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tralac Newsletter • Issue 24 • October 2020

Welcome to our newsletter for October 2020. In this newsletter we focus on matters related to trade and trade-related data. Availability of good quality trade data is essential to the work we do at tralac. All tralac’s experts, including our international trade lawyers, work with trade data. All our training courses also include modules on trade data analysis. This facilitates inter-disciplinary analysis of trade developments, and makes for interesting conversations between our lawyers and economists. Initially we purchased data from commercial sources – the quality and availability of consistent trade data in the public domain had very serious limitations, or simply was not available. The situation has improved considerably in recent years, and we now use data available in the public domain. But of course, there are still gaps and challenges, and data has to be scrutinised carefully. When we hosted our Annual Conference in Lusaka, Zambia in 2015, we had a meeting with officials from the Trade Ministry and shared with them analyses we had done using trade data available in the public domain. We were puzzled by the considerable exports of copper to Switzerland. An official explained that the exports were actually destined for China, but the importing company was registered in Switzerland, and that the customs authority had captured this data!

Our current interns are contributing to this month’s newsletter. They all have a trade law background. As part of the internship programme, which we have been offering virtually since April because of the pandemic, they have completed a trade data analysis module, and become proficient in the sourcing, analysis and interpretation of trade data. We look forward to your feedback on their analysis.
 
With best wishes from the tralac team

Trade data matters


Reliable, accurate and accessible trade and trade-related data is not only important for sound policy-making decisions, good business decisions, and effective trade negotiations; data is also vital to monitor the implementation of the African Continental Free Trade Agreement (AfCFTA). Historically, many African countries have performed rather poorly when it comes to the accessibility and accuracy of trade and related data. While notable progress has been made, there is still scope for improvement.  

Trade-related data includes not only recorded values and volumes of goods trade among countries, but also data on services trade, non-tariff measures and barriers, tariffs, informal trade, trade restrictiveness, macro-economic conditions (like gross domestic product), micro-economic data (industry/firm-level data including employment, sales, profits and prices) and investment. This data is utilised by governments to make public policy decisions including the formulation of industrial, agriculture, trade and economic growth policies, strategies and regulations; trade negotiations strategies; merger and acquisition reviews; assessments of anti-competitive practices and determinations in trade remedy cases and applications for changes in tariffs. Businesses use trade information, such as tariffs in destination markets, applicable non-tariff measures, transportation costs and trade restrictiveness in combination with macro-economic indicators, firm-level data and market information to make investment, trade and market development decisions, and also to lodge trade remedy and tariff review applications and to inform their participation in public-private forums.
 
Once the AfCFTA is implemented, data will be vital to analyse overall trade and macro-economic, business and market performance to determine the impact of the agreement on Africa’s economic growth and development and determine whether the agreement is successful in attaining its objectives.
 

What are some of the improvements in data and information over the last decade?

Although trade and trade-related data has various uses, it needs to be useful, reliable and accurate information which is publicly available (except in the case of confidential information). This is the area where most African countries have historically fallen short although there has been some significant progress over the last decade. Initially, African trade data was only available on subscription databases and only for a select number of countries (like South Africa, Kenya and Egypt) and limited to trade in goods. There was a lack in published tariff schedules and data pertaining to non-tariff measures, investment, informal trade and services. In recent years, the availability of some data has improved significantly, especially for goods trade.

  • African countries are now increasingly publishing their statistics on websites of national statistics authorities and notifying their national data to the United Nations (UN). This data includes data on formal goods trade, aggregate services trade, non-tariff measures, tariffs, investment and some market information. The quality of the data has also improved as most countries now extensively verify the data prior to publication and submission. Increased access enables organisations like the World Bank, the World Trade Organisation (WTO) and International Trade Centre (ITC) to obtain, collate and publish trade data in databases like the ITC TradeMap and MacMap and the WTO trade portal.

