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Developments in International Trade
Stephen Karingi2nd June, 2011
Developments in International Trade
Contents • Key messages
• Africa’s Trade Performance
• WTO and EPAs Negotiations During 2010
• Status of the Aid for Trade Initiative in Africa
• Trade Preferences under AGOA
• South-South Cooperation: Africa-China Relations
• Conclusions and Recommendations
Developments in International Trade
Key Messages
• African trade has recovered strongly in 2010.
• Neither WTO nor EPAs negotiations saw ground-breaking progress during 2010.
• The Aid for Trade momentum has been sustained, with the structure of allocations remaining the same.
• AGOA has been beneficial to African countries, but the uncertainty around this trade preference scheme remains.
• Africa-China relations are not solely focusing on trade, the FDI and ODA channel are also key in these relations.
Developments in International Trade
Africa’s Trade Performance
Trade recovery was strong in 2010, led by a 28% increase in African exports….Merchandise Trade Growth Rates
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
Total merchandise trade Merchandise exports Merchandise imports
Developments in International Trade
Africa's share of world Exports
(%)
Africa's Share of World
Trade(%)
0
1
2
3
4
5
6
7
Africa’s Trade Performance
…meaning Africa's share of world merchandise trade remained constant…Africa’s Share of World Merchandise Trade
Developments in International Trade
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
exp
ort
s
imp
ort
s
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
cu
rre
nt
US
$, m
illio
ns
Transportation Travel Other commercial services
Africa’s Trade Performance
…while trade in services, led by exports in the travel sector, bounced back to pre-crisis levels.
Africa’s Commercial Services Trade
Developments in International Trade
WTO and EPA Negotiations
• WTO Negotiations remain preoccupied with procedural rather than substantive issues.
• Some progress made, especially with respect to:– Banana Deal– Cotton Trade– Non-tariff barriers
• EPA negotiations similarly stagnant. Contentious areas remain:– Development friendly rules of origin
– Lack of financial support from EU beyond EDF
Developments in International Trade
Americas
Asia
Europe Oceania
Africa
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
disbursements
commitments
Aid for Trade InitiativeAfT commitments to Africa now surpass those to
Asia, while disbursements appear unaffected by the global downturn..AfT Commitments and Disbursements by Region, Constant ‘09 US$ (millions)
Developments in International Trade
Aid for Trade Initiative
…with ‘Building Productive Capacity’ attracting a growing share.
AfT Commitments to Africa by Category, constant ‘09 US$ (millions)
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2007 2008 2009
Trade Policy and Regulations, and Trade Realted Adjustment
Building Productive Capacity
Economic Infrastructure
Developments in International Trade
African Growth and Opportunity Act
(AGOA)UNECA participated in AGOA’s mid term review in 2010.
Most respondents found AGOA to be important for relations with the US…
…mainly as a market for exports…
Not Important
24%
Important17%
Very Important
59%
Source of Investments
17%Source of Imports
10%
Market for Exports
73%
Developments in International Trade
African Growth and Opportunity Act
(AGOA)…but only 51% of respondents are benefiting from AGOA.
Other key findings:• AGOA has bolstered creation of jobs and human capital.• Little evidence of impact on regional integration (only
21% of respondents are part of a regional value chain)• All respondents were in favor of expanding AGOA
beyond 2015, with 91% seeking it to be made permanent
• The expansion of trade and business promotion of African products in services in US markets was the most sought after revision.
Developments in International Trade
Chinese-African Trade
• 11.2% of Africa’s exports go to China, in a relationship also based on aid and investment
• China now South Africa’s biggest trading partner• Trade accompanied by a 17-fold increase in
Chinese FDI for South Africa• Concerns pertaining to the lack of backward
linkages persist• A continental FTA could better facilitate win-win
opportunities of exchange between China and Africa
Developments in International Trade
Conclusions and Recommendations
• Africa’s trade performance continues to be below potential and efforts should focus on:
– Production and export diversification– Improving competitiveness by tackling supply-side,
infrastructure and productive capacities constraints • A rapid conclusion of the DDR affording Africa meaningful
market access opportunities, flexibilities and expected developmental gains should be sought.
• The role of the state will be to reflect negotiation outcomes in their trade policies and regulations, linking these with economic transformation objectives which target growth, industrialization, employment and poverty concerns.
• Accelerated harmonization efforts are needed through the Tripartite FTA and the envisaged continental FTA to realize regional integration benefits.