Today’s Topics:

Diarise (5 August): PIIE Trade Winds, with Anabel González by Dr. Vera Songwe, Amb. Albert M. Muchanga and Robert Z. Lawerence.

WTO, World Bank launch joint publication on the role of trade in empowering women

Guest blog: Setting the new global standard in trade finance digitisation

COVID-19 and Food Export Restrictions: Comparing today’s situation to the 2007/08 price spikes

British trade minister to meet top U.S. officials next week, USTR says

American Doubts About the WTO are Growing Like Weeds

EU wants to keep its status as one of Africa’s largest trading partners

Impact of COVID-19 on Associations and Chambers in Africa

AU: Mobility of African Health Workers comes under the Spotlight Post COVID-19

COMESA, EAC and SADC adopt harmonised Guidelines on Trade and Transport Facilitation

Chatham House: In Conversation with Ambassador Amina Mohamed: Candidate for Director-General of the World Trade Organization

Ethiopia: Commission Obliges Import-Export Permit Issuance Via E-Service

ECOWAS encourages engagement and cooperation towards the development of a digital economy at the 12th West Africa Internet Governance Forum (WAIGF)

Malawi ready to ratify African Continental Free Trade Area

Namibia: African Continental Free Trade Area Could Boost Continents Income By U.S.$450 Billion, Study Finds

Zimtrade Promotes Export Opportunities in Mozambique

INTERNATIONAL

WTO, World Bank launch joint publication on the role of trade in empowering women – "The report comes out at an opportune time. The COVID-19 pandemic has provoked the deepest economic recession of our lifetimes. Recent WTO analysis shows that women risk losing some really hard-won progress towards greater gender equality because of this crisis. Looking forward, I have no doubt we need to lay the foundations for a strong, sustainable, and inclusive economic recovery. To build back better, we need to ensure that women are able to benefit from trade," DG Azevêdo said at the launch. "Although this research was done before the global pandemic, its conclusions are more relevant than ever. Gaining a better understanding of how women are affected by trade will be essential as countries develop and the global economy recovers from the pandemic. I hope the discussion today can help policy makers identify the potential opportunities that trade can provide for women and businesses and buttress support for a more inclusive rules-based trading system," Ms Pangetsu said.

The publication features new data and analysis on how women benefit from trade in different ways to men in terms of wages, welfare gains and the quality and quantity of jobs available to them. It draws from a new dataset which, for the first time, provides labour data broken down by gender at the industry level for 72 countries. It also draws from the first database on explicit gender-related provisions in regional trade agreements.  The report finds that firms engaged in international trade employ a higher percentage of women than non-exporting firms (33% on average compared to 24% per cent for non-exporting firms). It also features findings on how trade increases wages, improves working conditions and is linked to higher levels of gender equality. (WTO)

Key Words: WTO, Trade Policy, COVID-19

Guest blog: Setting the new global standard in trade finance digitization – Perhaps finally the future of trade finance digitisation really is now; perhaps now presents an unprecedented opportunity for banks to set the new global standard? While consumers are adapting like never before to the new digital norm, so too will corporate customers, expecting their banking partners to keep pace and to deliver their services without delay or error. But how can banks leverage this opportunity? Quite simply by implementing new technologies and adjusting their services and operations to provide end-to-end digital services with higher efficiency and lower costs. The scope of trade finance digitisation possibility is endless and contrary to some misconceptions, does not require a drastic change in operations.

Adding new automation tools without seamless interoperability to incumbent systems, however, will undoubtedly increase deployment costs and decrease return on investment (ROI). It is far better to streamline operations by eliminating multiple systems that address the same problem and then focus on technologies that connect and facilitate customer engagement. While individual platforms can contribute value to a business, it is far better to use integrated, complementary solutions for greater impact, reduced implementation time, increased ROI and faster results.