  • As part of the implementation of the WTO Trade Facilitation Agreement, many countries are establishing trade portals. Southern and eastern African countries that already have functioning portals include Seychelles, Eswatini, Kenya, Rwanda and Uganda. Some portals contain detailed information on import and export requirements by specified product, sanitary and phytosanitary requirements, port of entry and applicable tariffs. The trade portals of countries in east Africa, including Uganda and Rwanda provide details of import or export processes including the trade costs such as inspection charges, and indicate the waiting time to complete the different steps.

  • Once fully operational, the African Trade Observatory (ATO) will contribute significantly to the availability of African trade data and capacity building. The ATO will collect and analyse trade and trade-related qualitative and quantitative data and information, establish a database for African trade; monitor implementation and evaluate the implementation process and impact of the AfCFTA and the Action Plan for Boosting Intra-Africa Trade (BIAT); and equip national governments and businesses to analyse and use of trade and related data.

  • There is increasing awareness of the effect of non-tariff barriers (NTBs) on intra-Africa trade. More information is available in the public domain through industry/product/sector studies, the trade cost database of the World Bank and the online non-tariff barrier mechanisms of the COMESA-EAC-SADC Tripartite Free Trade Area, the Borderless Alliance (west Africa) and the new AfCFTA mechanism.

  • Informal trade is recognised as a major component of intra-Africa trade and this is not captured in formal trade statistics. There are a number of initiatives to gather data on informal cross-border trade (ICBT), including studies by UNECA and ongoing work by the Bank of Uganda which has been conducting surveys and reporting ICBT data since 2005.

Although there have been improvements in intra-Africa trade data, there is room for improvement.
 

Trade in goods

There are still some African countries that either do not report their trade data or whose reported data is out of date. This results in databases using partner-country data (mirror statistics). This has specific shortcomings including that other non-reporting countries are still not included in the data; transhipments can mask the source of supply; and different valuation of imports and exports can lead to significant inconsistencies in the data. There are also other problems that can impact the quality of the data – re-exports/re-imports being reported as actual imports or exports, and unspecified trade. Unspecified trade data (data not elsewhere specified) is reported as such for various reasons including reporting errors, confidential transactions or different commodity classifications. Countries are also increasingly using unique national tariff codes (HS98) to classify trade of more sensitive goods, like motor vehicle component parts. At the aggregate levels of data this is not comparable among countries, so it is specified as trade in unspecified commodities or trade with unspecified destinations in the databases.

Although a number of survey projects are currently underway to record informal trade in specific sub-regions of the continent, these projects are limited as they are time and resource intensive. For this data to be useful, the data must be recorded over a period. The Bank of Uganda’s survey work provides very useful guidance to improve data for this important category of trade.
 

Trade in services

Both the ITC and WTO include some services data in their databases; however, this data is highly aggregated and there is no bilateral or intra-Africa services trade data available for African countries. The World Bank has a services restrictiveness index to identify some of the policy measures which restrict services trade; however, once again this is high level data, South Africa is the only African country included and the data is only up to 2016.
 

Other challenges

  • More countries’ tariff schedules are now available via different databases; however, these are mostly the MFN applied tariff schedules and often preferential tariffs are not published. Furthermore, tariff schedules are often published in a format which is not usable for analysis.

  • Other data, including for trade in services, investment and market information is not available at the same level of detail as for goods trade. As trade agreements are increasingly covering aspects such as services, industrial development, investment, competition and infrastructure, detailed information and data covering these areas is vital.

  • Firm- and industry-level data, including price, production and consumption data is still not available in the public domain; it is only available via subscription services. Some of this data is classified as confidential and is not available in the public domain.

