relief fund for micro-, small- and medium-sized enterprises, a fund guarantees to credit, and a venture capital fund for competitive projects at an early stage as well as the institutionalization of a credit insurance agency oriented management and control of credit risk in domestic and foreign markets.
In the medium and long term, an important element for the sustainability and ensuring strong money supply to local banks lies on the success of the diversification process of the national economy and the relationship between Angola and abroad within the competitive insertion of its economy in the international context since Angola almost only exports crude oil, which puts at risk the country’s international reserves taking into account the volatility of the price of crude oil in the international market.
The supply of foreign currency to commercial banks is guaranteed by the central bank, the main provider of foreign exchange market and regularly conducts foreign currency sale, to meet the needs of economic agents. However, due to the reduction in country foreign exchange assets, as a result of the oil price fall, the capacity to timely respond to all demand, a situation which has contributed to some operations, has extended their time of execution.
Aware of this situation, the Central Bank has made adjustments on the foreign exchange market to gauge the supply and demand.
The increase of the country’s foreign assets is another of the initiatives that the Government is taking over with emphasis on the use of other sources of external financing.
Foreign direct investment
In this context, the Angolan Agency for Investment and Export Promotion (APIEX) was recently created, whose mission is to promote the potentiality, the legal framework, the business environment as well as the investment opportunities in the country.
The APIEX will be in charge of promoting and attracting investment as well as exports promotion. The performance of private investment will be at sectorial level. Each Ministerial Department will be in charge to review and approve investments of its area of activity.
In order to facilitate the conditions of access of investors and stimulate private investment, it has been created the Law on Public-Private Partnerships and the new Private Investment Law. And in this context, the Government has created several programmes designed to foster the emergence of micro-, small- and medium-sized enterprises, among which we highlight the Angola Invest Program, the Entrepreneurship Promotion Program, the Credit Access Facilitation Program, the Support Program for Emerging Economic Activities, the Conversion of Informal Economy Program, and the Support Program to large companies and their integration into Enterprise Clusters.
In terms of foreign direct investment in Angola, there was an increase by about 8% corresponding to US$15.538 million in the year 2014, given that for the year 2013 the country registered a value of US$14.345 million, the year 2014 value is divided into US$12.026 million related to capital inflows and US$3.512 million related to reinvested earnings.
This flow, which was essentially no-financial private, relates to the execution of projects mainly linked to the oil sector.
The outflow of capital, both by the Angolan investment abroad as the foreign direct investment recovery from Angola, stood at US$20.318 million, a decrease of 11% compared to the year 2013, where the country had a flow of US$27.510 million.
As far as the new Private Investment Law (Law No. 14/15 of 11 August) is concerned, there is a distinction in terms of equal treatment. One big difference that stands out immediately is the fact that foreign investors are not conditioned to a lump sum to invest in Angola. However, the new Law provides tax incentives for private investments starting at US$1 million, while domestic investors to take advantage of these incentives will have to invest the amount equal to or greater than KZ 50.000 million (Article 2 of the new Private Investment Law).
Another difference relates to the establishment by the new Private Investment Law of binding partnerships between foreigners and nationals for certain business sectors (electricity and water; hotels and tourism, transport and logistics, construction, telecommunications and information technology and media) where nationals must hold at least 35% of capital and effective participation in management (Article 9 of the new Law of Investment Promotion).
The new Private Investment Law does not change the provisions on the profits’ repatriation. The profits and dividends transfer or repatriation abroad is a right granted to foreign investors under the combined provisions of Article 22 of Law No. 14/15 of 11 August - the Private Investment Law and Articles 239 and 326 of Law No. 1/04, of 13 February - the Companies Act, which is subject to the prior authorization of the National Bank of Angola, in accordance with Article 2 of the Notice No. 04/2003 of 7 February.
Article 22 of the Private Investment Law refers to transfer of profits and dividends clarifying that after implementing the project of private investment and on proof of their execution is guaranteed the investor the right to transfer abroad:
a) The dividends or distributed profits;
b) The proceeds of liquidation of its investments including capital gains, after payment of taxes due;
c) Claims product; and
d) Royalties or other compensation income from indirect investments associated with the transfer of technology.
External trade
The SADC Trade Protocol was adopted in 1996 and entered into force on 25 January 2000. The Republic of Angola signed the SADC Protocol on Trade in 2002, ratified it in February 2003 through the Resolution of the National Assembly No. 5/03 of 25 February, and has deposited its instrument of ratification to the Executive Secretary of SADC. In the same year, Angola has also signed the 2007 amendments and the 2008 SADC Protocol on Trade clarifying certain aspects of rules of origin and safeguard measures, incorporating new annexes on the resolution of disputes between Member States and the sugar trade.
This is why we created a technical working group to negotiate the implementation of the SADC Protocol on trade that produced a road map for implementation of the SADC Free Trade Area by 2017.
Regarding the SADC Protocol on Trade in Services adopted in 2012, the Republic of Angola signed the 18 August 2015 at the Summit of Heads of State and Government of SADC in Gaborone, Republic of Botswana.
With the European Union, Angola has been preparing the general basis for the signing of the Economic Partnership Agreements (EPAs). In this context, it made up a Memorandum of Understanding called “The Joint forward Angola-European Union” which sets guidelines in various fields among them the question of economic growth and sustainable development as an important step in the context of the signature of these instruments.
The European Union has supported the National Development through the European Development Fund Plan (EDF) in key areas such as sustainable agriculture and vocational training. Both parties agreed to maintain an ongoing dialogue of high level with the next meeting scheduled later this year in Luanda (Angola).
Regarding the preservation of heritage and material, there is an ongoing process of accession by the Government of Angola to the Convention of Rome on the protection of the rights of performers, producers of phonograms and broadcasting organizations and the Berne Convention concerning the protection of literary and artistic works. It is expected that the accession will take effect in 2016.
Angola, who is a Member of the WTO since 23 November 1996, reaffirms its commitment to the Multilateral Trade System and to the trade liberalization, which deems beneficial to the growth, development and well-being of the population. However, it underlines the urgent and imperative that these benefits are shared equitably among all countries of the world.
We believe that the WTO can play an important role, not only in the reputation of the trade liberalization process in order to make it more organized, diversified and flexible, but also in implementing a framework based on the rules of world trade.
It was against this background that Angola joined the WTO and actively supported the launch of the multilateral trade negotiations round at the fourth WTO Ministerial Conference held in Doha (Qatar) in November 2001.
Angola underlines the importance of special and differential treatment as a fundamental component of the negotiations, which reflects the recognition of the diversity of WTO Members, the asymmetry of the economic importance of each Member and the need to make the economic benefits of the trading system are well distributed among all Members.
In this respect, the provisions on special and differential treatment should be reviewed in order to strengthen them and make them more effective in accordance with the mandate of the Doha Ministerial Conference of 2001. The rules should be improved to ensure that flexibility in the WTO does not become invalid due to the obligations imposed by other organizations.
Angola calls upon all Members to engage more, showing flexibility where it is possible, to obtain a satisfactory outcome for all in the next Ministerial Conference scheduled in December 2015 in Nairobi (Kenya).
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US-SA trade war looms
The beginnings of a trade war have erupted between South Africa and the US as the Americans threaten to cancel citrus imports from South Africa if there isn’t some rapid breakthrough in allowing US chicken, pork and beef imports into the country again.
US President Barack Obama on Thursday evening issued an ultimatum to the department of trade and industry.
He instituted a 60-day notice period, after which he will revoke a part of South Africa’s eligibility for duty-free access to the US market under the African Growth and Opportunity Act (Agoa).
It would principally affect the export of oranges and mandarins to the US, which totalled about 47 500 tons, worth R374 million last year.
Other significant agricultural exports, such as macadamia nuts and wine, do not qualify under Agoa.
The move comes only days after South Africa finally put a deal in writing to allow an annual quota of US chicken pieces into the country.
The US, however, wants this finalised and wants sanitary measures against other meat products lifted as well.
Trade and Industry Minister Rob Davies called a press conference at short notice on Friday to deny Obama’s claims that there had been little progress on reallowing US poultry, pork and beef into South Africa.
This relates to bans on these products due to outbreaks of avian flu and mad cow disease in the US, among other things.
According to Davies, the exact opposite is true: South Africa and the US basically just need to dot the i’s and cross the t’s on most of the disputes.
“We take the letter seriously as a warning,” he said.
The notice is also “reversible at any stage”, said Davies.
He attacked the insinuation that there was a political impasse, saying he could not interfere with the technocratic work of South Africa’s government veterinarians.
The veterinary authorities had the final say on permitting animals into South Africa, he said.
“I don’t know what avian flu looks like; I don’t pretend to be an expert on that... those vets have got to do their due diligence and satisfy themselves that what is going to be given a certificate will mean there is not going to be a risk to the local poultry flock.”
Efforts were being made to expedite the process of clearing US chicken, he added.
As far as beef and pork were concerned, the certificates needed to appease the US had already been issued, he explained.
Davies also slated suggestions that South Africa should have simply given the US whatever it wanted in the negotiations around chicken.
“When someone says jump, you don’t just say ‘how high?’. What you do is negotiate.”
A deal to exempt 65 000 tons of US chicken pieces per year from antidumping duties was released for public comment last week.
American poultry lobbies hoped for a quota double the size of the chicken deal. Half of the import quota is also going to black-owned companies, which may result in much of it not being used at first due to the lack of black players in the poultry industry.
Davies said this issue was also being addressed and there would not be a reduction in the effective quota for US chicken because black importers could not be found.
“We’ve had to make a concession we didn’t have to make before under the previous Agoa. We’ve done it in a way that is doable, and I think that is not a record one needs to be ashamed about at all.”
The action against South Africa represents the US’s first use of the new powers written into Agoa after the 2000 act was amended and extended this year.
Among the amendments was a system for “out-of-cycle” reviews, such as the one South Africa has been subjected to. Another amendment was the sanction now being used against South Africa – revoking only part of a country’s Agoa benefit instead of the blunt instrument of totally excluding them.
The amendments make Agoa a far sharper tool for getting trade concessions out of African countries.
In hindsight, these amendments seem to have been designed specifically to allow the US to punish South Africa without destroying Agoa’s major advanced manufacturing success story – vehicle exports from South Africa.
Apart from the special “out-of-cycle” review of South Africa’s Agoa eligibility, the US last week kicked Burundi out of the scheme entirely.
The normal annual review of all African countries’ Agoa eligibility was taking place parallel to the South African review.
Burundi’s crackdown on political opposition is cited as the reason for the country’s eviction.
Swaziland was ejected in the previous review due to its suppression of trade unions.
Tit-for-tat
The vast majority of South African exports to the US do not qualify for Agoa benefits. The key sectors that do qualify are citrus fruit and cars.
Of South Africa’s roughly R70 billion in exports to the US last year, about 27% benefited from Agoa.
These exports consisted mostly of R12 billion in BMWs, but oranges and mandarins formed an important labour-intensive second stream of Agoa-related exports.
This year has seen a spectacular decline in South African imports of US animal products that are actually allowed here.
At least some of this is probably related to the strengthening dollar, which has made all US products far more expensive than they were last year.
The major group of animal products imported from the US is “guts, bladders and stomachs”, used for the casings of sausages. Imports fell from R130 million last year to only R16 million in the first three-quarters of this year.
The sanitary trade barriers on pork and beef have been around for a long time, but were expanded with a ban on chicken imports this year due to a bird flu outbreak in the US.
South African imports of US live chickens, about 91 000 in total, were worth R34 million last year. In the first three-quarters of this year, it was zero.
South African imports of R17 million in chicken offal from the US fell to R1.3 million early this year before stopping altogether.
