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tralac Newsletter • Issue 5 • October 2018
The Multilateral Trading System – quo vadis?
This tralac newsletter provides an opportunity to reflect on the current state of multilateral trade governance.

There is now broad acceptance that the multilateral trading system is in crisis. Renewal and recalibration of this system have become urgent. Developments in the global economy have outstripped the system that was created in the late 1980s/early 1990s, leaving governance gaps especially in what economists used to call the ‘new generation trade issues’ such as investment and competition policy. Technology developments of the past few decades have changed not only how trade is conducted, but the very nature of the global economy, resulting in deeper global integration and interdependence.

Geo-political shifts are notably underpinned by fundamental economic developments and reorganisation of the global economy. In this context, the economic rise of China and the associated global consequences must be considered. In short, the crisis in the multilateral trading system, runs deep. It has to reckon with the fact that trade itself is increasingly contentious, and that trade policy is now a seriously contested policy area.

It’s again an exciting and challenging time to be working on trade – and we have a series of Blogs covering many complex issues concerning multilateral trade governance.

Although this newsletter does not provide a complete discourse of the current state of the multilateral trading system, what ails it and what needs to be done to renew and reform it, our aim is to encourage open debate. Our aim is that this debate should include developing countries and especially voices from Africa.

Our September newsletter focused on dispute settlement. The parlous state of the dispute settlement in the World Trade Organisation (WTO), that used to be regarded as the centre piece of the multilateral trading system, is not only a reflection of concerns about operational issues such as the appointment of members of the Appellate Body, but also about fundamental differences regarding the role of dispute settlement in the multilateral trading system. We refer you back to the September newsletter for that discussion.

We are particularly pleased to have contributions to our October newsletter from the World Trade Organisation’s Deputy Director-General Alan Wolff and the Director of the Agriculture and Commodities Division, Edwini Kessie.

Trade is definitely back on the governance and development agenda. Leadership, innovative policy analysis and active debates are essential to shape a 21st century trade policy and governance agenda. This is urgently required to support economic decisions that will aggregate to deliver inclusive development outcomes.

We look forward to your feedback.

The tralac team

tralacBlog is a forum to share and engage with the views of tralac researchers and Associates, as well as guest contributors, on pressing regional integration and trade policy issues affecting African countries in order to encourage relevant, topic-related discussion and debate.

Questions and Answers (FAQs)
Multilateral trade governance

Q: Is there still a role for multilateral trade governance?

A: We believe the answer to this question must be in the affirmative. The 21st century reality is one of deep level integration of global markets and commercial arrangements. And then there is the role of technology. Developments, especially in the ICT space, are facilitating global integration and also changing the nature of integration. The increasing complexity of global value chains (GVC) and the large proportion of global trade that is GVC-connected, highlight the importance of investment governance in this context. This means that markets transcend national geo-political borders and the associated national policy and jurisdictional foundations. Such deep integration requires, perhaps much more so than before, multilateral governance solutions.

Q: Does multilateral trade governance reduce the importance of national policy?

A: Multilateral governance solutions are not a substitute for national policies; they do not absolve national governments of their responsibility to develop national policies and regulations to ensure that it is possible meet the requirements of new technologies and market realities. These developments require policy and regulatory responses that keep pace with economic developments and provide incentives for investment in the expansion and diversification of production capacity, to create jobs, income and wealth. Education and ongoing skills development, accompanied by labour market regulatory reform, are among the priority domestic policies in a digital 21st century economy.

Publications and Analysis

This trade brief reviews African production and trade of tobacco, a commodity which has attained a growing share of global production over the past five decades despite a relative decline in importance as a crop on the continent.

A hypothetical analysis of complete post-Brexit liberalisation between South Africa (SACU) and the UK to assess the potential costs and benefits.

This 15th edition of Monitoring Regional Integration in Southern Africa provides a comprehensive review of the manifold transformation process that the southern African region has been through since 2001.

All the states in the region share a common quest for economic growth and the desire to be more present and involved in the global market, in order to draw a more positive balance from their trading activities. However, new challenges and choices arise and need to be taken into consideration in these modern and often complicated times.

Intra-Africa trade and tariff profiles

tralac has prepared 25 country Trade Data Updates (and counting) to provide an overview of the intra-African trading relationships of individual African countries as we move towards the AfCFTA. Each country update is accompanied by an infographic.

AGOA trade to September 2018 continues to show slight increase over 2017 period
Combined exports from AGOA beneficiary countries to the US were up by 7.3% compared to the same period in 2017, from $17.6b to $18.9b. Trade under AGOA/GSP increased from $9.1b to $9.47b over the same comparative period, an increase of 4% year-on-year. Among the leading exporters, South Africa and Nigeria recorded lower AGOA exports (albeit South Africa’s overall US-bound exports increased by almost 7% year-on-year), while those from Angola and Chad were up year-on-year.

Key trade stats for AGOA beneficiaries to end September 2018

Aggregate exports to US: Year to Date to Sept 2018: $18.9 billion (up 7.3% yoy)
Share of AGOA exports:
Year to Date to Sept 2018: $9.47 billion (up 4% yoy)

With respect to the apparel sector, exports claiming AGOA preferences increased by almost 18% year-on-year to September 2018, with Kenya the leading exporter ahead of Lesotho, and with more than double the AGOA exports in this sector of Mauritius and Madagascar combined.

Latest AGOA news updates

AGOA eligibility update: US President Trump recently announced that Mauritania will lose its AGOA beneficiary status in January 2019 as a result of its non-compliance with AGOA’s eligibility requirements, and specifically, it’s failure to make progress on human rights (slavery). “Despite intensive engagement with the United States, the Government of Mauritania has failed to meet critical required benchmarks to address these issues to date” – according to the Presidential Proclamation (see here). See the list of AGOA beneficiary countries at this link.

AGOA and related resources
Access a wide selection of web resources related to AGOA, including national chambers of commerce, export promotion agencies, development and finance agencies, regulatory authorities and trade resources. Click on the various section headings for specific web links.

Other resources include information on AGOA product eligibility, country eligibility status, rules of origin (general and for apparel).

An extensive range of AGOA FAQs can also be accessed on For example: what are the rules of origin requirements? What are the AGOA trade benefits? Where do I find the text of the legislation?
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