Out-of-date data is one of the biggest challenges for intra-Africa trade and related analysis. The collection, collation and publication of data and related information must be an ongoing process to be of significance for analysis and policy making. Some data collection or research projects are just once-off or come to an end due to lack of funding and technical capacity. Data collection is an intensive process requiring human, financial and technological skills, capacity and capabilities; some data can only be collected via surveys (for instance informal trade) and in some instances data might still be collected and stored in paper format. Such data is often in raw format and must be processed and stored in an accessible digital format. National and regional resources and capacity building are required to improve not just the availability of intra-Africa data, but also the quality and reliability of the data to facilitate the implementation of the AfCFTA and conduct sensible analysis of the said implementation.

 

Trade data analysis assignment for the tralac internship programme

 

The tralac internship programme offers African graduates, with a background in trade-related disciplines, an opportunity to gain a better understanding of international trade matters, and an opportunity to contribute to the inter-disciplinary (trade law and economics) analysis of trade and regional integration matters, specifically for African countries.

During the pandemic, the internship has become a structured programme with 2 components that the interns are required to complete: trade data analysis and a research project. The trade data assignment aims to provide interns with the skillset to analyse and interpret trade data, acquainting them with different sources of data and challenges related to Africa’s trade and trade-related data. The interns are required to complete basic data calculations and to interpret the results to inform trade policy decisions.   Interns work with trade and related data from multiple sources including, inter alia, the International Trade Centre (TradeMap, MacMap, Investment Map, Trade Competitiveness Map and Export Potential Map), World Bank (World Development Indicators, trade cost database, Doing Business Index, Logistics Performance Index and Global Competitiveness Index), World Trade Organisation (trade, tariffs, services and the use of trade remedies), United Nations (UN COMTRADE), Food and Agricultural Organization (agriculture data), the Organisation for Economic Co-operation and Development (trade facilitation indicators and aid-for-trade statistics), and the United Nations Conference on Trade and Development FDI Statistics.

In recent years, the number of law graduates applying for the internship has increased significantly.  The current cohort comprises mostly lawyers from different African countries and regions. These graduates did not have any prior experience whatsoever with trade data and have been trained by tralac staff to mine, clean and understand and interpret trade data.  We include here the following Blogs by tralac interns:
 

Trade data analysis


Intra-Africa trade and tariff profiles


Data on intra-Africa trade and tariffs is vital for the analysis and understanding of the overall trade performance of African countries within the continent. This becomes important in the context of the implementation of the African Continental Free Trade Agreement (AfCFTA) which will be member state-driven. tralac has prepared intra-Africa trade and tariff profiles for 32 African countries which have updated their official trade data to reflect 2019 trade figures.

View the intra-Africa trade and tariff profiles


AfCFTA negotiations


tralac has also prepared a detailed infographic on the current state of liberalisation in the regional economic communities (RECs) and intra-REC trade, as well as an infographic on the current status of ratification of the AfCFTA.

Recent blogs

 

What could the Biden victory mean for Africa? When President Biden turns his attention to foreign policy (not a prominent issue during the election campaign) he will have to repair much damage done by his predecessor. There will be an opportunity to start writing a new chapter in US-African relations.

The Kenya-UK post-Brexit Trade Agreement. On 3 November 2020 Kenya signed a post-Brexit preferential trade deal with the UK, paving the way for a long-term treaty that will shield East African Community (EAC) exports from the high tariffs that would apply under MFN rules

Kenya and South Africa Bilateral Trade 2019. South Africa is Kenya’s second-largest trading partner in Africa after Uganda. In 2019, Kenyan imports from South Africa amounted to US$688 million (8% increase from 2018), and exports to South Africa were valued at US$32 million (25% decrease compared to 2018). In 2019, Kenya had a trade deficit with South Africa of approximately US$656 million.

Collating and disseminating FDI data and related information in Africa – Challenges and opportunities. Addressing problems related to collection and dissemination of FDI data in Africa requires a concerted effort of countries – individually and collectively, as well as international and regional organisations.

SACU trade 2019. In 2019, intra-SACU trade was 14% of world trade. Intra-SACU exports amounted to US$14.42 billion (49% of intra-Africa exports, and 4% of SACU’s world exports). Intra-SACU imports accounted for 62 per cent of SACU’s imports from Africa, and 13% of world imports.