Turkey imports likewise fell from R33 million last year to nothing this year.
These products are separate from the “bone in” chicken pieces about which there has been a long-running dispute after South Africa imposed antidumping duties more than a decade ago.
South Africa’s Statement on the African Growth and Opportunity Act (AGOA)
In a letter dated 5th of November 2015, President Obama, warned South Africa that if the negotiations on the outstanding issues related to the poultry SPS issues are not resolved by the 31st December then the US would suspend South Africa’s Duty Free Treatment of SA’s Agricultural goods into the US.
South Africa’s negotiators have been well aware of this authority to suspend a country’s trade benefits in terms of the AGOA Extension and Enhancement Act where the US believes that a beneficiary of AGOA is “not making continual progress toward the elimination of barriers to United States trade and investment”.
However, South Africa wishes to submit that it has been making continual progress during the past few months to implement the agreement reached in Paris on the 6th and 7th of June this year. The main issues to be resolved are the opening of the South African market to US exports of the three meats: poultry, beef and pork.
At the Paris meeting South Africa agreed to open the South African market to the US for 65 000 tons of bone-in chicken pieces through a rebate facility. In this regard the International Trade and Administration Commission has already issued a draft regulation on the 30th of October, 2015. The process of creating this quota is envisaged to be concluded well before the 31st of December 2015.
In addition, as Minister Davies did indicate to the Parliamentary Committee on Trade and Industry on the 3rd of November, South Africa’s Vets have been continuously engaged with the US Vets during the past few months on the drafting of the necessary trade and animal Health protocols for poultry, beef and pork.
Significant progress has been made in this regard and the work is almost complete. The reason the work has not been completed is due to the fact that both sides have had to engage on the documentation and negotiate the texts. Both sides have had to consider and evaluate these texts carefully before making submissions and proposals.
These issues are about animal health and are very complex – a balance has to be found between trade opening and animal health. In the case of the poultry issue the negotiation has been more complex because the US is seeking an agreement on the health standards/regulations that would obtain if/when there is another outbreak of Avian Influenza in the United States. The US requires South Africa to keep the market open to US poultry from those US States that are not affected during such an outbreak.
Notwithstanding this complexity South Africa’s Vets have been fully engaged on the detailed drafting of a trade protocol and animal health protocol for poultry. A draft trade protocol and animal health protocol is almost complete with some t’s to cross and some i’s to dot. A meeting of the Vets from the US and South Africa is taking place today – the 6th of November to attempt to close all the remaining technical issues. South Africa believes that it is “on track” to meet the December 31st deadline to resume imports of US poultry into South Africa.
On beef, the Cabinet approved the lifting of a ban on boned beef from several countries which had Bovine Spongiform Encephalopathy (BSE) including the United States on the 24th of June, 2015. South Africa has submitted a draft health certificate to facilitate trade from the US and is open to discussing these issues on an expedited basis.
On pork, the Animal Health Authorities of both governments have been undertaking the necessary technical work to ensure safe trade from at least three diseases, namely, Trichinella, Porcine Reproductive & Respiratory Syndrome (PRRS) and Aujesky. South African Vets have made significant progress and have been able to approve a list of pork cuts. South Africa has submitted a draft pork health certificate to the US. South Africa remains ready to address any other concerns of the US.
At the bilateral meeting today – the 6th of November – between the US and South African Vets the outstanding issues will be discussed with a view to finalizing the technical issues. It remains to be said that these are matters of animal health and have to be dealt with accordingly in a scientific and objective manner by the Vets.
South Africa’s Message to the US on AGOA remains:
-
AGOA has contributed significantly towards building a mutually beneficial partnership between the USA and South Africa.
-
South Africa is a vital part of the regional integration and development process underway in Africa and removing South Africa from AGOA would substantially diminish the significance of AGOA for sub-Saharan Africa and the United States.
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The breakthrough made at the June 6-7th meeting in Paris on the poultry issue and the progress made on the SPS issues related to poultry, beef and pork offer significant opportunities for the US and South Africa to increase their trade in Agriculture.
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South Africa is a relatively open economy and trade and investment relations between South Africa and the United States have continued to grow and deepen during the period under AGOA
-
Bilateral mechanisms, such as TIFA, have provided an excellent forum for the resolution of trade and investment concerns
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Proposal on a Declaration for MC10
Joint Proposal by China, Ecuador, India, Indonesia, South Africa and Venezuela
The co-sponsors of this Joint Proposal are strong supporters of an open, non-discriminatory, transparent and rule-based multilateral trading system embodied in the World Trade Organization (WTO). The co-sponsors are firmly committed to co-operate with other Members to ensure the success of the Tenth WTO Ministerial Conference (MC10) in Nairobi, Kenya during 15-18 December 2015.
This submission seeks to reaffirm Members’ commitments to respect the mandates under the Doha Development Agenda (DDA) and continue to negotiate the remaining DDA issues after MC10 consistent with the DDA mandates and framework.
As stated in the Doha Ministerial Declaration, the DDA “seeks to place the needs and interests of developing Members at its heart and continue to make positive efforts designed to ensure that developing Members, and especially the LDCs secure a share in the growth of world trade commensurate with the needs of their economic development”. In the subsequent Ministerial Declarations and General Council Decisions, WTO Members have reaffirmed their commitment to complete the Doha Work Program fully, conclude negotiations launched at Doha successfully and fulfill the development dimension in every aspect of the DDA, ratifying the principles of special and differential treatment and less than full reciprocity.
The United Nations has just adopted the Post-2015 Development Agenda one month ago, and WTO should make contributions to the sustainable development goals by promoting development through trade. Any attempt to dismantle the DDA would be detrimental instead of being conducive to the achievement of Post-2015 Development Agenda.
In this regard, the co-sponsors of this Joint Proposal hereby submit a textual proposal on Parts I and III of the Ministerial Declaration for Nairobi.
PART I
1.1. We, the Ministers, have met in Nairobi, Kenya, from 15 to 18 December 2015 at our Tenth Session. As we conclude our Session, we would like to express our deep appreciation to the Government and people of Kenya for the excellent organization and the warm hospitality we have received in Nairobi.
1.2. We reaffirm the principles and objectives set out in the Marrakesh Agreement Establishing the World Trade Organization. We also recall the Declarations and Decisions we adopted at Doha and at the Ministerial Conferences we have held since then and reaffirm our full commitment to give effect to them.
1.3. To this effect, we take note of the reports from the General Council and its subsidiary bodies. We welcome the progress that these reports, and the Decisions stemming from them, show in the work of the WTO, thereby strengthening its effectiveness and the multilateral trading system as a whole.
1.4. International trade can play a major role in the promotion of economic development and the alleviation of poverty. We recognize the need for all our peoples to benefit from the increased opportunities and welfare gains that the multilateral trading system generates. The majority of WTO Members are developing countries. We seek to place their needs and interests at the centre of the work in the WTO.
1.5. We particularly welcome the advances made in the Doha Development Agenda (DDA), as represented by the Decisions and Declarations we have adopted at our present session. These Decisions and Declarations signify that we have taken yet another step forward in the negotiations and attest to our strong resolve to complete the DDA as has been reaffirmed by our Leaders in the Sustainable Development Goal 17.10.
1.6. The DDA is a significant multilateral attempt to respond to trade and development interests of developing Members and redress the development deficit in the rules resulting from the previous rounds of multilateral trade negotiations. A comprehensive conclusion of the DDA with meaningful and balanced outcomes will provide impetus to global trade liberalization and facilitation, correct the development deficit in the rules resulting from the previous rounds of multilateral trade negotiations, improve the trading prospects of developing Members, and enhance the primary role of the WTO in global trade governance.
(text on WTO’s Achievements over the Past 20 years to be developed in the room W process)
We welcome the outcomes embodied in the following Decisions and Declarations as part of the progress in the Doha Development Agenda …
PART III – POST NAIROBI WORK
1.9. We reaffirm our commitment to the WTO as the pre-eminent multilateral organisation addressing international trade, including negotiating and implementing trade rules, settling disputes and supporting development.
1.10. We take note of the progress that has been made towards carrying out the Doha Work Programme, including the decisions we have taken during this Ministerial Conference. These decisions are important stepping stones towards the completion of the Doha Round. We reaffirm the Declarations and Decisions we adopted at Doha, and all subsequent Declarations and Decisions notably the Decision adopted by the General Council on 1 August 2004; the Hong Kong Declaration of 2005 and the Bali Ministerial Declaration of 2013.
1.11. All participants have worked hard and constructively to make progress as required under the Doha mandates. We have made some progress. However, more work needs to be done to enable us to proceed towards the full, successful and multilateral conclusion of the negotiations pursuant to paragraphs 45, 47 and 48 of the Doha Ministerial Declaration in fulfilment of the commitments we took at Doha. In those areas where we have reached a high level of convergence on texts, we undertake to maintain this convergence as the basis of further negotiations towards the conclusion.
1.12 Taking note of the progress made so far, we instruct our officials to continue working towards the expeditious conclusion of the Doha Development Agenda with a renewed sense of urgency. Further, we ask the Chairman of the General Council to convene a special meeting of the General Council no later than 31st March 2016 and every three months thereafter to review the progress of work done towards this successful conclusion in a time-bound manner.
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tralac’s Daily News selection: 6 November 2015
The selection: Friday, 6 November
Data visualisation: 'A new way of visualising world trade' (WEF)
SA has 60 days before Obama revokes AGOA privileges (Business Day)
Mr Obama said on Thursday that South Africa had until January 4 to satisfy him that it was complying with the eligibility requirements to enjoy duty-free access for its agricultural products under AGOA. Losing the duty-free status afforded by AGOA could affect US orders for South African citrus, which were valued at $57m through the first nine months of this year; macadamia nuts, worth $43m in 2014; and wine, worth $33m in 2014.
SA and AGOA: statements by Ambassador Gaspard, Democratic Alliance
Kenya: Government set to hold SME forum on AGOA (KBC)
China SA's biggest trade partner - Cyril Ramaphosa (iafrica)
The SACU trade policy review continues today at the WTO:
Extract from the US statement: With respect to SACU writ large, we are interested in hearing how plans for wider regional economic integration in Africa might affect SACU’s future, including the recently launched Tri-Partite FTA encompassing the Southern African Development Community, the East African Community, and the Common Market for Eastern and Southern Africa; as well as the African Union’s plans for a Continental FTA also announced earlier this year.
Extract from EU statement: We note that trade facilitation is an important area and we are keen to know where the individual SACU Members stand in terms of notification of their category A commitments and how far has the process had gone towards the ratification of the Trade Facilitation Agreement. Mr Chairman, in our advanced written questions, we have raised a number of issues. Let me group them into three categories: investment-related measures, import licenses, import levies and export taxes and the functioning of SACU.
The previous SACU trade policy review took place in November 2009: the documentation
Declaration of the AU Informal Ministerial on the 10th WTO Ministerial Conference
Ministers agreed that the LDC Package must include binding commitments that will be commercially meaningful for Africa and must be more than a repetition of the promises made in Bali. It should include a substantive delivery of a package beyond the Bali promises. It must also not erode any of the trade preferences currently enjoyed by African countries. Cotton must be addressed ambitiously, expeditiously and specifically in all three pillars of market access, domestic support and export competition. Further, the work in favour of LDCs should continue in the post-MC10 period.
Featured tweet: @UNCTADinAfrica: Africa needs a CFTA that is signed, ratified and implemented. Not just one quoted by researchers. Treasure Maphanga @ ECOWAS CFTA consultns.
