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Building capacity to help Africa trade better
tralac Newsletter • Issue 29 • April 2021

Welcome to the tralac newsletter


The International Monetary Fund’s recently published Regional Economic Outlook for Sub-Saharan Africa presents a stark reminder of the severe socio-economic impact of the COVID-19 pandemic. Current estimates indicate that the sub-Saharan African economy shrunk by 1.9% in 2020. Uncertainty surrounds the near-term prospects for recovery and the global pandemic still holds many risks. It’s unclear when continent-wide access to vaccines will be a reality. Availability of external finance, political stability and climate-related crises are also noted as sources of uncertainty. Despite these concerns, the report emphasises the potential of sub-Saharan Africa, and the importance of revenue mobilisation, trade integration, digitisation, competition, governance improvements and climate change mitigation to support transformation, diversification and resilient growth. A notable statistic is that every day 90 000 new users connect to the internet for the first time. This impressive growth in the number of internet users presents opportunities for the continent’s digital transformation. The need for investment, in particular private investment, to transform Africa’s economies, requires improving the investment climate, improving access to reliable energy services, reducing red tape and expanding financial inclusion.
 
The African Continental Free Trade Area (AfCFTA) is recognised as holding particular promise for the African continent. To achieve the promise of this continent-wide integration initiative, it is important to complete the outstanding phase 1 negotiations, focusing on tariff concessions and rules of origin, for trade in goods, and specific commitments for the five priority services sectors (financial, transport, communication, professional services and tourism). Phase 2 and 3 negotiations will cover investment, competition policy and intellectual property rights, and e-commerce. Effective implementation of all the legal instruments that comprise the AfCFTA compact is essential. Lack of implementation has been an important constraint to the achievement of the objectives of Africa’s other trade and integration arrangements. The AfCFTA provides an opportunity to changes this trajectory, but without concerted political commitment and practical programmes to support implementation, there is no guarantee. The AfCFTA institutions can and will have to play an important role to this end. In this Trade Brief we focus on the role of the AfCFTA Secretariat. The roles and responsibilities will be determined by the Council of Ministers of the AfCFTA; hopefully the Secretariat will become an innovative and progressive institution for the AfCFTA.
 
The AfCFTA is expected to attract investment both cross -border investment from one State Party to another, but also from global investors. This could serve to support economic recovery and transformation post-COVID-19, to diversify and enhance Africa’s productive capacity.
 
We’re pleased to share with you a set of publications related to the negotiations of the Protocol on Investment.

Investment matters are not new to the international economic governance agenda, but there is still no comprehensive multilateral investment treaty. Bilateral investment treaties, international investment agreements and investment provisions or chapters in regional trade agreements have provided for the governance of investment issues. What can we expect from the Investment Protocol?

The AfCFTA is a member-driven arrangement and the provisions in the AfCFTA indicate that a cooperation model will be adopted for the phase 2 issues, including investment. The investment negotiations will include careful consideration of matters related to national policy space and the right to regulate investment at national level. The Protocol should include principles and institutions to promote a continent-wide integration arrangement and ensure the advancement of necessary national investment facilitation and governance regimes. Current focus on investment facilitation is important, and should feature prominently in the negotiations agenda, to effectively address the matters of governance related to investment. Effective legal remedies through dispute settlement procedures exercised by independent judicial forums will be required. Domestic courts (or tribunals) will have jurisdiction over disputes involving private investors that have established a commercial presence in a particular state. Access to domestic courts will be available to investors from third parties too. This will have an important investment facilitation and governance implication. Private firms are the main actors when it comes to trade in goods and services and when investment is at stake. Their rights and legitimate expectations should be protected via appropriate investment facilitation provisions. Investors should enjoy due process rights and there should be enforceable rights to transparency and non-discriminatory treatment.

These publications deal with the AfCFTA Investment Protocol:
 Updates from tralac
 
We’re pleased to share with you details of the 2021 Development Programme for the SheGovernsTrade programme. The first training course for the 2021 intake was held from 12 – 16 April. The course covered technical trade issues, trade data analysis, an update on the AfCFTA and trade and gender provisions in Africa’s trade and integration arrangements. We also had a session where tralac’s women alumni shared their career development experiences – an inspiring session!

We’re pleased to introduce you to the Class of 2021.
 
The 2021 tralac Certificate: International Trade Law and Policy for Africa’s Development starts on 19 April. The intake brings together a very diverse group of participants – highlighting that offering a blended learning course, anchored on a virtual classroom modality, is making the course accessible to an audience from across the continent. We’ll keep you posted on other short courses that we’ll be offering in the near future.

 
We look forward to your feedback.
 