The technology enablers - Be wary of relatively new tech trends, such as distributed ledger technology or blockchain. While sparing the need for paper through the creation and exchange of digital assets, these technologies still rely on a large, pre-configured user base to operate well. Blockchain has generated a lot of interest in the banking sector, but again adoption has been slow and is not widespread due to high subscription and integration costs. In order to make it worthwhile, to make it time and cost-efficient, all ecosystem parties must be onboarded to the same solution, or at least to a similar solution using the same technology, so they can communicate.  However, with very few trade finance blockchain solutions out there, and without interoperability, adoption is sluggish and expensive. (ICC)

Key Words: ICC, Trade Policy, COVID-19

COVID-19 and Food Export Restrictions: Comparing today’s situation to the 2007/08 price spikes – Twenty-two countries have responded to COVID-19 by announcing or imposing food export restrictions.1 This has sparked concern that access to food for consumers in low-income, food-importing countries could be harmed, as happened when food prices spiked in 2007/08 and 2010/11. There are important differences between today’s situation and the previous price spike episodes, as well as some similarities. This note draws on the International Food Policy Research Institute’s (IFPRI’s) COVID-19 Food Trade Policy Tracker2 to compare how governments have reacted to the current crisis with how they did so in the past.

A different economic policy context - Global food supplies and stocks today are ample to meet demand, with agricultural commodity and oil prices at relatively low and declining levels. In contrast, in 2007/08, export restrictions exacerbated shortages on global markets, as high energy prices, biofuel blending mandates, and harvest failures in major producing countries contributed to tight markets for several staple foods. Recently, difficulties in ensuring food availability have related more to logistical challenges in ensuring smooth functioning of food supply chains as governments impose health-related restrictions reaching beyond the food sector.  

A smaller share of globally traded calories affected - At the time of writing, IFPRI data shows that 22 countries have announced or imposed export restrictions on food in response to the COVID-19 crisis, compared to 33 in 2007/08. Looking at all announced restrictions, it is clear that a far smaller share of globally traded calories4 has been affected by recent measures: at around 5%, this is just over a quarter of the level affected in 2007/08. Products targeted by measures today represent nearly 227,000 billion Kcal, compared to almost 493,000 billion Kcal in 2008. Similarly, the monetary value of food and farm goods affected today represents about half that in 2007/08, at USD 21 billion rather than USD 43 billion. (IISD)

Key Words: IISD, Trade Policy, COVID-19

British trade minister to meet top U.S. officials next week, USTR says  – British Trade Minister Liz Truss will meet top U.S. officials in Washington in coming days to assess progress on reaching a free trade agreement between the two countries, a spokesman for the U.S. Trade Representative’s Office said on Saturday.  Truss is scheduled to meet U.S. Trade Representative Robert Lighthizer on Monday and Tuesday, his office said, confirming a Financial Times report.  After leaving the European Union in January, Britain is keen to stand alone and has started a series of trade negotiations with other countries. A deal with the United States is seen as a priority. Truss has previously said there was no timetable set for Britain’s trade talks with the United States, adding that British negotiators had made “very good progress” despite conducting talks via video conference due to the coronavirus outbreak.  “We’re not going to rush into a deal and there is no deadline. We will be tough in pressing our interests,” Truss told a parliamentary committee in June.

The British embassy in Washington did not respond to requests for comment on Saturday. The FT reported late in July that the British government had abandoned hopes of clinching a free trade deal with the United States ahead of the American presidential election on Nov. 3, with officials blaming the pandemic for slow progress.  U.S. Secretary of State Mike Pompeo said during a visit to London last month that the United States and Britain still have more work to do on a free trade deal.  “A third round (of negotiations) scheduled for later this month, a primary focus for the United States is to see that we can make progress on this and bring this to a closure just as quickly as possible,” Pompeo said. (Reuters)

Key Words: U.S., UK, Trade, COVID-19

American Doubts About the WTO are Growing Like Weeds  – The global trade policy community mostly agrees the WTO is in need of reforms to restore its core functions of negotiating trade-liberalizing deals and ensuring effective implementation and enforcement of those trade deals. Let’s be honest, however. Though vital for the health of the WTO, the average American is not interested in the minutia of tweaks to the WTO’s dispute settlement system, in the vernacular “special and differential treatment” for developing countries, or the definition of a market economy. When the trade community is too focused on those details, it risks losing sight of the broader need to attract American public support for the institution itself. To position the WTO’s role more prominently in Americans’ understanding, trade policymakers should appeal to citizens in the following ways:

To Americans’ sense of fairness: The average American is interested in basic fairness and in ensuring that major economies play by the same rules. Before the WTO, countries that signed onto its predecessor, the General Agreement on Tariffs and Trade, were called Contracting Parties. The GATT was a contract. Americans like contracts; we are good at writing contracts. We enter them voluntarily when the terms are favorable and mutually agreeable. The United States negotiated favorable terms under the GATT and then the WTO. If those terms no longer serve the United States well, it can negotiate different or additional terms. But the United States can only do that if it remains a member.