AUC consults ECOWAS on the Continental Free Trade Area
The meeting (3-4 Nov) which was co-organized by ECOWAS, AUC, and UNECA, discussed the current state of trade liberalisation in the ECOWAS, BIAT action plans accompanied with M & E frameworks, studies on the trade potential of the CFTA, Principles Guiding the Negotiations for the CFTA, institutional arrangements for the negotiation of the CFTA, technical issues on the CFTA and private sector views on the CFTA. The Director of the Department of Trade and Industry, Mrs Treasure Maphanga, urged ECOWAS Member States to respond to the call by the AU Commission for the designation of Lead CFTA Negotiators and their Alternates in line with the Roadmap for the CFTA negotiations. The ECOWAS Regional Consultative meeting on the CFTA will be followed by the 5th Meeting of the Continental Task Force on the CFTA from 5-7 November 2015. [5th Continental Task Force meeting: update]
ACP, COMESA strategize on future cooperation
COMESA and the Secretariat of the African, Caribbean and Pacific Group of States have agreed on the need to take common positions on emerging issues related to the EU-ACP co-operation and the Intra-ACP co-operation. Further, they have agreed on the implementation of the forthcoming new trade programme, TradeCom 2 and the future co-operation framework with the European Union. The two agreed that TradeCom 2, which is an ACP-EU facility to be launched not later than January 2016, should be used among others, to strengthen South-South triangular Cooperation to enable all ACP regional organizations to share experiences. Mr Ngwenya said that the priority areas where TradeCom 2 and other ACP facilities should focus to achieve results on the ground are market linkages and productive capacities (sanitary and phytosanitary standards); trade and investment facilitation.
Update on Economic Partnership Agreements between the EU and African regions: a tralac discussion authored by William Mwanza
Trade and poverty alleviation in Africa: the role of inclusive structural transformation (UNCTAD)
This paper argues that while transformation is indeed necessary for trade to contribute to poverty reduction, the nature of transformation also matters. In particular, strengthening the contribution of trade to poverty reduction in Africa requires inclusive structural transformation, which is transformation that enhances participation of vulnerable groups in the trade and development process. And for this to happen, governments have to address economic, political and cultural issues that foster social exclusion, remove input market imperfections that prevent vulnerable groups from exploiting market opportunities, and adopt a more gradual approach to liberalization to ensure that the reforms do not have a disproportionate negative impact on the poor. [The authors: Patrick N. Osakwe, Miriam Poretti]
UN targets 'hidden source' for development funding (IPS)
The UN has estimated a hefty funding requirement of over $3.5trn to $5.0trn dollars per year for the implementation of its ambitious post-2015 development agenda, including 17 Sustainable Development Goals (SDGs), approved by world leaders in September. But at least one key question remains unanswered: how will the UN convince rich nations and the world’s multinational corporations to help raise the necessary trillions to reach those global goals, including the eradication of poverty and hunger by 2030?
Mainstreaming sustainability criteria into freight transport systems (UNCTAD)
Held from 14-16 October in Geneva, the Expert Meeting on Transport, Trade Logistics and Trade Facilitation brought together representatives from governments, international organizations, the transport industry academia and civil society to discuss the challenges and opportunities associated with sustainable freight transport infrastructure and services. Following the meeting, three of the invited speakers shared their thoughts on the theme and how the meeting could contribute to their organizations' work on sustainable freight transport. [Conference documentation]
EU-Nigeria Business Forum: Nigeria seeks to enhance its N5tn trade surplus with EU, says Osinbajo (ThisDay), Cecilia Malmström: 'The EPA as a pathway to diversification', Stopping agric produce rejection (The Nation)
Uganda: Export earnings expected to drop by Shs682b, says BoU (Daily Monitor)
Uganda’s export earnings are expected to drop by $200m (Shs682b) this year, following a decline in global trade. The Bank of Uganda says the expected decline in export earnings will worsen the country’s already weak balance of payments, resulting in a sharp depreciation of the Uganda Shilling. BoU executive director of research Adam Mugume told Daily Monitor’s sister newspaper The East African, that Uganda’s total export earnings are projected at $2.4b while the import bill is likely to be $6b.
Kenya: Nigerian firm to construct Sh2.8bn can factory (Daily Nation)
The International Finance Corporation will invest Sh8.2 billion in a can factory that will be set up by GZ Industries. GZ Industries, a Nigerian outfit, will be set up on Nairobi-Mombasa highway. It currently operates two beverage can manufacturing plants in Nigeria. It is on an expansion drive that will see it open a similar factory in South Africa, besides Kenya and acquire container glass, plastic crate and crown manufacturing operations of Frigoglass in Nigeria and the United Arab Emirates at a total cost of ($360 million) Sh36.7 billion.
Kenya shrugs off Uganda plan to build oil pipeline via Tanzania (The Citizen)
Maiden Kenya trade expo held in Accra (Graphic)
Tanzania suspended from EITI months after Passing Law (The Citizen)
The Board of the Extractive Industries Transparency Initiative has suspended Tanzania for failing to publish its EITI report for 2012/2013 in time. Tanzania’s request for the board to allow more time for the Tanzania EITI Secretariat to complete the report was rejected on grounds that the country did not back up the application with enough justification.
25 African states seek total ivory trade ban (The East African)
The countries, through the African Elephant Coalition meeting in Cotonou, Benin, have called for immediate and decisive action to save the African elephant. The Cotonou Declaration aims to end this crisis by committing to strengthen collaboration between member States to secure the highest possible protection for all African elephant populations under international law. Participants proposed a strict ban on all international and domestic ivory trade, including re-listing all African elephant populations as most endangered. They also called on other countries and organisations to support the proposal. The coalition also discussed other threats to elephants, particularly human-elephant conflict, as well as the difficulties member States face against determined and well-armed poachers, and in enforcing laws to combat poaching and ivory trade.
Experts call for punitive laws to deter illicit tobacco trade (New Times)
Grieve Chelwa from the Economics of Tobacco Control project at University of Cape Town in South Africa, urged governments to work with industry players if they are to eliminate illegal tobacco cartels. Speaking during the fifth consultative policy institutes committee meeting in Kigali recently, experts blamed the rise on weak institutions, corruption and lack of political will to streamline the tobacco industry on the continent. “The lack of co-operation among stakeholders and governments, as well as weak tax administration and enforcement have created loopholes that are being taken advantage of by unscrupulous dealers to trade tobacco illegally on the continent,” Chelwa told The New Times.
Is muscle or machine the future of agriculture in Africa? (World Bank Blogs)
The evidence is incontrovertible: Higher levels of mechanization are linked to economic growth, improved farm productivity, higher incomes and greater food security. But mechanization is no panacea: If not done right, it can potentially burden small farmers with machines they can’t afford or maintain and tools that eliminate jobs and disempower wage earners.
Howard G. Buffett: 'Africa’s agricultural potential begins on the ground' (IPS)
Zimbabwe’s mega dam project could flounder in the face of climate change (IPS)
Adverse weather pushes global food prices up by 3.9% in October (UN News Centre)
African lawyers challenged to dispense quality justice for more investments (IPPMedia)
Fitch lowers credit rating on Mozambique (MacauHub)
US-India Trade Policy Forum: joint statement (USTR)
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Related News
US to suspend South Africa duty-free farm trade status
The US plans to suspend trade benefits on agricultural goods from South Africa, intensifying a dispute over the country’s restrictions on farm imports that had pitted farmers in the two nations against each other.
The action follows a US review of South Africa’s status as a full beneficiary of a preferential trade agreement under the African Growth and Opportunity Act, or AGOA, which eliminates import levies on more than 7,000 products ranging from textiles to manufactured items.
The US determined that South Africa has continued imposing barriers to US trade, including American agricultural exports, according to a letter President Barack Obama sent to the Congress on Thursday. The suspension will become effective in 60 days, according to the notice.
The value of duty-free South African farming exports to the US market was $176 million in 2014, just a fraction of its $1.7 billion of trade under AGOA, according to US Department of Commerce data. While that proportion may be low, the suspension threatens to strain trade relations between the nations.
The trade program has helped South Africa more than double its exports to the US since 2000. Shipments under the agreement accounted for more than a fifth of the nation’s exports to the US last year, according to data compiled by the Trade Law Centre, based in Stellenbosch, near Cape Town. Total two-way trade between South Africa and the US was about $14 billion last year.
Pact Assessment
“I will continue to assess whether South Africa is making continual progress toward the elimination of barriers to US trade and investment in accordance with AGOA eligibility requirements, as well as whether this suspension of benefits is effective in promoting compliance with those requirements,” Obama said in the letter.
South Africa has ignored US concerns about blocking US beef, chicken and pork for years, said Representative Ed Royce of California, the Republican chairman of the House Foreign Affairs Committee, in a statement on Thursday.
“It is important for the South African economy, and our continued strong relationship with the people of South Africa, that they resolve these problems and regain AGOA eligibility,” Royce said.
AGOA, renewed by US lawmakers in June, benefits 39 sub-Saharan African nations. To remain a beneficiary, countries are required to eliminate barriers to US trade and investment, operate a market-based economy, protect workers’ rights and implement economic policies to reduce poverty.
Trade Restrictions
At the heart of the dispute between the US and South Africa were American chicken and cattle farmers who wanted South Africa’s government to remove trade restrictions imposed to protect the local industry from a flood of cheaper imports. South African Trade and Industry Minister Rob Davies said in September that his country had done all it could to retain access to AGOA.
“We are not too sure what is going on because the message we got from the poultry industry is that things are running well and that it was all systems go, but obviously that was not the case,” Johan Pienaar, deputy chief executive officer of Agri SA, the biggest representative of the nation’s agriculture industry, said by phone on Friday. “It came as a surprise to us and this is a pity. We will have to pull out all the stops as of today and engage with the department and hopefully with the minister as well.”
South Africa’s poultry industry won’t change its requirements unless the government says it should, Kevin Lovell, CEO of the country’s Poultry Association, known as SAPA, said.
African nations that no longer qualify as beneficiaries under AGOA include the Democratic Republic of Congo, Gambia and South Sudan. The US announced last week Burundi will be expelled from the trade pact after deadly violence connected to a political crisis in the East African nation. Swaziland lost its access in January because of an alleged lack of protection of workers’ rights, while Zimbabwe and Sudan aren’t eligible.
South African Trade and Industry spokesman Sidwell Medupe declined to comment when reached by mobile phone late Thursday.
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Statement by the U.S. Representative at the Trade Policy Review of the Southern African Customs Union
Statement by Ambassador Michael Froman in Geneva, 4 November 2015
Thank you, Chair. The United States would like to welcome the delegation from the SACU countries, as well as the Executive Secretary of SACU, to this fourth review of the trade policies and practices of the Southern African Customs Union.
We would also like to thank the governments of the five SACU member countries and the WTO Secretariat for the comprehensive reports that they prepared for this review. We note that our delegation submitted written questions in advance of this review and we look forward to receiving responses prior to the completion of the review.
As noted in the Secretariat’s report, SACU member countries have made important strides since the last trade policy review. Since the 2009 global economic crisis, at which time SACU as a whole registered negative growth, SACU member economies have managed to collectively grow at about 3 percent annually on average; albeit, unevenly among individual SACU members. At the same time, we recognize that the SACU member countries continue to face serious challenges that have kept them from achieving their full economic potential. As the Secretariat’s report notes, intra-country inequalities within SACU remain among the highest in the world, with high unemployment and poverty as common challenges.
Since the last trade policy review, the United States is pleased to continue a robust and vibrant trade and investment relationship with each of the SACU countries. Overall, two-way U.S.-SACU trade in goods grew by 40 percent to $16 billion between 2009 and 2014. Each SACU member country has exported a variety of products to the United States under the African Growth and Opportunity Act (AGOA) and the U.S. Generalized System of Preferences (GSP).
