Displaying items by tag: Trade Agreements

In 2010, South Africa joined the BRICS bloc: Brazil, Russia, India, China, and South Africa. BRICS is an association of regional powers across four continents, originating from an informal alliance in trade negotiations. So far, members have signed agreements among others on customs, energy efficiency, and tax. They have also set up a joint development bank, designed principally to finance infrastructure.

This paper provides background on the BRICS economies to deepen understanding of the bloc’s potential and limitations. To that end, it first reviews the main trends in the member economies. It then analyses their production structure. A more detailed section on trade relations within the bloc follows, with a focus on trade between South Africa and the other members. A final section lists major recent intra-BRICS investment projects.

The analysis does not include the new BRICS members (Saudia Arabia, Egypt, the United Arab Emirates (UAE), Iran and Ethiopia) that joined the group on Monday 1 January 2024.

This paper examines the potential of a new regional framework for thinking about AGOA. It proceeds in four parts.

Part 1 provides an overview of trade under AGOA, examining trends in trade, which products are traded, and profiling the tariff advantages of the programme.

Part 2 looks at the bilateral impact of AGOA for South Africa and the United States, looking at the mutual advantages for both sides in employment creation, investment, trade in services, and the provision of critical mineral products.

Part 3 examines the regional impact of AGOA, and particularly looks at a comparative of routes to market, weighing direct exports to the US against regional routes to market.

Part 4 examines the future of AGOA, including undertaking an analysis of the political dynamics of renewal, scoping out some potential areas for expansion of AGOA preferences, and considering policy options should South Africa be excluded from the programme.

Lead Author: Christopher Wood
This paper was written with support and input from the Congress of South African Trade Unions (COSATU) and affiiated unions. Opinions expressed in this paper are the result of consultation between the lead author and COSATU.

This paper argues that South Africa needs to mainstream climate change into its National Development Plan (and Sustainable Development Goals), by advancing i) climate resilient development  through several pathways, including; ii) South Africa’s Nationally Determined Contribution commitment to a low-carbon economy; iii) renewable energy and transition to a low-carbon economy; iv) climate change adaptation and resilience; and v) financing a  just transition to renewable energy. The paper also discusses the impact of the European Union’s Carbon Border Adjustment Mechanism on South Africa’s competitiveness and climate resilient developmet and looks at the impact of climate change in Africa. It concludes with some policy recommendations on what can South Africa, BRICS and other developing countries can do to support their strategies towards climate resilient development in a way that is socially just and fair.

Bilateral or regional trade agreements (RTAs) are essentially preferential in nature and a deviation from the World Trade Organization principle of most-favoured-nation or non-discrimination, as they are intended to benefit signatory countries. However, the agreement could be abused by competitive third-countries that use a member country of the RTA (that has a low external tariff) as a springboard to penetrate the entire regional preferential market. Such a scenario could undermine the industries of other countries within the RTA. To avoid such a scenario, free trade agreements or RTAs use rules of origin (RoO) to determine the national origin of the product and to establish the thresholds for local content or value-added before the product is re-exported.

This Discussion Paper outlines the different types of RoO, provides a brief overview of the approaches to RoO adopted by Africa's Regional Economic Communities, and explores the mainstream academic literature on RoO in the automotive, textiles and apparel sectors. Following this, it highlights current trends in the cotton, textile and apparel production and regional value chains in Africa, arguing that the AfCFTA should adopt a developmental regionalism approach to its RoO negotiations in the cotton, textiles and apparel RVC. In this context, some recommendations for policymakers and negotiators are also provided.

The current global health crisis created by the COVID-19 pandemic has refocused our attention on the shortcomings of the TRIPS Agreement and the patent system in dealing with global health crises. This time around, developing countries must ensure that the TRIPS waiver succeeds in creating the momentum needed to build manufacturing capacities in the poorest countries, especially in Africa, for those in need. vaccines, pharmaceuticals and other health technologies. This is the only effective way for African countries to reduce their dependence on imports of essential drugs and strengthen their health security, thus contributing to the achievement of the Sustainable Development Goals for the poorest countries.

This South Center Policy Brief by Faizel Ismail provides a summary of the recommendations of several global commissions on the relationship between patents, innovation, and public health is provided. The World Trade Oorganization proposal by South Africa/India for a TRIPS waiver for vaccines, pharmaceuticals and health technologies for COVID-19 is discussed. It argues that the COVID-19 pandemic provides African countries with the opportunity to develop their health security by building their manufacturing capacity in vaccines, pharmaceuticals and health technologies. Finally, the Policy Brief concludes by calling on the developed countries to supportthe COVID-19 IP Waiver proposed by South Africa/India and over 100 countries in the WTO and help to build the manufacturing capacities of the poorest countries in Africa—thereby reducing the current inequity in vaccine access and contributing to global health securityand the sustainable development goals.

