August 03, 2009
EU trade agreements undermine regional integration, says South African official
In their current form, the Economic Partnership Agreements (EPAs) between the European Union (EU) and the Southern African Development Community (SADC) would limit the SADC region’s policy space to promote industrial and agricultural development, would hamper efforts to promote trade diversification, and would undermine regional integration processes, a top official has said.
Speaking at the Southern African Forum on Trade, Department of Trade and Industry (DTI) international trade and economic development deputy director-general Xavier Carim said that South Africa was committed to addressing these issues with the EU and other members in the SADC and the Southern African Customs Union, however, it was clear that there was a need to develop a common approach to effectively address this.
“We also need to see a willingness from the EU to prioritise its professed concern to promote regional integration, not just in broad declaratory statements, but in detailed outcomes of the negotiating processes,” he added.
The SADC-EPA group, comprising Botswana, Lesotho, Namibia, Swaziland, Mozambique, Angola and South Africa, split in June over whether or not to sign the interim-EPA offered by the EU. Botswana, Lesotho, Swaziland and Mozambique moved ahead with the signing, despite objections from other members, including South Africa. One of the underlying principles of the EPA is that it should complement and support regional integration initiatives.
SADC members had now established five separate negotiating configurations, in relation to the EU. “Each of these configurations has different tariff dismantling obligations, the products that are covered are different, the timing for the tariff reductions is different, the products that are excluded are different, and all of this is going to certainly complicate and possibly foreclose efforts to foster deeper regional integration in SADC,” Carim explained.
He added that it would certainly mean strengthening customs controls and rules of origins controls within the region as a result.
He added that the main motivating factor of the EPA negotiations was to ensure World Trade Organisation (WTO) compatibility, however, the provisions contained in the agreement were beyond WTO compatibility.
Carim said that the EPA has also threatened the functioning of 99-year old Sacu.
“We already see that the commitments on the ‘new generation’ issues are in place and that is also going to complicate work in Sacu. But also, unless we are able to address the differences in the trade regimes under the South African free-trade agreement with the EU, compared to the EPA, with respect to the tariff regime and the rules of origin, we are going to see Sacu itself, the coherence of Sacu being undermined.”
In fact, Carim added that going forward, the more serious divisions were emerging with respect to the divisions that could emerge in new generation issues - those of trade in services, in procurement, in competition, in investment. Not sure what you are saying?
“Simply from the fact that before the region has been able to develop regional approaches and develop regional rules and markets in these areas, commitments will be undertaken vis-a-vis a third party, and that is going to make it more difficult for us to build regional integration in these areas,” he added.
Carim emphasised that, from the South African government perspective, Sacu had “enormous potential to move beyond an arrangement based solely on a common external tariff and held together by a revenue sharing arrangement”.
“Sacu’s main value is not as a captive market for South African exports, as it was under the Apartheid regime. But in the current global context, Sacu’s value will lie in its ability to be transformed into a vehicle for advancing and deepening integration at a sub-regional level; to act as an anchor in the SADC regional project; and also as a platform for harmonising engagement in wider global trade relations,” said Carim.
He added that owing to the way in which Sacu was already established, it could allow the potential to advance to a common market, and eventually, towards a monetary union.
In order for this to happen, member states would need to spend much more time building common policy in the area of trade and industrial policies.
“We need a work progamme to overcome the current policy deadlock that we currently face, and the zero-sum approach, by building production value chains across all member state in agriculture and industry,” stated Carim.
He said that the region would also need to intensify the programme of work around regional infrastructure. Work was under way but needed to be intensified, particularly based around the spatial development initiative that was said to have registered some successes already.
“The common policy vision is a pre-requisite for strengthening Sacu institutions, including the proposed Sacu Tariff board, the Sacu tribunal, as well as an effective and a well-resourced secretariat. Progressive harmonisation of various institutional arrangements will also need to be complimented by harmonisation of policies in the areas of competition and standards over time,” emphasised Carim.
It was felt that Sacu could also act as an anchor for deeper integration in the SADC.
“For Sacu to realise its potential we also need some common understanding on how to position ourselves in a rapidly changing global economy. Shifting patterns of global trade, the rise of new economies require that we look beyond immediate and short term trade relations, to developing mutually beneficial trade relations with the new sources of global economic growth in the global economy,” noted Carim.
Common approaches to trade negotiation was viewed as vital, and Sacu members have agreed to hold strategic discussion at the next council meeting to take this issue forward.
“If we are not able to move along these lines, Sacu runs the risk of being stuck in a policy gridlock, and remaining what it has always been - a customs union structured around a revenue sharing arrangement that will be steadily rendered ineffectual by global developments beyond its control,” argued Carim.