AGOA remains the foundation of our economic engagement with Africa, and we are pleased that the Trade Preferences Extension Act of 2015 (TPEA) extended AGOA – including the third-country fabric provision – through 2025, the longest ever extension of AGOA. The TPEA also extended GSP through 2017, thus providing producers, exporters, and investors across sub-Saharan Africa the certainty of duty-free access for a wide variety of products to the U.S. market under both AGOA and GSP.
South Africa has continued to be a significant beneficiary of AGOA. It is the largest non-oil exporter under AGOA, and exports a broad array of goods to the United States under AGOA and GSP, including motor vehicles and parts, metals and minerals, agricultural products, textiles, and chemicals to name a few. Lesotho is a leading exporter of apparel to the United States under AGOA. Botswana exports apparel under AGOA, and Namibia exports worked marble, granite, and wood products under GSP. Swaziland continues to export sugar and other products under GSP, but became ineligible for AGOA benefits in 2015 after failing to take certain necessary steps to protect core labor rights, over the course of several years. All told, over 98 percent of SACU exports to the United States in 2014 entered the U.S. market duty-free.
Additionally, since 2008, the U.S.-SACU Trade, Investment, and Development Cooperation Agreement (TIDCA) has provided a forum for consultative discussions, cooperative work, and possible agreements on a wide range of trade issues, including customs and trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, and trade and investment promotion. We look forward to working with SACU to address how to use the TIDCA as an effective vehicle to discuss the future of the U.S.-SACU trade and investment relationship based on a more mature, permanent, and reciprocal relationship.
The United States has submitted some questions about policies and processes at both the SACU-wide level and in individual countries. I would like to highlight just a few with respect to South Africa, and then also draw your attention to additional issues of interest to the United States.
With respect to South Africa, I would like to draw your attention to three areas:
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First, according to the Secretariat’s report, South Africa bases its animal health requirements on World Organization for Animal Health (OIE) guidelines and on risk assessments. In light of South Africa’s commitments under the WTO SPS Agreement, the United States remains extremely concerned regarding South Africa’s non-science based requirements that impact the import of poultry meat from countries affected by highly pathogenic avian influenza (HPAI); import requirements concerning Salmonella in poultry; import requirements for beef; and finally, import requirements concerning animal health issues related to pork, including trichinae, pseudorabies, and porcine reproductive and respiratory syndrome.
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Second, we remain concerned about policies that may ultimately have a chilling effect on foreign investment in South Africa. In particular, the provision contained within the Private Security Industry Regulation Amendment to require at least 51 percent South African ownership and control of foreign-owned private security firms would negatively affect existing foreign investment in this sector. If signed into law, the bill’s local ownership requirement would create a disturbing precedent concerning firms in a broad range of sectors, and would likely discourage foreign firms, including U.S. firms, from considering new investments in South Africa.
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Third, we note South Africa’s concern, as stated in SACU’s report, related to a provision contained within the Trade Preferences Extension Act of 2015 that requires an out-of-cycle review of South Africa’s eligibility to receive the duty-free benefits afforded under AGOA. We note that South Africa, like all AGOA-eligible countries, must meet certain eligibility criteria to take advantage of AGOA’s benefits, and we encourage South Africa to take the necessary steps to demonstrate that it is meeting those requirements.
With respect to SACU writ large, we are interested in hearing how plans for wider regional economic integration in Africa might affect SACU’s future, including the recently launched Tri-Partite FTA encompassing the Southern African Development Community, the East African Community, and the Common Market for Eastern and Southern Africa; as well as the African Union’s plans for a Continental FTA also announced earlier this year.
Finally, we applaud Botswana for playing a leadership role within SACU and ratifying the WTO Trade Facilitation Agreement (TFA) and notifying the WTO of its category A commitments. The WTO TFA would set the stage for more efficient customs and border procedures and coordination and encourage regional integration among SACU member countries. The TFA is widely recognized as having broader development benefits in addition to promoting regional integration, private-sector investment, and supporting export promotion. We encourage Lesotho, Namibia, Swaziland, and South Africa to follow Botswana’s lead to accept and implement the agreement as soon as possible. The United States stands ready to work with SACU member countries to ensure their timely implementation of the agreement.
In closing, the United States appreciates the opportunity to participate in this review of SACU’s trade policy, and we look forward to further discussions on trade matters with the delegation from the SACU countries.
Thank you, and we wish you a successful Trade Policy Review.
Statement from U.S. Ambassador regarding South Africa’s status under the African Growth and Opportunity Act (AGOA)
“During the past year, I have worked closely with leaders in government and industry in both of our countries to resolve the longstanding barriers to U.S. trade with South Africa, particularly with regard to American poultry, pork, and beef. The U.S. arrived at the decision to suspend certain AGOA benefits for South Africa only after many months of discussions. While the United States and South Africa have made significant progress in resolving outstanding issues, our trade in all three meats remains blocked. I am optimistic that the two sides will resolve the few remaining issues that would allow trade to resume, and hope that this will happen before the changes go into effect in 2016. We see enormous potential to strengthen our trade and investment ties with South Africa, which we believe could create significant numbers of new jobs and spur economic growth.” – Ambassador Patrick Gaspard
Background
On June 29, 2015, President Obama signed into law a bill reauthorizing AGOA for an additional 10 years. The bill included an amendment requiring a review of South Africa’s eligibility within 30 days. On July 21, 2015, the U.S. Trade Representative (USTR) launched an out-of-cycle review of South Africa’s AGOA eligibility, during which the U.S. made it clear to the South African government that South Africa needed to take concrete steps eliminating barriers to U.S. trade and investment, a key criterion to remain eligible for AGOA trade benefits.
Following the out-of-cycle review, the President has determined that South Africa has failed to meet AGOA eligibility requirements – specifically that it has not eliminated or made continual progress towards eliminating barriers to U.S. trade, including long-standing barriers to U.S. poultry, pork, and beef. As a result, the President has notified Congress and South Africa today of his intent to suspend duty-free treatment for all AGOA-eligible agricultural goods from South Africa, beginning 60 days after the date of this notification.
We will continue to monitor South Africa’s compliance with AGOA requirements and, if we determine that the initial suspension of duty-free treatment has not resulted in compliance with AGOA eligibility criteria, we will consider, no later than March 1, 2016, further action to limit, suspend or withdraw duty-free treatment for additional AGOA-eligible products from South Africa beyond those in the agricultural sector.
Letter from the President
Suspension of the Application of Duty-Free Treatment to all AGOA-Eligible Goods
In accordance with sections 506A(d)(4)(C) and 506A(c) of the African Growth and Opportunity Act (AGOA), I am providing 60-day advance notification of my intent to suspend the application of duty-free treatment to all AGOA-eligible goods in the agricultural sector for the Republic of South Africa 60 days after the date of this notification.
I am taking this step because South Africa continues to impose several longstanding barriers to U.S. trade, including barriers affecting certain U.S. agricultural exports, and thus I have determined that South Africa is not making continual progress toward the elimination of barriers to United States trade and investment as required by section 104 of AGOA. I have determined that such suspension of benefits would be more effective in promoting compliance by South Africa with the eligibility requirements listed in section 104 of AGOA than the termination of South Africa's designation as a beneficiary sub-Saharan African country, as it would better promote continuing efforts between the United States and South Africa to resolve these outstanding issues. Although South Africa has to date failed to meet critical benchmarks required to address these issues, it continues to express an interest in resolving U.S. concerns.
I will continue to assess whether South Africa is making continual progress toward the elimination of barriers to United States trade and investment in accordance with AGOA eligibility requirements, as well as whether this suspension of benefits is effective in promoting compliance with those requirements.
Sincerely,
BARACK OBAMA
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Declaration of the African Union Informal Ministerial Meeting on the Tenth WTO Ministerial Conference
AU Trade Ministers met on 19 October 2015 in Brussels to consider the state of play of the DDA negotiations in preparation for MC10 to be held in Nairobi in December 2015.
Ministers underscored that engagement in the MC10 process should be framed by the overriding priority accorded to Africa’s industrial development in Agenda 2063 and other continental policy frameworks. Ministers took note of recent international agreements including the Addis Ababa Declaration on Financing for Development and the Post-2015 Development Agenda that reaffirmed the important role of trade in meeting internationally-agreed development objectives and targets and that development should be an integral component of all multilateral trade agreements.
1 ON THE OUTCOMES FROM THE NAIROBI MINISTERIAL
1.1 LDCs
i. Ministers agreed that the LDC Package must include binding commitments that will be commercially meaningful for Africa and must be more than a repetition of the promises made in Bali. It should include a substantive delivery of a package beyond the Bali promises. It must also not erode any of the trade preferences currently enjoyed by African countries.
ii. Cotton must be addressed ambitiously, expeditiously and specifically in all three pillars of market access, domestic support and export competition.
iii. Further, the work in favour of LDCs should continue in the post-MC10 period.
1.2 Agriculture
i. The Rev.4 modalities should remain the basis for the agriculture negotiations as it enshrines the overall balance achieved after more than a decade of negotiations.
ii. There should be enhanced accessibility to a flexible, easy to use Special Safeguard Mechanism in agriculture.
iii. There should be a strengthening of the flexibilities accorded to Net Food Importing Developing Countries (NFIDCs).
iv. Overall Trade Distorting support should be bound and reduced substantially by developed countries.
v. On domestic support, there should be stricter disciplines on Green box measures to ensure that they are at most, minimally trade distorting.
vi. There should also be a reduction in product specific de minimis of developed countries in accordance with Rev.4. There should also be limited and bound product specific Aggregate Measure of Support (AMS) in accordance with Rev 4 for developed countries.
vii. There should be a permanent solution on public stockholding for food security purposes in accordance with the Bali Ministerial Decision and the General Council Decision of November 2014.
viii. On Export Competition, while African countries can support an outcome that eliminates export subsidies, Ministers agreed to seek an outcome on food aid that ensures its provision addresses unintended consequences that damage national regional production in countries.
1.3 Development
i. There should be binding outcomes in accordance with paragraph 44 of the Doha Ministerial Decision on the 25 S&D proposals advanced by the G90.
ii. The strengthening of S&D provisions is in line with Africa’s industrial development priorities as encapsulated in the Agenda 2063 and with the need to preserve adequate policy space.
1.4 TRIPS
i. The transitional period under Article 66.1 of the TRIPS Agreement with respect to pharmaceutical products and the waivers from the obligations of Article 70.8 and 70.9 of the TRIPS Agreement should be extended for 30 years.
ii. Ministers agreed that the Non Violation and Situation Complaints system is inapplicable under the TRIPs Agreement and will seek a permanent moratorium on this at MC10.
1.5 Accession
i. For acceding African countries, there should be the principle of accelerating accession procedures without imposing onerous concessions and commitments.
ii. In addition, technical support should be provided prior to and post accession to the acceding countries.
1.6 Fisheries
i. There should be a tightening of the discipline on fisheries subsidies to ensure that those forms of subsidies do not promote overfishing and overcapacity.
1.7 Other Issues
i. Concern was expressed that proposals on Transparency have yet to be received and that it will not be possible to accept any outcome that will involve implementation of any new and onerous administrative requirements or requirements that intrude into domestic policy making processes.
2 ON THE PROCESS LEADING UP TO MC10
2.1. Ministers emphasized willingness to engage with all Members to ensure a meaningful outcome from Nairobi.
2.2. Ministers agreed that the outcome from Nairobi should be a Ministerial Declaration with clear decisions on substantive priority issues with a strong development dimension.
2.3. Ministers emphasized that to deliver an agreed Ministerial Declaration by Nairobi, a transparent, participatory and inclusive drafting mechanism and process, with full and regular multilateral oversight, is needed.