To Americans’ need for control over their own destiny: The average American feels conflicted about international organizations because they fear a loss of sovereignty. However, WTO rules do not prevent national policies to promote domestic jobs and growth. Rather, the disciplines of the global trading system compel governments to adhere to the norms of transparency and non-discrimination as those policies are developed and implemented. If the American public perceives the U.S. government has made poor policy choices, that’s on our policymakers, not the WTO. And if we fail to treat companies from other nations in a non-discriminatory manner, we can be sued in the WTO just as we can sue other governments. But: only our elected representatives in Congress can change our laws. It would be helpful for more Americans to understand this. (tradevistas)

Key Words: USA, Trade Policy, COVID-19

PAN AFRICA

Diarise (5 August): PIIE Trade Winds, with Anabel González. African perspectives on the WTO and prospects for regional trade cooperation. Is a new African voice on trade emerging? How does Africa view WTO reform and how could it contribute to strengthening global trade cooperation? How can the AfCFTA help Africa recover from the pandemic. Guests:

• Dr Vera Songwe (Executive Secretary, UNECA)
• Ambassador Albert M. Muchanga (African Union Commissioner for Trade and Industry)
• Robert Z. Lawrence (Harvard Kennedy School, PIIE)

(tralac)

EU wants to keep its status as one of Africa’s largest trading partners – Contrary to popular belief, the EU remains Africa’s leading economic partner. Although the pace of the partnership may not be to the same levels as that with Beijing; Brussels is still comfortably ahead in the race. And that rhythm is maintained precisely to accelerate the pace and “reverse the narrative”, explains a European official on why the last two Commissions have attempted to fine-tune the financial instruments at their disposal in order to implement the Community’s external action policy.

57% of the EU, compared to 10% of China - In 2018, the EU made available more than 74 billion euros from all mechanisms and all countries combined, representing 57% of the total amount invested in cooperation, compared to just 10% from China. And yet very few know about this discrepancy. So in an effort to bring about some coherence as requested by the “Committee of the Wise ” in December 2019, and to weave “this new partnership with Africa”, the Commission has taken up the proposal made in June 2018 to group its financial instruments for external cooperation into a single one. If its principle were to be ratified during the current negotiations on the 2021-2027 Community budgets, this new Neighbourhood, Development Cooperation and International Cooperation Instrument (Ndici) would have a global envelope of €32bn for sub-Saharan Africa, plus 22 billion euros for the neighbourhood policy, which concerns the north of the continent.   (theafricareport)

Key Words: EU, Africa, Trade Agreement

Impact of COVID-19 on Associations and Chambers in Africa – In June, CIPE began surveying business associations and chambers of commerce throughout Africa. The survey was designed to measure the impact of COVID-19 on these organizations and their respective communities. In the words of CIPE’s Executive Director, Andrew Wilson, business associations and chambers are “conduits of information, advocates for policy, providers of service, and mobilizers of relief.” The importance of a response from these organizations is critical to recovering from the pandemic and re-opening the economy.

COVID-19 has had a major impact on business associations, chambers, and their communities. Associations expert Bill Pawlucy reflects “It is very evident that the impact of the current pandemic is very real, and the data collected shows this but also points to hope and recovery.” In light of the challenges, the survey reveals innovation and the creative response of organizations. The inherent nature of these organizations – to advocate and provide for their member’s interest and well-being – has hardly been more evident. Challenges are abounding, yet so are impactful responses.