He said that Sacu was “at something of a cross roads”, and either needed to move forward, in a more co-ordinated and harmonised way, or, find itself increasingly ineffectual.
Engineering News
August 01, 2009
US chamber embarks on trade mission to East Africa
The US Chamber of Commerce’s Africa Business Initiative (ABI) launched a trade mission to four African countries and the annual African Growth and Opportunity Act (AGOA) Forum this week (July 30) in order to meet with senior government and business leaders to explore trade and investment opportunities.The trade mission includes stops in Johannesburg, South Africa; Dar es Salaam, Tanzania; Nairobi, Kenya; and Addis Ababa, Ethiopia. The trip is being anchored by the AGOA Forum which will be held in Nairobi, Kenya on 4-6 August.
“U.S. companies see Africa as a continent of great opportunity,” said Scott Eisner, executive director of ABI. “With more than one billion people, it is an important market for American products. The Chamber’s members are interested in investing in African markets and employing African workers to produce products to sell throughout the continent.”
The Chamber’s Africa Business Initiative was created to engage the US business community on policies that foster foreign direct investment in Africa and to facilitate new and expanded trading relations between the US and African countries.
The US Chamber is the world's largest business federation representing more than 3 million businesses and organisations of every size, sector, and region.
“U.S. companies see Africa as a continent of great opportunity,” said Scott Eisner, executive director of ABI. “With more than one billion people, it is an important market for American products. The Chamber’s members are interested in investing in African markets and employing African workers to produce products to sell throughout the continent.”
The Chamber’s Africa Business Initiative was created to engage the US business community on policies that foster foreign direct investment in Africa and to facilitate new and expanded trading relations between the US and African countries.
The US Chamber is the world's largest business federation representing more than 3 million businesses and organisations of every size, sector, and region.
World trade system starting to work again - Lamy
by Ed Cropley
A $250 billion financial package to revive a global trading system crippled by the credit crisis is starting to bear fruit, especially in Asia, the head of the World Trade Organisation (WTO) said.
"Oil is (returning) to the various mechanisms of world trade," WTO Director-General Pascal Lamy said in an interview in South Africa. "My sense -- but it's a qualitative feeling at this stage -- is that notably in regions like Asia, because countries like China stepped in very vigorously, things are picking up," he said.
Despite this cautious optimism, Lamy said the Geneva-based body was maintaining its forecast of a 10 percent contraction in global trade this year as a result of world recession and the freeze-up in trade credit precipitated by financial crisis. Lamy also said WTO members acknowledged South Africa's argument for special treatment in the current Doha round of trade talks because of relatively deep cuts in industrial tariffs made under apartheid, which ended 15 years ago.
During white minority rule, South Africa was treated in trade terms as a developed country, rather than the developing status it now enjoys. "South Africa had to take, at the time, tariff reductions commitments that were more stringent than other developing countries," Lamy said. "This is recognised. South Africa will, at the end of the negotiations benefit from specific flexibilities. That's now recognised. How much of that is still to be negotiated," he said.
The Doha round of talks to draw up a new framework for world trade were launched in Qatar in 2001 specifically to help poor countries. However, a meeting collapsed a year ago and little progress has been made since then, with fundamental disagreements about farming subsidies and the United States and big emerging countries such as China and India pitted against other. In the last 12 months, political leaders across the spectrum have talked at length of the need to revive the talks, leading Lamy to say the goal of wrapping up the mammoth negotiations some time next year was "do-able."
Diplomats and trade experts in Geneva are now on the northern hemisphere summer break, but Lamy said he expected renewed energy come September, especially since an apparent rapprochement between Washington and New Delhi.
"From September on, following a number of positive political signals, notably from the U.S. and India, my hope is that ... the negotiating activity will move up," he said, adding that the technical issues of concluding such a complex series of negotiations would remain a challenge. He also said all WTO members, including the United States, accepted the need for major cuts in cotton subsidies.
The so-called C4 West African countries of Benin, Burkina Faso, Mali and Chad argue the U.S. subsidies depress world prices and rob their farmers of export sales. "Everybody knows that cotton trade-distorting subsidies will have to be very substantially reduced. The U.S. know that. It's just a question of when they confront their domestic constituency," Lamy said.
U.S. trade representative Ron Kirk said Washington would only cut its annual support to U.S. cotton farmers as part of a wider deal whereby developing countries such as India and China opened up to U.S. cotton exports. The issue is likely to feature prominently on an upcoming trip by Kirk to Kenya, Ethiopia and Senegal.Reuters
A $250 billion financial package to revive a global trading system crippled by the credit crisis is starting to bear fruit, especially in Asia, the head of the World Trade Organisation (WTO) said.