2.4. Ministers insist that they are kept fully informed of the various iterations of the Declaration as it is developed.
3 ON THE FUTURE OF THE DOHA DEVELOPMENT ROUND
3.1. Recalling the importance of the conclusion of the Doha Development Round to the African integration and industrialization agenda, the Ministers recognize that there is little prospect for a credible conclusion for the DDA at MC10. As such, they agreed that there must be a continuation of the negotiation beyond the Nairobi Ministerial within the DDA framework.
3.2. Ministers reaffirmed the negotiating mandates, developmental principles and objectives of the DDA.
3.3. Ministers reaffirmed the centrality of the principles of the single undertaking; less than full reciprocity; and Special and Differential Treatment (S&DT).
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The 5th Continental Task Force (CTF) Meeting on the Continental Free Trade Area (CFTA) considers documents in preparation of the negotiations
The 5th Meeting of the Continental Task Force (CTF) on the Continental Free Trade Area (CFTA) at the Experts level, commenced on 5 November 2015 in Abuja, Nigeria. The meeting was organized by the Department of Trade of the Africa Union Commission in preparation for the commencement of the CFTA negotiations in December 2015.
During the next three days, experts from the African Union Commission, the Regional Economic Communities (RECs), the African Development Bank (AfDB), and the United Nations Economic Commission for Africa (UNECA), will consider all the post-launch preparatory issues and consider essential process issues and technical documents that will enable the negotiations to be conducted in an efficient way. The Trade Law Centre (TRALAC) has been invited as a resource person to the meeting.
The CTF is established to coordinate actions between the African Union Commission and the Regional Economic Communities and to ensure that the CFTA negotiations are conducted within the agreed timelines. The expected results of the CTF are to finalize drafts of the various technical documents that will be considered by the First Meeting of the Continental Free Trade Area-Negotiating Forum (CFTA-NF) as well as the negotiations to be concluded later in order to establish the CFTA by the indicative date of 2017.
In her opening remarks, Mrs. Treasure Maphanga, Director of the Department of Trade and Industry of the African Union Commission, expressed her gratitude to the meeting for the milestone achieved at the African Union June 2015 Summit with regards to the launch of the CFTA negotiations. She recalled the importance and the objectives of the meeting and underscored the progress made on the CFTA process. The Director encouraged the Continental Task Force to work as a team to ensure that the negotiations are effectively concluded by 2017. Mrs. Maphanga urged the participants to share with the meeting, their regional experience and best practices in order to enrich the documents and to further consolidate a strategy on preparing and conducting negotiations at the continental level.
“We need to think outside the box to envisage the way to achieve this mandate and meet the schedule set to us by our Leaders. We are very keen to work with you in order to synchronize and share some of the lessons learned on the Tripartite and other Regional Economic Communities”, she concluded.
The 5th Meeting of the CTF will consider the draft Rules of Procedure for the CFTA Negotiating Forum, the Initial drafts of the modalities for the CFTA tariff negotiations and trade in services and the establishment of Technical Groups in specific areas inter alia.
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Trade and Poverty Alleviation in Africa: The Role of Inclusive Structural Transformation
Economic transformation is increasingly believed to be the mechanism to make trade work for poverty reduction and development in Africa.
This paper argues that while transformation is indeed necessary for trade to contribute to poverty reduction, the nature of transformation also matters. In particular, strengthening the contribution of trade to poverty reduction in Africa requires inclusive structural transformation, which is transformation that enhances participation of vulnerable groups in the trade and development process.
And for this to happen, governments have to address economic, political and cultural issues that foster social exclusion, remove input market imperfections that prevent vulnerable groups from exploiting market opportunities, and adopt a more gradual approach to liberalization to ensure that the reforms do not have a disproportionate negative impact on the poor.
There is also the need to mainstream employment as well as rural development into the transformation agenda and ensure that workers get a fair share of the gains from productivity increases resulting from structural transformation.
Introduction
The international community recently adopted the Sustainable Development Goals (SDG) as the transformative vision and framework that will guide development policy and international cooperation over the next fifteen years. Unlike the Millennium Development Goals (MDG), the SDGs have a more ambitious agenda and so will require more innovative thinking and approaches in implementation to ensure that the outcomes are much better than was the case with the MDGs. One of the SDGs focuses on the elimination of poverty by 2030. This is obviously a herculean task which, given current trends in official development assistance (ODA), will require the mobilization of other sources of finance for development to ensure that African countries and least developed countries (LDCs) can put in place the right set of policies to achieve the goal by the target date.
The Addis Ababa Agenda for Action (AAAA) identifies trade as one of the main sources of finance for implementation of the SDGs. This is not surprising in the light of the fact that economic models suggest that trade has the potential to make significant contributions to growth and poverty reduction in an economy. Since independence in the 1960s, African governments have made efforts to exploit this potential of trade for development, as reflected in the fact that trade increasingly accounts for a very large share of output in Africa. Available data indicates that the ratio of trade to output increased from 43 percent in the period 1995-1999 to 60 percent in the period 2008-2012.
The increasing role of trade in African economies has gone hand-in-hand with an increase in the continent’s growth rate as well as a reduction in the poverty rate, particularly over the past two decades. Nevertheless, recent evidence indicates that Africa is the only continent where the number of poor has also gone up over the past two decades. One of the reasons for this is that recent trade and output growth did not generate sufficient employment to absorb the rapidly growing labour force, as evidenced by the fact that there has been no significant change in the unemployment rate in Africa. For example, despite the rapid growth experienced by the continent over the past decade, the unemployment rate in sub-Saharan Africa only fell from 8.2 percent in 2004 to 7.7 percent in 2014.
Interestingly, the coexistence of rapid growth with high unemployment in Africa is a feature that is observed in both resource-rich and non-resource-rich countries. For instance, in the resource-rich countries of Angola and Nigeria, the unemployment rates were estimated to be as high as 26 and 23.9 per cents respectively in 2011 despite a decade of relatively rapid growth. Similarly, in the nonresource rich countries such as Ethiopia and the Gambia it is estimated that youth unemployment was as high as 27 and 40 percent respectively in 2011. These facts suggest that African countries have to address the challenge of employment-creation and also strengthen linkages between trade and poverty reduction to enhance prospects for meeting the SDGs on the continent.
Recent research suggests that structural transformation can play a crucial role in generating employment and also in enhancing the impact of trade on poverty reduction in Africa. But in transforming the continent, it is important for African policymakers to recognise that the nature of structural transformation also matters for poverty reduction. In particular, if structural transformation is to have the desired impact on poverty it must be done in such a way that it fosters social inclusion, through for example, ensuring that it has a positive impact on vulnerable groups, particularly women who happen to account for a large percentage of the poor in most countries. This requires that the activities promoted in the transformation process be those in which the labour force participation rates for women are likely to be high. It also requires fully integrating social inclusion into the transformation agenda.
Against this backdrop, this paper discusses how to make structural transformation inclusive to strengthen linkages between trade and poverty reduction in Africa. It argues, among others, that governments have to address social, political and cultural factors that foster social exclusion, remove input market imperfections that prevent vulnerable groups from exploiting market opportunities, and adopt a more gradual approach to liberalization to ensure that the reforms do not have a disproportionate negative impact on the poor. The paper also underscores the need to mainstream employment as well as rural development into the transformation agenda and ensure that workers get a fair share of the gains from productivity increases resulting from structural transformation.
The aim of the Trade and Poverty Paper Series is to disseminate the findings of research work on the inter-linkages between trade and poverty and to identify policy options at the national and international levels on the use of trade as a more effective tool for poverty eradication. The opinions expressed in papers under the series are those of the authors and are not to be taken as the official views of the UNCTAD Secretariat or its member states. The designations and terminology employed are also those of the authors.
The first paper in the series, ‘Transformative Regionalism, Trade and the Challenge of Poverty Reduction in Africa’, is available here.
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EU statement at the Trade Policy Review of SACU
Statement by Ambassador Marc Vanheukelens, Geneva, 4 November 2015
I would like to extend a warm welcome to the SACU Delegation, led by Ms. Niki Kruger as the Head of Delegation of South Africa and spokesperson for the SACU countries as well as to the heads of the delegations of Botswana, Lesotho, Namibia, and Swaziland gathered today for their review. I would also like to thank the WTO Secretariat for their comprehensive reports and the Discussant, H.E. Mr. Alberto Pedro D’Alotto (Argentina), for guiding us in our discussions.
It is somewhat of a challenge to make a statement that covers both the regional organisation – SACU – as well as its individual Members. SACU is the oldest Custom Union in the world, yet the institutional set-up, the level of development and the geographical characteristics of each SACU Member are quite different.
The reports show that generally speaking growth has not been sufficient in several of the SACU Members reviewed. The reports also reveal that the cause of this lacklustre growth can be traced back to the financial crisis or to international developments, such as the evolution of commodity prices. Other factors seem to include – naming only a few – the energy supply (for example in South Africa or Lesotho) or the need to strengthen certain institutions (which seems quite important for Botswana and Lesotho).
One of the priorities of SACU Member States is to diversify their economies, to broaden their export base, and to move up the value chain away from pure reliance on commodities. The EU has also noted their commitment to address major regional and social inequalities, poverty, health, education and the policy measures aimed at attracting investment.
We strongly support SACU and its Members in these policy objectives and believe that this Trade Policy Review will contribute to shedding light on how to obtain them.
The EU is of the view that the Economic Partnership Agreement concluded in July 2014 should help in this regard, not least because it includes a development chapter that can guide trade-related assistance in a number of key areas for trade and investment. From 2007 to 2013, cooperation with SACU members under the European Development Fund and the EU Budget amounted to about 1.4 billion euros. The European Investment Bank contributed with a roughly equivalent amount of 1.4 billion euros during that period. As a result, a number of key areas of national development strategies were supported. We hope to sign our bilateral agreement in 2016. During the negotiations, the EU-SACU relationship has proven to be strong. I would like to express my thanks to my colleagues of SACU for these achievements.
The EU is by far SACU’s biggest import partner and its second export partner. No less than 28% of all SACU’s imports originates from the EU and SACU ships 16% of all its exports to the EU. South African exports to the EU are diversified, but we recognise – as do the reports for this review – that the other SACU Members have a narrower export base and that diversification is a key objective.
We note that trade facilitation is an important area and we are keen to know where the individual SACU Members stand in terms of notification of their category A commitments and how far has the process had gone towards the ratification of the Trade Facilitation Agreement.
Mr Chairman, in our advanced written questions, we have raised a number of issues. Let me group them into three categories.
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Investment-related measures. Improving the business climate is a condition to attract more Foreign Direct Investment. It is not limited to investment laws and Bilateral Investment Treaties, even if those are indeed quite fundamental. Public procurement, local content requirements, the role of the institutions, the consultation of stakeholders, and the role of State Owned Enterprises in relevant markets are important as well. Naturally, investment is also dependant on infrastructure and a reliable and affordable energy supply.
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Import licenses, import levies and export taxes. In a number of cases, the EU is of the view that there are disproportionate or burdensome requirements that constitute obstacles to trade. We would like to hear more about your reasoning for the appropriateness of these measures.
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The functioning of SACU. The EU would be interested to know more about the Members’ views on the perspectives for SACU. For example, we raised questions on competition enforcement at regional and national level, on the link between the Common External Tariff and some applied tariffs, and on the prospects for a reform of the revenue sharing formula.
Addressing all these issues will keep us busy during the two days of the review. Nevertheless, in our view, discussing these matters could lead to decisions that would bring improvements to the business environment and investment climate in SACU.