CIPE received over 100 preliminary responses from associations and chambers of all sizes and areas of focus across the continent from 12 countries including Nigeria, Kenya, Ethiopia, Rwanda, Zimbabwe, Ghana, South Africa, Liberia, Uganda, Mauritius, Algeria, and the Gambia. Since we are still in the midst of the pandemic, CIPE will continue to collect information from associations but we want to share the preliminary results and findings. The survey begins by studying the pandemic’s impact on association and chamber revenue streams and transitions into programming challenges, community impact, adaptations, and areas for CIPE and other development partners to provide support. (CIPE)

Key Words: COVID-19, Africa, Business

Mobility of African Health Workers comes under the Spotlight Post COVID-19 - The African Union’s Labour Migration Advisory Committee (LMAC) last week convened a virtual conference where health policy experts discussed ways to better manage the labour market for health workers in Africa. This was the last of three online meetings in which LMAC examined changes in labour migration governance in Africa in the context of disruptions caused by the coronavirus. In the three virtual exchanges, labor market stakeholders took stock of COVID-19’s impact on African migrant workers in and outside the continent. They also examined emerging issues in labour migration including in the informal economy, and strategies to protect labour migrants and build resilience in the face of disruptions such as pandemics. A representative of the Economic Community of West African States (ECOWAS), which is the current chair of LMAC, led the meetings, with presentations and recommendations expected to be distilled into policy briefs. These will be shared with policymakers at the African Union Commission, Regional Economic Communities (RECs), and stakeholders.

  Last week’s meeting observed that the mobility of health workers is not a new trend, although the pandemic has cast further light on the global scramble for medical expertise. Despite the strong intra-African movement of health workers, especially within Eastern and Southern Africa, a high number of health workers from the Global South still move to high income countries, leaving Africa with one of the lowest doctor to patient ratios in the world. These health specialists emigrate given the increased demand for their expertise, and the attractive incomes and working conditions abroad. For instance, in OECD countries one out of four health workers are reported to have been born abroad, while one out of five trained outside Europe. The experts also agreed that COVID-19 was revealing shortcomings in how the movement of health workers has been managed by both sending and receiving countries. Despite working at the forefront of the pandemic, skilled health workers, as well as countries of origin and destination, have not found ways to work together to reap mutual benefits. (AU)

Key Words: AU, Africa, COVID-19

COMESA, EAC and SADC adopt harmonised Guidelines on Trade and Transport Facilitation – The Common Market for East and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) on 29th July, 2020 adopted harmonised Tripartite Guidelines on Trade and Transport Facilitation Guidelines for Safe, Efficient and Cost-Effective Movement of Goods and Services during the COVID-19 Pandemic. The Guidelines are aimed at containing the spread of COVID-19 whilst facilitating trade and transport of goods and services across the Tripartite area during the COVID-19 pandemic.

In his remarks at the opening of the Tripartite Council of Ministers meeting, Honourable Mr Tarek Shalaby, Assistant Minister for Foreign Trade, Agreements and International Relations of the Arab Republic of Egypt, representing the Chairperson of the COMESA-EAC-SADC Tripartite Council of Ministers said the harmonisation of guidelines on Trade and Transport Facilitation presents an opportunity towards the realisation of the Tripartite Free Trade Area (TFTA) which was signed by the Tripartite Heads of State and Government in June, 2015.

The Minister called for collective action to guarantee movement of goods and services to promote intra-regional trade, while reducing the cost of goods and services within the tripartite area. He added that the attainment of tripartite and continental integration can only be realised with the harmonisation of regional initiatives and overcoming the challenges of overlaps and multiple membership of COMESA, EAC and SADC. (tralac)

Key Words: Trade and Transport Facilitation, Africa, COVID-19

In Conversation with Ambassador Amina Mohamed: Candidate for Director-General of the World Trade Organization –6 August 2020 - 5:15pm to 6:00pm -  On 31 August 2020, Roberto Azevêdo will step down as director-general of the World Trade Organization (WTO). The selection process for the next director-general is underway with eight candidates nominated by national governments around the world. The successful candidate will lead this critically important global organization as it faces enormous challenges amid intensifying international trade tensions, rising protectionism and the unprecedented global economic fallout from the COVID-19 pandemic.