"Oil is (returning) to the various mechanisms of world trade," WTO Director-General Pascal Lamy said in an interview in South Africa. "My sense -- but it's a qualitative feeling at this stage -- is that notably in regions like Asia, because countries like China stepped in very vigorously, things are picking up," he said.
Despite this cautious optimism, Lamy said the Geneva-based body was maintaining its forecast of a 10 percent contraction in global trade this year as a result of world recession and the freeze-up in trade credit precipitated by financial crisis. Lamy also said WTO members acknowledged South Africa's argument for special treatment in the current Doha round of trade talks because of relatively deep cuts in industrial tariffs made under apartheid, which ended 15 years ago.
During white minority rule, South Africa was treated in trade terms as a developed country, rather than the developing status it now enjoys. "South Africa had to take, at the time, tariff reductions commitments that were more stringent than other developing countries," Lamy said. "This is recognised. South Africa will, at the end of the negotiations benefit from specific flexibilities. That's now recognised. How much of that is still to be negotiated," he said.
The Doha round of talks to draw up a new framework for world trade were launched in Qatar in 2001 specifically to help poor countries. However, a meeting collapsed a year ago and little progress has been made since then, with fundamental disagreements about farming subsidies and the United States and big emerging countries such as China and India pitted against other. In the last 12 months, political leaders across the spectrum have talked at length of the need to revive the talks, leading Lamy to say the goal of wrapping up the mammoth negotiations some time next year was "do-able."
Diplomats and trade experts in Geneva are now on the northern hemisphere summer break, but Lamy said he expected renewed energy come September, especially since an apparent rapprochement between Washington and New Delhi.
"From September on, following a number of positive political signals, notably from the U.S. and India, my hope is that ... the negotiating activity will move up," he said, adding that the technical issues of concluding such a complex series of negotiations would remain a challenge. He also said all WTO members, including the United States, accepted the need for major cuts in cotton subsidies.
The so-called C4 West African countries of Benin, Burkina Faso, Mali and Chad argue the U.S. subsidies depress world prices and rob their farmers of export sales. "Everybody knows that cotton trade-distorting subsidies will have to be very substantially reduced. The U.S. know that. It's just a question of when they confront their domestic constituency," Lamy said.
U.S. trade representative Ron Kirk said Washington would only cut its annual support to U.S. cotton farmers as part of a wider deal whereby developing countries such as India and China opened up to U.S. cotton exports. The issue is likely to feature prominently on an upcoming trip by Kirk to Kenya, Ethiopia and Senegal.Reuters
Tanzania says EAC likely to delay trade pact with EU
Tanzanian Minister of Industries, Trade and Marketing Mary Nagu has said that the East African Community (EAC) bloc is likely to delay signing a new trade deal with the European Union because fresh issues have been introduced in the negotiations.
Negotiations on the Economic Partnership Agreement (EPA) are meant to be concluded this month, but that will not be achieved because of EU introduced other voluntary trade-related issues, Nagu was quoted by a local newspaper as saying.
She said that the issues included government procurement, environment and sustainable development, which the EAC member states, including Tanzania, do not agree with as they are yet to be agreed on under the World Trade Organization (WTO). The EPA aims to replace current preferential arrangements that have been struck down by the WTO.
Tanzania has joined the pact negotiations to benefit from cooperation on development and the economy and gain financial and technical aid to improve its productivity and export potential. Tanzanian exports to other East African Community countries rose by 83 percent in 2008 to 316 million U.S. dollars compared with the previous year.
The five EAC members, Kenya, Uganda, Tanzania, Rwanda and Burundi, are among nearly 80 countries of the Africa, Caribbean and Pacific group in talks on a new pact with the EU, the report said. The East African bloc has a combined gross domestic product of 60 billion U.S. dollars and a population of just over 126 million. It already has a customs Union and plans to have a common market next year.
Negotiations on the Economic Partnership Agreement (EPA) are meant to be concluded this month, but that will not be achieved because of EU introduced other voluntary trade-related issues, Nagu was quoted by a local newspaper as saying.
She said that the issues included government procurement, environment and sustainable development, which the EAC member states, including Tanzania, do not agree with as they are yet to be agreed on under the World Trade Organization (WTO). The EPA aims to replace current preferential arrangements that have been struck down by the WTO.
Tanzania has joined the pact negotiations to benefit from cooperation on development and the economy and gain financial and technical aid to improve its productivity and export potential. Tanzanian exports to other East African Community countries rose by 83 percent in 2008 to 316 million U.S. dollars compared with the previous year.
The five EAC members, Kenya, Uganda, Tanzania, Rwanda and Burundi, are among nearly 80 countries of the Africa, Caribbean and Pacific group in talks on a new pact with the EU, the report said. The East African bloc has a combined gross domestic product of 60 billion U.S. dollars and a population of just over 126 million. It already has a customs Union and plans to have a common market next year.
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