Let me conclude, Mr Chairman, by wishing on behalf of the EU all the success and benefit to the full to the SACU and its individual Member States with this Trade Policy Review.
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ACP and COMESA strategize on future cooperation
COMESA and the Secretariat of the African, Caribbean and Pacific (ACP) Group of States have agreed on the need to take common positions on emerging issues related to the EU-ACP co-operation and the Intra-ACP co-operation.
Further, they have agreed on the implementation of the forthcoming new trade programme, TradeCom 2 and the future co-operation framework with the European Union.
During a meeting held on the sidelines of the ACP Trade Ministers’ meetings in Brussels on 19 October 2015, COMESA Secretary General, Mr Sindiso Ngwenya, and his ACP counterpart, Ambassador Dr Patrick Gomes agreed that there was need for decentralization of the TradeCom 2 for better efficiency and subsidiarity needs.
They considered the support needed for the tripartite initiative within the East and Southern Africa region to build market linkages and transformation, which was based on the three pillars of: market integration, industrialization and infrastructure development.
The two agreed that TradeCom 2, which is an ACP-EU facility to be launched not later than January 2016, should be used among others, to strengthen South-South triangular Cooperation to enable all ACP regional organizations to share experiences.
Mr Ngwenya said that the priority areas where TradeCom 2 and other ACP facilities should focus to achieve results on the ground are market linkages and productive capacities (sanitary and phytosanitary standards); trade and investment facilitation.
With regard to the document, ACP-EU Joint consultation paper post 2020 “Towards a new partnership between the EU and the ACP Countries after 2020”, submitted by the EU on the new partnership between the ACP countries after 2020, the two chief executives agreed to develop a position paper on how the consultations among the ACP countries and the ACP regional organizations should be conducted. This is in preparation for the 8th ACP Summit that will take place from 31 May to 01 June 2016 in Papua New Guinea.
It was noted that in addition to addressing functional co-operation, the submitted ACP-EU joint consultation paper should also cover the cooperation in a more holistic manner.
With regard to the ACP Inter-Regional Coordination Committee (ACP-IROCC) which was jointly initiated by the Eastern and Southern Africa-Indian Ocean (ESA-IO) region and the ACP Secretariat in 2011, the two chief executives agreed that this framework has to be reactivated as a consultative forum of all ACP-ROs on all issues of common interest.
The first term of the ACP-IROCC was led by COMESA and ACP Secretariat as co-chairs and the ACP Secretariat being a permanent co-chair.
With COMESA and ACP Secretariat as co-chairs it has been recognized that this forum should be maintained and strengthened as a consultative framework between the ACP Secretariat and all ACP regional organizations on all issues related to their cooperation with the EU.
It was agreed that ACP-IROCC meeting should be convened in March 2016 ahead of the joint EU-ACP Council of Ministers scheduled to take place in Dakar from 28 to 29 April 2016. In the interest of continuity and institutional memory, Ambassador Dr Gomes requested his COMESA counterpart – in his capacity as the immediate past co-chair – to accept to coordinate with Economic Community of Central African States (ECCAS) and have that meeting convened.
Mr Ngwenya thanked Mr Gomes for the good cooperation that exists between the two organizations.
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Economic partnership with EU vital for Nigeria’s development, says Commissioner Malmström
Cecilia Malmström, EU Trade Commissioner, visited Lagos, Nigeria on 5 November 2015, where she spoke at the EU-Nigeria Business Forum and meeting with government, business and civil society leaders.
In her remarks she focused on the challenge of diversifying the Nigerian economy beyond oil and gas. She showed how the EU West Africa Economic Partnership can promote diversification by creating export opportunities for new business sectors, lowering the costs of capital investment and providing technical support and assistance to key infrastructure for the development of the economy. She urged the government to ratify the agreement in the interest of Nigeria's consumers, workers and enterprises.
The EPA as a Pathway to Diversification
Speech by Cecilia Malmström, Commissioner for Trade
I’m delighted to be here in Nigeria. It’s my first trip to visit your country.
It’s also the first trip to Nigeria by a representative of the European Commission since President Buhari took office earlier this year. So I’m eager to get to work on building the relationship between the EU and Africa’s largest economy.
And where better to do it than here in Lagos, Africa’s largest city and the third fastest growing city in the world?
And where better in Lagos than here at the EU-Nigeria Business Forum, in the company of entrepreneurs who have great ambitions to link our economies together?
We have so many important issues to work on, from the security of this region to the global challenges of terrorism, migration and climate change. But crucial for all of them are our economic ties.
And as the European Union’s Commissioner for International Trade, that’s what I would like to talk to you about today.
We are here in a time of transition. Not just for the government of this country, but for the economy of Nigeria and of Africa as a whole.
We have seen two decades of remarkable, unprecedented economic growth across this continent. A new story of growth and success has replaced the old narrative of stagnation and conflict.
One of the best parts of this new story of success is that it hasn’t just been a product of high commodity prices. It’s also been about better functioning democracies, wider political stability and improved economic management.
But even so it’s impossible, especially in a country like Nigeria, to dismiss the importance of commodity exports like oil and gas.
And that’s why this is a moment of transition.
The high prices we have seen for energy and other commodities over the last decade are over - including for Nigerian oil – and they are not likely to recover fully overnight. That’s hurting farm workers in Brazil, mine workers in Australia and steelworkers in Europe. It’s a challenging time for many people.
But what it means for a country like Nigeria is that diversification of the economy is more urgent than ever. The wider the range of your production, the better insured you are against price fluctuations like these.
Deepened trade and investment ties with the European Union are a way to help achieve that goal. Our ties are very close already. Last year our trade in goods came to almost 40 billion euro. But closer ties and deeper engagement will help us both do more business, create more jobs and drive our economies forward.
How?
Let’s start with some general truths about trade and investment.
What everyone agrees on is that exports are good news. They bring demand from abroad back home, meaning more growth and more jobs. For an economy that’s trying to diversify, access to export markets means new companies in new sectors can think big right from the start.
But access to imports is also vital for an economy and certainly for an economy that’s diversifying. Just look at the great examples of diversification and development in Asia over the last decades. Those countries grew as they opened up to imports - not overnight, but gradually.
Why? Because the reality is that today it’s almost impossible to make a product or deliver a service without some kind of international input. In Asia the model often involved importing high-tech components in order to assemble them into finished products before re-exporting.
Here in Nigeria, it might be importing machinery and equipment to process agricultural products and add value to them, a sector I know many of you here today are interested in.
But it’s true across the board. In Europe 80% of our imports are used by industrial or services companies to drive their business.
Access to imports also helps keep costs down. For companies that are just starting out in new sectors, getting the best inputs at the best prices is vital.
Moreover, imports – like foreign investment – also transmit ideas and innovation. And that’s essential for an economy that wants to break new ground. Imports are a way of making contacts with business practices and technology that can help Nigerian companies fulfil their potential.
As the great Nigerian writer Chinua Achebe has written, “Whatever you are is never enough; you must find a way to accept something – however small – from the other to make you whole.”
***
The economic partnership agreement – or EPA – that we have negotiated between the countries of West Africa and the European Union is about bringing all of these benefits to Nigeria.
That’s why my message today is that signing and implementing that agreement is a clear win for the companies, the workers, the consumers and the government of Nigeria.
First, it will provide duty-free and quota-free access to a market for your exports. Not just any market. The EU’s single market of 500 million people is the world’s largest.
That access is a big improvement on the current situation, and particularly important for some of Nigeria’s main non-oil exports like processed cocoa, other processed foods and leather.
Moreover, because this is an international treaty, that free access is guaranteed over time. So companies can count on the European market in future.
Second, the EPA will improve the economic integration of West Africa as a region. Nigeria is by far the biggest economy in that region, but trading with your neighbours is still vital for prosperity and growth. Just look at the example of Germany. German exporters are successful around the world, but they actually export more within the European Union than outside it. And German companies have spread their production processes and their suppliers all over Europe, not just in Germany.
Third, the agreement will help Nigerian companies gain access to the international inputs and expertise that will help them grow. On the panel today we have a representative from Tulip Cocoa Processing. It’s a great example of a company that’s adding value to the cocoa beans produced by Nigeria’s farmers. They are doing that at their factory here in Nigeria. But they are also connected to international markets via their headquarters in the Netherlands.
The EPA will help this kind of development. The tariffs that it reduces on imports are overwhelmingly on products like machinery and equipment which will support the development of value-adding companies all across Nigeria’s economy. And European companies are the world leaders in this kind of production. We have the high-tech costeffective products that Nigeria needs – whether it’s machines for processing crops or refrigeration to ensure the integrity of the cold chain.
Fourth, the EPA does not mean that local producers in sensitive sectors will have to face competition from abroad.
We negotiated this agreement very carefully. For all the most sensitive products like poultry, yoghurt, chocolate, cement, textiles, cars and many others, there will be no change whatsoever. All of these are protected by high tariffs now. And the EPA is clear that this will remain the same.
And even for the products like machinery that will see a change, it will happen very gradually.
So this deal creates export opportunities, makes companies more competitive and takes care that vulnerable producers are not harmed in the process.
***
But it also does something more important. It supports the broader project of reform of the Nigerian economy.
Promoting trade is my job. I have “Trade” written into my job title.
But even I have to admit that opening markets alone is not enough to deliver growth. There are many, many other actions that are essential to empower people to create the successful companies needed to drive diversification and growth.
Physical infrastructure is a big part of that. In his inaugural address earlier this year, President Buhari pointed to key infrastructure challenges for Nigeria like electricity, railways and roads.
But he also pointed to the equally, if not more complicated, challenges of what we might call virtual infrastructure.
It covers things like healthcare, skills, education and, of course, the rule of law.
Improving the security situation is part of the rule of law. In regions that lack basic security, there is very little prospect of growth.
That’s one of the reasons the EU supports the Office of the National Security Adviser, and Nigeria’s robust efforts to tackle the threat posed by Boko Haram. We are well aware of the plight of the people - particularly but not only women and girls - who have suffered their attacks and abuses.
Respect for human rights is an essential part of that effort to put an end to Boko Haram. So we welcome the investigations that President Buhari has opened into allegations of abuses on the government side.
We also applaud the strong stance President Buhari is taking on the fight against corruption. I have just come from a meeting with the Nigerian Competitiveness Council and the Clean Business Initiative, which is trying to show the costs of corruption for companies themselves and advocate for change. We in the European Union couldn’t agree more.
The EPA has a major contribution to make to these broader challenges of physical and virtual infrastructure development.
It commits both sides, when we are both ready, to explore new negotiations to open markets for areas like services and investment. Those will help create economic infrastructure.
But more immediately the deal also includes a programme of development cooperation funding for West Africa worth 6.5 billion euro, or about 1.4 trillion naira.
This funding will support infrastructure projects but also capacity building in the private sector and civil society. To give you just two examples:
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The fund will help companies here in Nigeria to meet international health, safety and environmental standards that are vital for access to world markets.
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And it will support the efforts of customs authorities to streamline their procedures so that border crossings don’t hold back growth.
***
We are all living through challenging times.
And addressing our challenges is never easy, whether we are in Nigeria or Sweden, where I come from. The most valuable reforms are always difficult by definition.
That’s because there are always those who will resist change because they believe they are personally better off under the status quo. But if we want to improve things, we need to be ready to take action even in the face of resistance like that.
Because it pays off for everyone in the long term.
I firmly believe that this Economic Partnership Agreement can offer great benefits for Nigeria. I hope that’s an opportunity you will seize.
Finally, I sincerely hope that this new administration will give a new impetus to the various domains of co-operation that do already exist between your country and the EU. The European Union is ready to play its part to strengthen our political and policy dialogue, to the benefit of our people.