In this webinar, Dr Alex Vines, managing director of ethics, risk and resilience and director of the Africa Programme at Chatham House, will host a conversation with Ambassador Dr Amina Mohamed, who has held several cabinet secretary posts including for foreign affairs and trade (2013-18) and is candidate for the director-general post at the WTO. Dr Mohamed has also served as chairperson on various WTO decision-making bodies such as the Ministerial Conference (2015), the General Council (2005), the Dispute Settlement Body (2004) and the Trade Policy Review Body (2004).

Chatham House has worked since its foundation to support and help develop the rules-based multilateral economic system. This event is part of a centenary series of dialogues with the WTO candidates supported by the Global Economy and Finance Programme and the Global Trade Policy Forum to better understand their stance on key challenges in world trade. What is their overarching philosophy on global trade? What is their vision of the future role of the WTO and what will be needed to deliver on this? And how will they tackle a number of the most pressing issues facing the organization as the world grapples with the COVID-19 crisis and ongoing global trade tensions? (CHATHAM HOUSE)

Key Words: COVID-19, Africa, Regional Trade

EAST AFRICA

Ethiopia: Commission Obliges Import-Export Permit Issuance Via E-Service –  The new procedure that obliges traders in the import-export business to secure permits via the celebrated Ethiopian Electronic Single Window Service (eSW) is now fully operational. The portal, which connects 16 major regulatory agencies, enables traders to submit documentation and receive electronic import and export permits through a single-window submission. The system was launched this January, but it became mandatory for traders as of July 8 following a request from the Customs Commission to the National Bank of Ethiopia (NBE). The Commission sent a letter to the central bank requesting the enforcement of the eSW system through banks to decrease the physical contacts as a means to contain the spread of Novel Coronavirus (COVID-19).

In the process, the traders have to go to the premises of the Commission to get a username and password after producing their business license. With their account, the officers of the Commission feed sales contract agreements, proforma invoices and letters of credit into the system for the exporters, as well as insurance certificates, proforma invoices, certificates from the regulatory agency and undertaking letters for importers, into the system. All this data will be scrutinised by each of the 16 respective regulatory agencies before the issuance of the permit. The entire process is said to take three days. Out of the 16 government bodies, four of them - Oromia Islamic Affairs, the Ethiopian Food & Drug Authority, the Ethiopian Chamber of Commerce & Sectoral Association and the Ethiopian Conformity Assessment Enterprise - are not giving service.  (Addis Fortune)

Key Words: East Africa, Business, COVID-19

WEST AFRICA

ECOWAS encourages engagement and cooperation towards the development of a digital economy at the 12th West Africa Internet Governance Forum (WAIGF) - The Commission of the Economic Community of West African States (ECOWAS) brought together diverse stakeholder groups from the region and beyond at the 12th West Africa Internet Governance Forum (WAIGF) to engage as the region strengthens its strides towards the ongoing digital economy development. The two-day videoconference forum with the central theme ‘Digital Inclusion and Access in West Africa in response to COVID-19’ was convened from 22 to 24 July 2020. The forum aims to strengthen the active participation of various stakeholder groups in the Internet governance debate on the utilisation of the Internet, exploration of the digital landscape in the context of COVID-19, which included the impact of Trust and Privacy in the current COVID-19 pandemic, Cybersecurity and cybercrime in the era of digital cooperation and beyond.
 

The ECOWAS Commissioner for Telecommunications and Information Technology, Dr Zouli Bonkoungou emphasised why Information Communication Technology (ICT) remains key to the realisation of a viable socio-economic West Africa, competitive in all areas. He noted the COVID 19 challenges currently facing the region and stressed the importance of proffering regional solutions to these so as to ensure that the development of the region is on the right trajectory with positive impacts delivered for the people. Dr. Bonkoungou encouraged all stakeholders to contribute to the ongoing conversations that can shape the development of the region.. (ECOWAS)

Key Words: ECOWAS, Regional Trade, Business

SOUTHERN AFRICA

Malawi ready to ratify African Continental Free Trade Area – Malawi has said it is ready to ratify the African Continental Free Trade Area (AfCFTA), a pact aimed at increasing trade among African countries. The government has said it has concluded consultations with stakeholders on the matter. In an interview Tuesday, Minister of Trade, Sosten Gwengwe, said the country is expected to deposit its ratification instruments to the African Union (AU) within a month from now. “Malawi [government], after consultations with private sector, has signed the approval of the AfCFTA. The instruments are with Ministry of Justice as we finalise the ratification processes. “After proof reading the agreement, it will be deposited to the AU, but approval protocols are done. We should deposit the instruments within a space of one month,” Gwengwe said.

