This paper argues that the dramatic changes in the trade architecture of the world during the first decade of the new millennium have created both opportunities and challenges for Africa’s development. African countries need to develop proactive strategies to harness these new changes and use them to advance the integration of the African continent.

The paper looks at the main elements of the changes in the global trade architecture in the first decade of the new millennium. It then explains how these changes impacted on the Doha Development Round. The shift to mega-regionals and mega-bilaterals by the major developed country players and the implications of these developments for Africa’s trade with the world are also briefly discussed. The paper then sets out the changes in the trade policies of the EU and the US on Africa in the new millennium and the implications of these policies for Africa’s economic development. The paper also discusses the role of China in the trade and economic development of Africa and looks at the unfolding regional integration strategy of African countries. 

See Commonwealth Trade Hope Topics Series Issue 131 The changing global trade architecture: Implications for Sub-Saharan Africa's development

Faizel Ismail is Adjunct Professor in the School of Economics, University of Cape Town and a TIPS Research Fellow

Session 1: Regional manufacturing and industrial policy 1

Session 2: Regional integration and SADC

This paper investigates the extent of trade integration of Sub-Saharan African countries in the global economy as well as within the region. Four key concepts are used to assess integration: 1) trade openness, 2) the centrality in the global and regional trade network, 3) gravity model estimates, and 4) global value chain (GVC) integration. We find that the region's trade openness has increased strongly since the mid-1990s, reflecting a growing partnership with emerging markets, particularly China, and budding intraregional trade. However, the region's trade flows have barely kept up with the rapid expansion of global trade. The trade centrality of the economies in the region remains relatively low, and has not increased much over the last 20 years. It remains lower than the one observed in other comparable emerging and developing economies. Likewise, the region still has some way to go to better integrate in global value chains - a feature associated with higher income growth overtime in regions such as South East Asia and Eastern Europe. Some countries are showing progress, albeit from low starting points, with the EAC and SACU particular bright spots. A better insertion into the global economy would help foster structural transformation, export diversification, and the possibility to absorb technology and skills from abroad. 

Session 3: Regional manufacturing and industrial policy 2

Session 4: Market integration and trade

Session 4: Market integration and trade

Session 4: Market integration and trade

Paper to follow

Session 5: International lessons

Session 5: International lessons

Session 6: A regional approach to energy resources

Session 7: Minerals value chains: Upstream and beneficiation

Copper, as Zambia's economic mainstay, is a mineral whose value chain stretches beyond the country's Copperbelt Province and the recently acclaimed “New Copperbelt” Northwestern Province. The Copperbelt Province as the mining hub has several industries benefiting from both upward and downward linkages in the Sub-Saharan African market and other regions globally. Despite the challenges associated with mining and mining economies being real, Zambia needs to learn from countries within the Southern African region such as South Africa and those in other continents such as Chile in order to have a formidable escape strategy from the “natural resource-curse phenomenon”. With such a strategy, stronger industrial linkages at home as well as improved contribution to regional industrialization are possible. Ultimately, this can strengthen economic growth and usher the country into a stage where beneficiation from the mines go beyond the local value chain debate but the entire nation as people see the tangible fruits of economic growth positively impacting human development indicators. The reality in the economic indicators would then truly reflect the reality on the ground among ordinary Zambians as is the case in Chile. 

Session 7: Minerals value chains: Upstream and beneficiation

This paper presents key trends in the global value chain for mining capital equipment. It includes a section on the background of the South African and Zambian mining inputs clusters. It maps the regional value chain for mining capital equipment and presents the research findings in terms of firm entry, upgrading processes and regional inter-firm linkages, and looks at policy constraints at national and regional level.

Session 8: Agricultural value chains in the region

This paper expands a case study by Emet Consulting for the South African Institute of International Affairs (SAIIA) in 2014. The case study (Regulatory Constraints to the Development of a Fuel Ethanol Market in SADC) was a component of a project funded by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), through its ProSPECT project, investigating the most significant constraints to doing business in the SADC region. Through the project GIZ and SAIIA aimed to provide concrete examples of constraints to doing business in the region, as well as potential solutions. The overall objective of the research was to reduce these business constraints by facilitating a dialogue in the SADC region on their removal, thereby allowing the private sector to take advantage of the opportunities offered by regional integration.

Session 9: A regional collabroation: Different approaches

This paper reports on the results of an investigation into the contribution of cooperative management of water resources to regional integration in SADC. The study found that, while a few bilateral projects had contributed to economic development, there was little evidence of a systemic contribution to formal integration. An evaluation of the opportunities and constraints suggests that more effective intersectoral coordination at national level to make better use of resources to stimulate industrial development is the first priority. A more general conclusion is that a functional approach to integration that seeks and supports practical opportunities for mutually beneficial cooperation is more likely to succeed than a focus on generic regional institution building. 

Session 9: A regional collabroation: Different approaches

There is long-standing, wide consensus on the need for greater economic connectedness in Africa. Despite the rhetoric and apparent policy consensus, implementation of related commitments lags seriously. The lack of progress towards the free movement between national markets of goods, services, people and capital is frequently blamed on a combination of lack of political will and lack of capacity. Yet, it is necessary to better understand what these twin deficiencies actually entail. This paper takes a politicaleconomy approach to regional integration to try and understand progress on regional economic integration.

Session 10: Agricultural value chains in the region

This paper examines the reasons for the growth in the poultry industry in Malawi in the past 10 years. 

Technical regulations lay down compulsory requirements for product or service characteristics or their related processes and production methods. They have specific administrative provisions and conformity assessment requirements with which compliance is mandatory for safety, health, environmental control and consumer protection. The capacity to comply with international standards, norms and technical regulations underpins the potential for economic and industrial growth. Standards and conformity assessments are required to prevent the influx of substandard and injurious products into African markets and to improve the quality, and enhance potential access, of African products to export markets.

This policy brief examines the implications for regional integration that the strengthening of technical infrastructure capacity in African countries for metrology, standards, accreditation and conformity assessment and compliance could have for Africa's industrialisation efforts.

This paper forms part of a broader research project TIPS has been involved in around common regional industrial policies. It looks at three examples of regional integration: the Association of Southeast Asian Nations (ASEAN), the European Union and Mercosur. The focus is on understanding the drivers and motivation for regional integration in different parts of the world. It looks into how integration was supported and directed, and specifically how these blocs deal with issues of common industrial policies. It aims to assist in understanding the supply and demand for deepening regional integration and how integration options and approaches can be designed to respond to highly specific contextual circumstances.

Southern African Development Community (SADC) members signed the Trade Protocol in 1996, however progress in the region to reap the benefits purported to accompany regional economic integration appears limited. Although SADC has adopted a growth and development through trade strategy, indications are that more needs to be done to implement this in a way that yields more positive results.