WTO reform and the crisis of multilateralism: A Developing Country Perspective

By Faizel Ismail

The WTO has not been able to recover since the collapse of the Doha Round in July 2008. Several ministerial conferences including the Buenos Aires meeting in December 2017 failed to reach agreement. The US Trump Administration launched a campaign to reform the WTO in 2018 and 2019. This book argues that the Trump Administration reform proposals have been much more aggressive and far-reaching than the Obama Administration before it, threatening to erode hard-won special and differential treatment rights of developing countries. By blocking the appointment of new Appellate Body members, the US has effectively paralysed the Appellate Body and deepened the crisis of the multilateral trading system. Developing countries have responded to the proposals and called for the WTO to be development-oriented and inclusive. This book provides a critical analysis of the US-led reform proposals and seeks to build a discourse around an alternative set of concepts or principles to guide the multilateral trading system based on fairness, solidarity, social justice, inclusiveness and sustainability.

Professor Faizel Ismail is the Director of the Nelson Mandela School of Public Governance at the University of Cape Town. He has a PhD in Politics from the University of Manchester, United Kingdom (2015); an MPhil in Development Studies from the Institute of Development Studies (IDS), Sussex (1992); and BA and LLB Degrees from the University of KwaZulu-Natal (Pietermaritzburg) in South Africa (1981 and 1985). He has served as the Ambassador Permanent Representative of South Africa to the WTO (2010-2014). As South Africa’s Chief Trade Negotiator, since 1994, he led the new democratic South Africa’s trade negotiations with the European Union (EU), Southern African Development Community (SADC), Southern African Customs Union (SACU), and several other bilateral trading partners including the US, India, and Brazil. He was also South Africa’s Special Envoy on the South Africa-USA AGOA negotiations between January 2015 and June 2016. Professor Ismail is a TIPS Research Fellow. He is the author of two books on the WTO: Mainstreaming Development in the WTO. Developing Countries in the Doha Round (2007) and Reforming the World Trade Organization. Developing Countries in the Doha Round (2009). He is an associate editor of the Journal of World Trade.

This book is published by the South Centre with support from Trade & Industrial Policy Strategies

https://www.southcentre.int/

Find other South Centre publications at: https://www.southcentre.int/publications-catalogues/

The Conversation - 26 May 2020 by Faizel Ismail

Read online at The Conversation

This paper looks at the future of South Africa-United Kingdom trade relations in the post-Brexit period. It provides a brief background and looks at the history of trade relations until the onset of democracy in1994. It then looks at SA-UK trade relations since 1994, including the negotiations the led to the Southern African Development Community-Economic Partnership Agreement. This sets the context for the current SA-UK negotiations for a post-Brexit trade arrangement. The question this paper seeks to address is: will the post-Brexit period be characterised by an increasingly aggressive Britain striving to re-assert its power in the World and advance its mercantilist interests in South Africa and Africa, or shall the world see a new idealist Britain seeking to increase cooperation in its own region and the world, re-building multilateral governance based on the values and principles of inclusivity, equity and sustainable development? It will be argued that South Africa should expect the first scenario but also prepare to influence the UK towards the second scenario.  Some policy recommendations will be made both for South Africa and Africa in their future post-Brexit trade and investment relations.

The paper will become part of a series of research papers produced in co-operation between the Centre for Comparative Law in Africa at UCT, the Nelson Mandel School of Public Governance at UCT and TIPS.

This paper argues that adopting a “developmental regionalism” approach to trade integration provides the best prospects for the African Continental Free Trade Agreement (AfCFTA) to catalyse the process of transformative industrial development, cross-border investment and democracy, governance, peace and security in Africa. It also looks at the progress being made by African countries and the continent in implementing each of the four pillars of this approach.

This paper was written in celebration of the significant contribution to African integration made by Chief Olu Akinkugbe. 

Dr Faizel Ismail also presented the Keynote Address at the Olu Akinkugbe Business Law In Africa Fellowship Conference held at the Lagos Business School on 28 November 2018.

A 'developmental regionalism' approach to the AfCFTA: In celebration of the 90th birthday of Chief Olu Akinkugbe CFR CON

The African Growth and Opportunity Act (AGOA) is a non-reciprocal preferential trade programme that the US offers to 49 sub-Saharan African countries. President Obama's decision to extend AGOA, which was set to expire at the end of September 2015, for another 10 years (2015 to 2025), was highly controversial. The Extension and Enhancement of AGOA Act, signed into law by President Obama on the 29 June 2015, had thus included many new provisions to incorporate the views of the US Congress on the implementation of the 10-year extension and the future trajectory of AGOA.