The tralac Team
19 April 2021

Recent blogs

 

Design and Architecture of the AfCFTA Investment Protocol. The international legal instrument to be adopted as the AfCFTA Protocol on Investment will constitute a binding international agreement for the AU Member States that have ratified this instrument and for whom it has entered into force... read more
 
The International Regulation of Investment is not a recent Phenomenon. Investment matters have been on the international agenda for a long time, but there is no multilateral investment treaty. The world has become much more interdependent and the need for the proper regulation of foreign direct investment (FDI) has increased. This matter is also on the AfCFTA agenda... read more

How will the AfCFTA Investment Protocol work? International investment agreements (IIAs) are international legal instruments that address issues relevant to cross-border investments, usually for the purpose of protecting, promoting, and liberalising investments. The Investment Protocol of the AfCFTA will be an IIA of a specific kind... read more
 
Regional Economic Communities and the AfCFTA Investment Protocol. The legal regimes of the eight Regional Economic Communities (RECs) recognised by the AfCFTA Agreement as building blocks of the African Continental Free Trade Area will not disappear when the AfCFTA is implemented. Investment regulation and facilitation in Africa will, to the extent provided for, be governed by the relevant REC arrangements... read more
 
Exploring Southern Africa’s battery mineral potential. Almost all of the emerging green economy’s high-demand minerals are found in abundance in Southern Africa. The unprecedented boom in demand for green minerals is producing a corresponding surge in mining opportunities in the region. But movement further up the lithium-ion batteries (LIB) value chain faces formidable hurdles... read more
 
Cameroon signs an Interim Economic Partnership Agreement with the United Kingdom. On the 9 March 2021 in London, an Interim Economic Partnership Agreement (IEPA) between the Republic of Cameroon and the United Kingdom of Great Britain and Northern Ireland was signed. What market access has been offered by the UK to the Republic of Cameroon?... read more

VIEW ALL BLOGS

New Publications

Trade Briefs

The AfCFTA needs an active and innovative Secretariat
 
Secretariats are standard features of African regional integration arrangements. This will be true of the African Continental Free Trade Area (AfCFTA) too. The extent of all the powers and functions of the AfCFTA Secretariat is not yet fully known, but from the design of the AfCFTA it is clear that the Secretariat will be responsible for essential tasks. It should enjoy the powers and space required for advancing and promoting the AfCFTA’s ambitious agenda. It will in many ways differ from the regional economic community (REC) secretariats.

READ MORE

More recent Trade Briefs

 

São Tomé and Príncipe in the times of COVID-19

Least Developed Countries (LDCs) and Small Island Developing States (SIDS) are projected to be severely affected by the COVID-19 pandemic and the ensuing lockdown. São Tomé and Príncipe is one such country.

The Automotive Components Trade in Africa: Its Place and Potential (2021 Update)

At present, Africa is largely dependent on the rest of the world for automotive component imports, with the exception of the contribution of South Africa. In order to reduce dependence, deepen industrialisation and enable technology and skills transfer, Africa needs a continent-wide industrial policy logic for the automotive sector.

Road Transport Regulatory Challenges in ESA Region: Progress Review of the Tripartite FTA and the Tripartite Transport and Transit Facilitation Programme

Cross-border road transport faces numerous barriers which impede seamless and efficient movements and trade flows. There are, however, a few significant initiatives and programmes which have potential to address some of the road transport regulatory issues in the Eastern and Southern Africa (ESA) region.

VIEW ALL TRADE BRIEFS

Working Papers

An Investment Protocol for the AfCFTA
 
The negotiations on an AfCFTA Investment Protocol provide an opportunity to adopt an instrument suitable for Africa’s needs. Far-reaching changes in the industrialisation landscape, new technological developments, the consequences of Covid 19, and the fact that individual African States are keen to promote their own countries as attractive destinations for Foreign Direct Investment (FDI), will have to be weighed. This Working Paper discusses issues related to an AfCFTA Investment Protocol. It notes caveats that should be considered. New trends regarding investment regulation are also mentioned.

READ MORE

Trade remedies can offer export opportunities to unrelated parties: the case of the US-EU large aircraft dispute and opportunities for South Africa’s wine exports to the US
 
Trade remedies and safeguards are key exceptions to the World Trade Organisation (WTO) principles of non-discrimination and transparency through binding commitments, including on tariffs, and can broadly take the form of anti-dumping, countervailing and safeguard measures. Each of these measures fulfils a different purpose and represents a permitted response by countries to different trade-related threats.

This Working Paper reviews recent developments in the large civil aircraft dispute and outlines how the resultant trade remedies cover products in industry sectors not related to the underlying dispute, and how new punitive tariff barriers to trade in affected products can potentially have impacts – and provide opportunities – for producers and exporters in third countries. More specifically, the focus is on trade remedies against certain wine tariff lines, impacts on trade flows since the imposition of trade remedies, and the potential opportunities that this may provide South African wine exporters, given the particularly favourable preferential market access that South Africa enjoys to the US market.

READ MORE

More recent Working Papers


Import Restrictions: Namibian Court clarifies Rights of Private Parties

State Parties’ trade-related rights and obligations are derived from international agreements. Governments’ implementation of trade agreements involves domestic measures taken by public officials. This paper analyses two recent judgments by the Courts of Namibia, involving Matador Enterprises (Pty) Ltd and the Ministry of Trade and Industry and Others. The paper begins with an introduction to the position of private parties within the context of international remedies against unlawful acts by foreign States.

