Developments in International Trade Stephen Karingi 2 nd 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 Neither WTO nor EPAs negotiations saw ground-breaking progress during 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

Developments in International Trade 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 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 Aid for Trade Initiative AfT 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)

Developments in International Trade African Growth and Opportunity Act (AGOA) UNECA participated in AGOA’s mid term review in Most respondents found AGOA to be important for relations with the US… …mainly as a market for exports…

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.

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