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Local cross-border transporters lauded for embracing COMESA insurance scheme
The Common Market for Eastern and Southern Africa (COMESA) officials have lauded Rwandan cross-border transporters for embracing the yellow card scheme, noting that it has helped local logistics firms to reduce costs, and ease movement of goods and persons within the region.
Sindiso Ngwenya, the COMESA secretary general, said the number of subscribers under the scheme is growing annually, adding that the amount of claim compensations paid to road accident victims has also gone up.
“Through the yellow card scheme, COMESA has contributed to region’s competitiveness by reducing cross-border transport and transaction costs… It saves transporters and business community time and money,” he added.
This was in a speech read for him by COMESA’s Berhane Gidy during the group’s meeting on regional third party motor vehicle insurance in Kigali last week. The meeting attracted participants from all the 19 COMESA countries.
The yellow card scheme is a regional third party motor vehicle insurance scheme for medical expenses resulting from road traffic accidents caused by visiting motorists. It also offers emergency medical cover for the driver and passengers of foreign trucks involved in traffic accidents.
Speaking at the conference, Emmanuel Hategeka, the trade and industry ministry permanent secretary, said economic integration is essential to support the private sector, improve operations and ease cost of doing business. He added that COMESA has created a favourable legal, economic, political and social environment, “which opens up tremendous opportunities for business”.
Hategeka said major economic reforms have been implemented with the trade bloc, but called for more incentives to facilitate and attract more investments into the COMESA region. He argued that incentives are necessary to support the private sector as the engine of growth to hasten the pace of economic development in the region.
“I am happy to note that the insurance industry in the COMESA region has risen to the challenge and successfully implemented the third party motor vehicle insurance scheme,” he said. This scheme, which has been in operation for over 25 years, has significantly contributed to the facilitation of cross–border movement of vehicles, goods and persons within the region and hence fostering trade and investment.
Over 180 insurance companies are involved in the scheme and 200,000 motorists are using the card, enabling insurers to generate an annual premium income of $11 million.
“The yellow card scheme has made travelling across the border easier and has eliminated unnecessary delays at the border points and greatly contributed to the increase in intra-COMESA trade and tourism,” said Hategeka.
He said the government of Rwanda and other governments in the region are working to see COMESA, SADC (Southern Development Community) and East African Community (EAC) benefit of member countries in the tripartite region.
The lack of uniform systems inconveniencies cross-border transporters and increases the cost of doing business and, eventually, that of goods and services.
Hategeka said the implementation of the TFA should be expedited to remove such barriers to trade and allow transporters and travellers to move easily and economically within the tripartite area.
The proposed tripartite free trade area sets the stage for the creation of the single market of the 26 African countries in the eastern and southern African, with a combined population of 625 million people and a total GDP of over $1.2 trillion or about 58 per cent of Africa’s GDP.
COMESA is made up of Burundi, Djibouti, the DR Congo, Ethiopia, Kenya, Malawi, Rwanda, Uganda, Zambia, Zimbabwe, Sudan, Egypt, Comoros, Seychelles, Swaziland, Mauritius, Eritrea, Libya and Madagascar. SADC is made up of 14 members, including Tanzania, Malawi, the DR Congo and Lesotho.
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tralac’s Daily News selection: 5 November 2015
The selection: Thursday, 5 November
In Kinshasa, the curtain falls on 10th African Economic Conference (AfDB)
"The state should play a critical role in the transformation of economies. It has to be visionary, provide leadership in planning and execution and intervene when markets fail," participants said in a joint statement issued at the end of the three-day conference held under the theme "Addressing Poverty and Inequality in the Post-2015 Development Agenda." Addressing poverty and inequality, they argued, is central to achieving Agenda 2030 and the African Union's Agenda 2063. Policymakers, donor organizations and international economic policy planners agreed that nurturing of strong and inclusive developmental states and transformational leadership were essential for planning, implementing and monitoring development programs.
Smart measures required to weather commodity boom-bust cycles (AfDB)
Governments in Africa should put into place fiscal rules, sovereign wealth funds and other mechanisms to buffer their economies from the commodities roller-coaster, according to a new report issued during the 10th African Economic Conference by the United Nations Development Programme (UNDP). The report, Primary commodity booms and busts: emerging lessons from sub-Saharan Africa, was launched at the 10th Africa Economic Conference.
AEC: news items
Mutual review of development effectiveness in Africa (ECA-OECD)
This year’s 'Mutual Review of Development Effectiveness in Africa: promise & performance' highlights the significant progress on the part of African governments and their international partners in delivering their commitments to improve political and economic governance, increase domestic resource mobilisation as well as human development dimensions. The MRDE reports provide an in-depth review of the implementation of commitments in 19 individual topics organised around four broad pillars: sustainable economic growth (industry, trade, agriculture, infrastructure, the private sector, environmental sustainability and climate change); human development (education, health, food security and gender equality); good governance (political governance, economic governance and peace and security); financing for development (domestic public resources, foreign direct investment, development assistance, external debt and climate finance).
African Economic Outlook 2016: a preview (OECD)
Consequently, while we are generally aware that urbanisation profoundly transforms African societies, too little attention is paid to cities as actors of development and structural transformation. This is all the more important in Africa’s case since what we think we know about the link between industrialisation and urbanisation is challenged both by the diversity and uniqueness of the continent’s experiences. How? So what should proactive urbanisation policies look like in such differing contexts? What is the optimal size of mega cities before the costs of congestion exceed the benefits of agglomeration? How can multi-level governance be improved? How can the power of mayors be enhanced to deal with increasingly complex challenges on the ground? These are some of the issues that we explore in the forthcoming African Economic Outlook 2016.
Continental SPS Committee operationalised (AU)
The Sanitary and Phytosanitary Committee met at the Speke Resort, Munyonyo at the margins of the commemoration of the 6th Africa Day for Food and Nutrition Security. The meeting was convened to discuss the operationalization of the Committee and finalize and agree on its working Terms of References. The specific task of the Continental SPS Committee is to promote the mainstreaming of SPS issues (food safety, plant and animal health) into the Comprehensive Africa Agriculture Development Programme (CAADP) implementation and other agriculture, trade-related, health and environmental initiatives and frameworks.
UN debate on cooperation with 'all relevant partners, in particular the private sector' (UN News Centre)
Lise Kingo, Executive Director of the United Nations Global Compact Office, introduced the Secretary-General’s report titled “Enhanced cooperation between the United Nations and all relevant partners, in particular the private sector”. The report reflected the progress made by the United Nations in achieving organizational and development goals through collaboration with the private sector. Overall, the United Nations was becoming more adept at managing the risks of partnering with the private sector, both by improving due diligence and integrity measures, and by leveraging the Organization’s reputation and power to set standards.
Ms Chanda (Zambia), speaking on behalf of the Group of Landlocked Developing Countries, underscored the importance of partnerships in the implementation of the Sustainable Development Goals, as well as the achievement of the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014-2024. As countries with special challenges and vulnerabilities, the Group required enhanced partnership to establish secure transport systems to reduce trade costs and increase competitiveness on the international market. The Group would work with the private sector through the recently launched Global Partnership on Sustainable Transport, which was an important business-led, multi-stakeholder collaboration. It would also work with the Private Sector Partnership of the Inter-Agency Secretariat of the International Strategy for Disaster Reduction.
30 finance ministers in Kampala for UN economic summit (Daily Monitor)
About 30 finance ministers from across the world have confirmed attendance of the Development Co-operation Forum high-level symposium in Kampala. The event that started on Wednesday and ends on Friday, is hosted in collaboration with the United Nations Department of Economic and Social Affairs. “Particular attention will be placed on the challenges that Africa faces as a region. Promoting technology facilitation and capacity building, and addressing gaps in technology, science and innovation will also be central to the discussion.”
LDC Ministerial Conference 2015: Operationalizing ISID for LDCs - 'the path to graduation and beyond' (UNIDO)
The ministerial meeting (26-27 Nov) will bring together over 250 participants including LDC ministers, UN agencies, regional economic communities, emerging countries’ institutions, donors and private sector entities, in order to discuss the most optimal path to graduation and innovative ways to sustain structural change and capitalize on achievements. During the different sessions it is foreseen to have an overview of the IPoA implementation process and reflect on how ISID can be an implementing tool especially in the context of the new SDGs and more specifically SDG 9.
WTO updates: LDCs welcome progress on preferential treatment for services, Technical barriers to trade: reducing trade friction from standards and regulations
South African trade and investment updates:
SA’s AGOA benefits in peril? (IOL)
An announcement in Washington DC is imminent that South Africa could lose some of its benefits under the African Growth and Opportunity Act due to repeated missing of deadlines, which could result in the loss of thousands of jobs in key sectors. US Ambassador to South Africa Patrick Gaspard told Independent Media: “There is a recommendation (from the US Trade Representative) that has been advanced in Washington and which is making its way to President Obama. As a consequence of South Africa missing the last three critical deadlines, in the next few days we can expect the White House to possibly suspend some benefits that South Africa enjoys under AGOA.”
Minister Rob Davies: status report to Nedlac on trade negotiations
Cabinet approves initial services offer to grant preferential treatment to LDCs
Parliamentary Trade and Industry Committee recommends adoption of Protection of Investment Bill
Democratic Alliance: 'ANC rams anti-investment bill through committee'
South African lawmakers say MTN fine row risks Nigeria trade ties
Western Cape premier visits China to boost trade links
Zim-Mozambique trade rises to $725m (NewsDay)
Zimbabwe’s exports to Mozambique increased to $577m last year from $369m in 2013. Imports from Mozambique declined to $148m last year from $200m in 2013. [Zim imports 70% of its fruit (NewsDay)]
SACU: Namibia's repayments clarified (New Era)
The executive secretary of the Southern African Customs Union, Paulina Elago, answers questions on SACU payments to Namibia: Can we have a figure of how much SACU has overpaid Namibia, and how is Namibia expected to pay back the money? [Namibia benefits from Kwanza currency conversion agreement (New Era)]
Botswana: Diamonds aren't forever as mining boom fades away (Bloomberg)
“While success has been had in diversifying GDP and government revenues, we have not really done that well in exports,” Keith Jefferis, the managing director of advisory service Econsult and a former deputy central bank governor, said by phone from Gaborone. “That’s the biggest structural weakness. Diamonds have reached a plateau.” [Govt requests Japan to extend minerals surveying project (Mmegi)]
Mozambique's continental, European, US, regional and bilateral trade relationships: Part 3 of the SPEED series
Rwanda: IMF completes review mission
“Policy performance through end-June 2015 was consistent with the program framework, with almost all quantitative objectives reached. Significant progress was made on structural reforms, most notably on tax policy and administration. Planned reforms of the regime for agricultural taxes and for publishing quarterly reports on budget execution, however, are taking somewhat longer than originally anticipated. Looking forward, the risks to the economic outlook have increased, in light of lower global commodity prices and weaker growth prospects in Rwanda’s main export markets. Mining activity in Rwanda has already been affected, with exports for 2015 and the near term forecast to drop substantially. This will put pressure on the balance of payments and the mission expects economic growth in 2016 to moderate to 6-6.5%, compared to 7% as previously anticipated."
Rwandan cross-border transporters lauded for embracing COMESA insurance scheme (New Times)
The yellow card scheme is a regional third party motor vehicle insurance scheme for medical expenses resulting from road traffic accidents caused by visiting motorists. It also offers emergency medical cover for the driver and passengers of foreign trucks involved in traffic accidents. Speaking at the conference, Emmanuel Hategeka, the trade and industry ministry permanent secretary, said economic integration is essential to support the private sector, improve operations and ease cost of doing business. He added that COMESA has created a favourable legal, economic, political and social environment, “which opens up tremendous opportunities for business”.