First Meeting of the African Continental Free Trade Area (AfCFTA) Technical Working Group on IPRs. The first Meeting of the AfCFTA TWG on intellectual property rights was due to start in Addis Ababa on 11 November 2020. The main task for this meeting was to develop the Work Schedule and Sequencing of Negotiations on IPRs.

VIEW ALL BLOGS

New Publications

Tech Disruption in Africa: Assessing the Potential of the Digital Labour Platform Sector

Digital labour platforms are applications that run on computers and smart devices and are able to facilitate new online markets for services of diverse types. This Trade Brief outlines the dimensions of the global market and estimates the size of the actual and potential digital labour market in Africa, highlighting some of the challenges and policy recommendations.

Will the AfCFTA generate NTB related Disputes?

The manner in which African countries trade amongst themselves suggests how many urgent NTB-related problems should be addressed: Corridor management and transport regimes should be harmonised, one-stop border posts should be established, and e-filing of clearance documentation should become standard practice.

Trade-related policy responses to COVID-19

 
tralac is monitoring trade-related policy measures and responses to the COVID-19 pandemic, adopted and implemented by African countries and beyond. Take a look at our resources pages to find out more:

Latest AGOA news

Key trade stats for AGOA beneficiaries to end September 2020

 
Aggregate exports to US: 2020 YTD to end September:
 
  $ 13.7 billion
 
(Share) of AGOA exports: 2020 YTD to end September:
 
  $ 2.86 billion (represents 21% of total exports)
 
Total US import duties on aggregate imports from AGOA beneficiaries: 2020 YTD to end September   $ 33.7 million (0.25% of value of total US imports from AGOA beneficiaries)

Aggregate exports from AGOA beneficiaries to the United States are down 11.7% year-to-date to the end of September 2020, compared the comparable previous year. Key contributing factors are lower oil exports (AGOA falls under AGOA) from countries like Nigeria and Angola, as well as generally contracted demand as a result of economic impacts of the Covid-19 pandemic. South Africa meanwhile recorded a 50% increase in aggregate US exports in the year to end September (see details below). Exports from some AGOA beneficiaries have remained relatively stable, including from Côte d’Ivoire, Ethiopia, Lesotho and Tanzania, while others have recorded steep declines during the year (Nigeria, Angola, Ghana, Mauritius, Mozambique). Mali recently completed the AGOA apparel visa requirements and is now eligible to export under AGOA’s wearing apparel provisions, supported by favourable rules of origin provisions.  
 

South Africa stands out with its 50% increase in US-bound exports; the main drivers of this are significant increases in exports of platinum and gold (+137%, to $ 6 billion), but also of motor vehicles (+63%, to $377 million). These two categories mask the fact that in most industries, exports to the US were significantly lower this year (e.g. iron and steel -46%, organic chemicals -23%, aluminium – 52%, electrical machinery -31%).

Kenya – US Free Trade Agreement

On 6 February 2020, US President Trump announced that the United States intends to initiate trade agreement negotiations with the Republic of Kenya following a meeting at the White House with Kenyan President Uhuru Kenyatta. The announcement came while the US-Kenya Trade and Investment Working Group held its third meeting in Washington (see inaugural meetingsecond meeting) - having been established earlier by President Trump and President Kenyatta in 2018 in order to lay the groundwork for a stronger bilateral trade relationship. On 18 March 2020, the Trump Administration, through the USTR, formally notified the US Congress in line with the Bipartisan Congressional Trade Priorities and Accountability Act (Trade Promotion Authority) which, inter alia,  subjects “trade agreements to congressional oversight and approval, consultations…”. In May and June respectively, the United States and Kenya published their negotiating principles. More recently, the Kenya private sector consortium also submitted its inputs. The negotiations began on 7 July 2020. 

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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