A brief assessment of the South African Draft One-Stop Border Post Policy

On the last day of December 2020, the South African Department of Home Affairs published two draft policies for public comment. The one is a Draft One-stop Border Post Policy, the other a Draft Official Identity Management Policy. This paper is aimed at the Draft OSBP Policy. The Policy is to be welcomed because talk and decisions about border management in South Africa have a running history with slow results amidst ever-stuttering border control, shown up in extreme fashion by the Covid-19 pandemic.

VIEW ALL WORKING PAPERS

Regional Resources


African Continental Free Trade Area (AfCFTA)

 

Start of trading under the AfCFTA African Continental Free Trade Area (AfCFTA) Agreement began on 1 January 2021. To date, 36 countries have both signed and deposited their instruments of AfCFTA ratification with the AUC Chairperson. Of the 55 AU member states, only Eritrea has yet to join.

LINKS


TARIFF OFFERS

AfCFTA Goods Tariff Liberalisation Schedule: Tariff offers and proposed time frame for tariff phase down under the AfCFTA Agreement
 
South Africa
Mauritius
Egypt
ECOWAS
CEMAC
SACU
EAC
 

More resources

 

tralac maintains a collection of regional and national trade-related resources including copies of the texts and annexes of regional and bilateral trade agreements, copies of various regional protocols, memoranda of understanding and tariff offers, and copies of national legislation and trade-related policy documents.

The following documents are now available to download:

VIEW ALL TRALAC REGIONAL AND CONTINENTAL RESOURCES

Please note: Free registration is required to download resources.

Latest AGOA news

Other news and announcements

Key trade stats for AGOA beneficiaries for the year to end Feb 2021 / 2020
 

 
2020 to February
2021 to February
% Change
Aggregate exports to US: $ 3.00 billion $ 3.52 billion + 17%
- - (Share) of AGOA exports: $ 733 million $ 723 million - 1.3%
Total US import duties paid on imports from AGOA beneficiaries: $ 9.4 million $ 7.5 million -21%
 
Top 5 Exporters 2020 YTD Feb exports to US 2021 YTD Feb exports to US Change 2020/21
South Africa 279.38 334.5 19.73%
Nigeria 93.83 99.74 6.30%
Kenya 92.33 72.67 -21.29%
Lesotho 53.77 43.54 -19.03%
Ethiopia 47.49 38.59 -18.73%
All AGOA countries $733m $723m -1.3%
 

US imports cleared under AGOA were down 1.3% in the year to end February 2021, compared to 2020. Amongst the leading AGOA ‘exporters’, South Africa’s year-on-year trade grew by almost 20%, cementing its position as the leading exporter of AGOA goods. The key driver for this performance is strong export growth in motor vehicles (+65% yoy) and articles of jewellery (+134% yoy), the two leading exports from South Africa that utilise AGOA preferences. Kenya, Lesotho and Ethiopia each recorded lower garment exports during the first two months of 2021 compared to 2020.

2021 Trade Policy Agenda and 2020 Annual Report
 

During March 2021, the USTR under the Biden Administration launched its 2021 trade policy agenda and 2020 annual report (download it here). This 308-page document includes sets out key priorities, including ‘the development and reinforcement of resilient manufacturing supply chains, especially those made up of small businesses, to ensure that the United States is better prepared to confront future public health crises’. Covid-19 and economic recovery from its impacts are central themes. Another priority involves trade policies to address opportunities and challenges posed by the digital economy, and to prepare the US for any potential future disruptions to the global trading system. The opening of markets and reduction of trade barriers faced by US exporters are fundamental objectives, since “export-oriented producers, manufacturers, and businesses enjoy greater than average productivity and wages”.
 
The document also provides and overview of current trade negotiations, concluded negotiations, and existing trade agreements already in place.
 
Other matters addressed by the report include the US’ trade enforcement activities, WTO matters, trade policy development and a range of other trade related activities (digital trade, intellectual property, trade and labour, trade capacity building – including in Africa – and so forth).

AGOA Business Connector

The AGOA Business Connector is an online facility on AGOA.info to help enable trade and business connections between producers, exporters, importers, sourcing agents, trade-related service suppliers including trade finance, logistics and related services, support organisations (such as business chambers and exporter associations and others), both from within sub-Saharan African AGOA beneficiary countries and the United States. Registered users are also able to list their businesses or professional trade-related service on the platform, and to communicate with other listings through a messaging facility.

> Download the AGOA Business Connector Brochure at this link

Download: AGOA guides and info-graphics

tralac has produced a number of info-graphic type brochures (see section on AGOA.info / Exporter Toolkit) covering a range of AGOA-related topics, including on AGOA’s legal provisions with regard to eligibility and annual/out of cycle reviews, rules of origin, AGOA FAQs, sector-focused brochures (textiles and clothing, agriculture), as well as national AGOA brochures relating to Botswana, Ethiopia, Ghana, Kenya, Lesotho, Madagascar, Mauritius, Namibia, Nigeria, South Africa and Tanzania.
 
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