Nigeria validates AU report on banking services in Nigeria (AU)
The one-day workshop for the validation of the report on banking services and Continental Free Trade Area consultation ended today in Abuja, Nigeria. The objective was to bring together various stakeholders in the banking services sector to review the findings of the draft report and contribute to its finalization. The workshop was also an opportunity to consult on the state of implementation of the Action Plan for Boosting Intra African Trade (BIAT) and Preparations for the CFTA Negotiations in Nigeria. Mr Merah noted that the service sector could provide an alternative engine of growth, enabling some latecomers to development to “leapfrog” what has been seen as the traditional manufacturing route to development. The Services sector accounts for an average 49% of GDP in the low income countries and 47% in the LDCs.
Africa Development Forum Series: 20 in 5 (World Bank)
AU, South Africa sign Nuclear Energy Commission host agreement (AU)
SADC Protocol on Gender, Development review starts (The Herald)
COMESA and Microsoft collaborate to promote access, skills and innovation in 19 African countries
Brazil faces critical moment to put economy back on track (OECD)
OECD Secretary-General Ángel Gurría presented the Economic Survey of Brazil and the Environmental Performance Review of Brazil in Brasilia during meetings with Brazil’s Finance Minister Joaquim Levy and Environment Minister Izabella Teixeira. This follows the launch on 3 November of the new OECD-Brazil Programme of Work, which seeks to further strengthen cooperation in various policy areas.
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30 finance ministers in Kampala for UN economic summit
About 30 finance ministers from across the world have confirmed attendance of the Development Co-operation Forum high-level symposium in Kampala.
It is expected to contribute to strengthening the global partnership for the benefit of people all over the world.
The event that started on Wednesday and ends on Friday, is hosted in collaboration with the United Nations Department of Economic and Social Affairs.
Announcing the event at the Uganda Media Centre recently, State minister for Finance (General Duties) Fred Omach said: “It will provide a platform for evidence based sharing and will ultimately produce concrete policy guidance on development cooperation post-2015, to put into practice at international, regional, national and local level.”
He added: “Particular attention will be placed on the challenges that Africa faces as a region. Promoting technology facilitation and capacity building, and addressing gaps in technology, science and innovation will also be central to the discussion.”
Implementing SDGs
Additionally, the symposium will also seek to provide answers to how countries, including Uganda, will align development cooperation policies and interventions to implement the Sustainable Development Goals (SDGs), as well as how to monitor and review the impact of development cooperation on the new sustainable development agenda.
The key role of the private sector and other non-state actors in development will also be explored.
President Museveni is expected to officiate at the symposium which will be co-chaired by the Finance minister and the Under-Secretary-General for Economic and Social Affairs, United Nations.
DCF Uganda High-level Symposium
“Development cooperation for a new era: Making the renewed global partnership for sustainable development a reality”
A new global agenda for sustainable development, the 2030 Agenda, and a financing framework have been agreed and adopted this year.
Development cooperation will be a main pillar of the global partnership for achieving the Sustainable Development Goals (SDGs).
The DCF Uganda High-level Symposium will provide a first opportunity for the range of actors to discuss development cooperation for the 2030 Agenda: ways to motivate, support and further shape development cooperation as a critical ‘means of implementation’.
The Symposium will focus on two overarching questions: How will we adapt development cooperation policies and interventions for implementing the SDGs? And how will we monitor and review the impact of development cooperation in advancing the new sustainable development agenda?
Particular attention will be placed on what this means in terms of challenges and opportunities for development cooperation in Africa.
The Symposium will produce concrete policy guidance on development cooperation to support the 2030 Agenda and financing for sustainable development. The deliberations will feed preparations for the 2016 high-level meeting of the Development Cooperation Forum and other functions of the United Nations Economic and Social Council, which has a major role in the follow-up of the 2030 Agenda at global level.
The Symposium will be held in Kampala, Uganda on 5-6 November 2015, with pre-meetings on 4 November.
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LDC Ministerial Conference 2015: Operationalizing ISID for LDCs – The path to graduation and beyond
The sixth edition of UNIDO’s Least Developed Countries’ (LDC) Ministerial Conference will be held in the context of the 2030 Agenda for Sustainable Development, from 26 to 27 November 2015 in Vienna, right before the 16th session of the UNIDO General Conference.
This LDC conference will connect over 250 participants including LDC ministers, and representatives from UN agencies, regional economic communities, institutions in emerging countries, donors and private sector entities. The participants will discuss the best path to graduation out of the LDC category and the innovative ways to sustain structural change and capitalize on achievements.
Background
The Istanbul Programme of Action (IPoA) adopted at the Fourth UN Conference on LDCs in Istanbul, Turkey in May 2011 constitutes an ambitious agenda by the international community with the overarching goal to overcome the structural challenges faced by the LDCs in order to eradicate poverty, achieve internationally agreed development goals and enable graduation from the LDC category. These priorities are mainstreamed into UNIDO’s vision and mandate (Budget doc., MTPF, etc.). Moreover, following the adoption of the IPoA and upon request from the Executive Board dated 29 June 2011, UNIDO developed an LDC Operational Strategy for the period 2012-2020 to provide a framework for UNIDO interventions in LDCs.
Furthermore, within the context of the post-2015 development agenda, and in order to address challenges faced by its Member States, The Lima Declaration, was adopted at the 2013 LDC Ministerial Conference and was further endorsed at the fifteenth UNIDO General Conference. It established the foundation for a new vision/tool “Inclusive and Sustainable Industrial Development” (ISID) and highlighted the crucial role of industrialization as a driver for development. While industrialization was not factored into the Millennium Development Goals framework, inclusive and sustainable industrialization now features strongly in the 2030 Agenda for sustainable development. Indeed, the UN summit on Sustainable Development Goals (SDGs) has confirmed as goal 9 “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”. This sanctions the provisions of the Lima Declaration and the relevance of ISID for the new global development architecture. As such, operationalizing ISID for LDCs will directly contribute to achieving some of the main goals set by the IPoA and anchor UNIDO at the forefront of the 2030 agenda for suitable development.
Thus, the sixth edition of UNIDO LDC ministerial conference will be held from 26 to 27 November 2015 and will take place at a defining moment in the history of global development cooperation. The meeting will aim at giving visibility and an extensive understanding to national stakeholders, including policy makers, on the importance to implement and mainstream “ISID” into national development policies, programmes and budget.
Furthermore, the 2015 LDC ministerial Conference will be entirely organized in close collaboration with the Office of the High Representative for LDCs, LLDCs and SIDS (OHRLLS), It is also foreseen that other UN organizations (e.g. UNCTAD, ITC, and ILO) will collaborate in organizing specific sessions of the Conference.
The ministerial meeting will bring together over 250 participants including LDC ministers, UN agencies, regional economic communities, emerging countries’ institutions, donors and private sector entities, in order to discuss the most optimal path to graduation and innovative ways to sustain structural change and capitalize on achievements. During the different sessions it is foreseen to have an overview of the IPoA implementation process and reflect on how ISID can be an implementing tool especially in the context of the new SDGs and more specifically SDG 9. Furthermore, sessions on the path to graduation and the direct correlation with industrialization and the mainstreaming of ISID into national policies will be held. The determinant role of partnership development and collaboration with regional initiatives will also be discussed, to finally address the question of sustainability and the way forward as well as financing solutions for LDCs development in the post 2015 era. Gender equality and balance will also be highlighted and debated as a cross cutting issue and topic in all sessions. Indeed, UNIDO recognizes and considers that gender equality and the empowerment of women have significant positive impacts on sustained economic growth and sustainable industrial development, which are drivers of poverty reduction and social integration.
Furthermore, a careful attention will be given to ensure gender balance and geographical diversity in Panels representation for the respective sessions of the conference.
Finally, the international community set an ambitious agenda built on past experiences and on the MDGs, which constitutes the strategic frame for development in the post 2015 Era. In order to ensure the successful implementation and operationalization of ISID and the new SDGs, innovative financial schemes must also be set in motion. The business model does not need to be reinvented, but rather evolve in adequacy with the needs to achieve the targeted goals. Development Financial Institutions (DFIs) like the World Bank or the Islamic development Bank for instance have anticipated this structural need by creating finance corporations directly attached to them. The conference will be a timely opportunity to offer a platform of discussion on this matter and introduce innovative business models and funds mobilization strategies that will be determinant for a successful implementation of the international agenda.
Objective of the Conference
The Ministerial Meeting will take place at a defining moment in the history of global development cooperation, as the international community has just endorsed an ambitious and universal 2030 agenda for sustainable development in September 2015. The UNIDO Ministerial meeting is uniquely positioned to create an opportunity for LDCs and their development partners to embark in an open dialogue to find a common understanding of how “ISID” can better integrate the key priorities, goals and targets of the IPoA and ensure that it reflect LDCs financing needs and graduation endeavor. The conference should also be a very good transition platform from the United Nations Summit in September 2015 towards the IPoA midterm review in June 2016 and lay the basis of future debates and discussions.
The Conference will also be the opportunity to further showcase the relevance of ISID as a major tool to assist LDCs in their path to graduation. Finally, the meeting will be a timely opportunity to assess and build upon UNIDO’s contribution to the implementation of the IPoA and to underline how ISID constitute a customized implementing instrument for SDG9.
Economic Commission for Africa and the African Development Bank jointly launch two reports
“Major economic progress is possible in Africa and can lead to improvement in the standard of living but we must work on structural transformation so that Africans can benefit from their economies,” declared Mr. Germaine Kambinga Katomba, Minister of Industry in the Democratic Republic of Congo during the joint launch of the Mutual Review of Development Effectiveness Report and the Africa Competitiveness Report.
Mr. Katomba said Africa has improved its competitiveness and has reduced inequality and poverty but its focus should remain on transformation that will have a tangible impact on these factors. Despite the growth many African economies experience, gender inequality, a fact which slows growth and productivity, persists, he said.
The minister was “happy to have confirmation from the two reports that industrialisation is one of the triggers of economic improvement. He concluded by launching an appeal to place African economies on the same footing as European economies and recognising their dynamism, which will also make them more competitive.
The Mutual Review of Development Effectiveness Report (MRDE), produced by the Economic Commission for Africa (ECA) and the Organisation for Economic Co-operation and Development (OECD) says Africa made achievements in democracy and good governance but is still struggling to attain structural transformation and industrialisation, explained Mr. Adam Elhiraika, Director of the Macroeconomic Policy Division at ECA.
Focusing on sustainable growth, investments in people, good governance and financing for development, Mr. Elhiraika, who moderated the launch said the report proposes a focused industrialisation and investments in manufacturing.
The African Development Bank (AfDB) and World Economic Forum’s African Competitiveness Report (ACR) concludes that Africa needs self-sufficiency and innovation to improve its competitiveness, said Ms. Audrey Verdier-Chouchane, Chief Research Economist at AfDB. The report proposes that the private sector has to be engaged in a new way and domestic resources need to be scaled up, she said.
The report also mentions environmental sustainability, climate change and debt sustainability as some of the areas which needed more work.
“We should build on infrastructure and services,” said Ms. Verdier-Chouchane, explaining the report found that productivity has declined in Sub-Saharan Africa in the past decade.
Commenting on both reports, Professor Frannie Leautier, Chief Executive of Mkoba Equity Fund, proposed that African economies aspire to “sustain growth, innovate and scale up”. “Access to financing and corruption are the leading forces in lack of competition,” she added.
The Mutual Review of Development Effectiveness Report is produced by the Economic Commission for Africa and the Organisation for Economic Co-operation and Development. The African Competitiveness Report is produced by African Development Bank and the World Economic Forum.
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