The AU says that the African Continental Free Trade Area – called AfCFTA – will create the world’s largest free trade area. It also estimates that implementing AfCFTA will lead to around a 60% boost in intra-African trade by 2022. In its recent report, World Bank estimates that implementing the agreement would contribute to lifting an additional 30 million people from extreme poverty and 68 million people from moderate poverty. It further says that real income gains from full implementation of the agreement could increase by 7 percent, or nearly $450 billion. “The AfCFTA would significantly boost African trade, particularly intraregional trade in manufacturing. “By 2035, the volume of total exports would increase by almost 29 percent relative to business as usual. Intra-continental exports would increase by more than 81 percent, while exports to non-African countries would rise by 19 percent,” reads the report in part.  (Business Malawi)

Key Words: Malawi, AfCFTA, Regional Trade

Namibia: African Continental Free Trade Area Could Boost Continents Income By U.S.$450 Billion, Study Finds – If implemented fully, the African Continental Free Trade Area (AfCFTA) trade pact could boost regional income by 7% or US$450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035, a new World Bank report has found. The report suggests that achieving these gains will be particularly important given the economic damage caused by the COVID-19 pandemic, which is expected to cause up to US$79 billion in output losses in Africa in 2020. The pandemic has already caused major disruptions to trade across the continent, including in critical goods such as medical supplies and food. Most of AfCFTA's income gains are likely to come from measures that cut red tape and simplify customs procedures.

Tariff liberalization accompanied by a reduction in non-tariff barriers such as quotas and rules of origin would boost income by 2.4%, or about US$153 billion. The remainder US$292 billion would come from trade-facilitation measures that reduce red tape, lower compliance costs for businesses engaged in trade, and make it easier for African businesses to integrate into global supply chains. "The African Continental Free Trade Area has the potential to increase employment opportunities and incomes, helping to expand opportunities for all Africans," said Albert Zeufack, the World Bank's Chief Economist for Africa. "The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive. But successful implementation will be key, including careful monitoring of impacts on all workers -women and men, skilled and unskilled--across all countries and sectors, ensuring the agreement's full benefit," he concluded. (Namibia Economist)

Key Words: AfCFTA, COVID-19, Trade Policy

Zimtrade Promotes Export Opportunities in Mozambique – Local companies have been presented an opportunity to avail their goods for export to Mozambique with ZimTrade expected to host an online dissemination seminar. The seminar is aimed at unpacking findings of a market survey conducted in Mozambique in March this year. It will also see potential Mozambican buyers making presentations on market expectations from Zimbabwean suppliers. Those expected to make presentations are drawn from different sectors among them fast-moving consumer goods, building and construction, agricultural inputs and implements, as well as engineering. The online seminar is in line with World Health Organisation (WHO) recommendations that dissuade gatherings in the face of the world ravaging Covid-19.

In a statement, the national trade development and promotion organisation said Mozambique offers good opportunities, particularly for companies struggling to reach some parts of the world due to Covid-19. "We understand that Covid-19 has disrupted some business activities in Zimbabwe and beyond but that should not deter local companies from increasing their supplies into the regional markets," said ZimTrade Chief Executive Officer Mr Allan Majuru. "Currently, international markets are difficult to reach for some sectors. However, given the proximity of markets like Mozambique, local companies are encouraged to shift their focus to ensure they maximise sales on available markets."Going forward, we will be organising more virtual business to business meetings and other engagements between local companies and buyers in the region, to ensure that we maximise on potential presented by our proximity to most countries in southern Africa," he said. Mozambique relies on imports heavily, in 2019 it registered an import bill of US$10.9 billion according to Trade Map.  (The Herald)

Key Words: Southern Africa, COVID-19, Regional Trade