In this paper, the Extension and Enhancement of AGOA Act is analysed to elucidate the new and additional powers that the new AGOA Act provides the US Congress, the US Administration, and US business lobbies, and the implications of these changes for sub-Saharan African countries. At least three new trends in the 2015 AGOA Act can be identified: payment for preferences, institutional attrition, and a shift to reciprocity. These trends, it is argued in this paper, are potentially contrary to a more mutually beneficial relationship between the US and Africa. The paper offers some reflections on the future of AGOA.

Read online: AGOA Extension and Enhancement Act of 2015, the SA–US AGOA negotiations and the Future of AGOA

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

Presentation and Panel Discussion:

Background

The importance of exporting to the US for any developing country cannot be downplayed. Exports to the largest economy in the world along with various support measures has been of cruciall importance to countries such as Japan and South Korea during their industrialisation, more recently for China. The Africa Growth and Opportunities Act (AGOA) recognises the potential benefits of the US market and is a mechanism to encourage African economies to export into that market. While AGOA is a unilateral agreement by the US it gives benefits to the recipient countries and also is a means to encourage investment by US firms into Africa. The potential to support industrial development is therefore significant and is part of the motivation to extend AGOA by 10 years. Outside of the oil exporters, South Africa is the largest exporter through AGOA. South Africa exports value added products including automotive components and vehicles through AGOA. The recently adopted AGOA, however, specifically required a review of South Africa, mainly as a result of the requirement for poultry and pork imports from the US into the country. The poultry issue has been resolved and a number of compromises reached. The threat of the provisions of the Act that could exclude South Africa still remain. The benefits of South Africa being part of AGOA are applicable to both South Africa and the US,; it is therefore desirable on the side of both countries to find the compromises that would enable that.

　
The TIPS paper to be presented also forms part of a research project undertaken for NEDLAC.

PRESENTERS:

Faizel Ismail: Dr Faizel Ismail is an Adjunct Professor at the UCT School of Economics and a TIPS Research Associate. He has previously been an advisor to the dti on International Trade and Special Envoy on the African Growth and Opportunity Act and served as the Ambassador Permanent Representative of South Africa to the WTO (2010-2014).

Malose Letsoalo: Malose is the Director of Americas Bilateral Trade Relations in the International Trade and Economic Development Division (ITED) of the Department of Trade and Industry (the dti).

Christopher Wood: Chris is a TIPS economist focusing on trade and industry policy. He previously worked as a researcher in economic diplomacy at the South African Institute of International Affairs.

Tinashe Kapuya: Tinashe is the head of international trade and investment intelligence at the Agricultural Business Chamber (Agbiz).　

Date:    Tuesday 24 January2017
Time:    13h30 – 16h00
Venue:  TIPS Boardroom, 234 Lange St, Nieuw Muckleneuk, Pretoria 
                                                                                                                                       

RSVP by email: natasha@tips.org.za to confirm attendance.

This paper reviews the state of play of the African regional integration agenda, inspired by the vision of the Abuja Treaty and Agenda 2063. It argues that the Continental Free Trade Area (CFTA) negotiators should adopt a “development integration” approach to ensure that the outcome of the CFTA benefits all its members. Towards this end, the CFTA negotiators should work on three parallel tracks: a) they must ensure that the architecture of regional integration is asymmetrical in favour of the Small, Vulnerable Economies (SVEs) and the Least Developed Countries (LDCs); b) they must prioritise the fullest participation of all Africa’s members in regional productive value chains that enhance Africa’s industrialisation; and c) they must facilitate the co-operation of member states towards the building of cross-border infrastructure. It is argued that this vision and agenda of the CFTA and Agenda 2063 provide Africa with a powerful negotiating mandate to drive the process of engagement between Africa and its main trading partners, multilaterally in the World Trade Organization (WTO) and bilaterally with the European Union (EU), United States (US), China and others.

This policy brief considers the three main options available to South Africa in a post-AGOA trade and investment relationship with the United States: to stay in AGOA, negotiate a Free Trade Agreement, or fall back on Most Favoured Nation terms and the Generalized System of Preferences.

Ten years is a very short time in the global economy, and by all accounts a decade is all that is left of the African Growth and Opportunity Act (AGOA). While the United States’ unilateral preferential access programme for Africa has been reauthorized three times since it began in 2000, it looks very unlikely to be extended beyond 2025.

This article looks at options and present three immediate interventions could prove useful.

Read online: Making the best of AGOA through export-promotion policies.

What are the main changes in the global trading architecture over the past 15 years? How have these changes impacted on Africa’s economic development and the nature of trading relations between Africa and its traditional developed country partners, the European Union, the UK and the USA, and its main developing country partner, China? What are the implications of 'Brexit' - the UK's departure from the European Union - for Africa's trade? And how has the changing narrative of trade and trade integration impacted on Africa’s own strategy to integrate its market? This issue of Commonwealth Trade Hot Topics explores these questions and offers some policy recommendations for African policy-makers and trade negotiators.

See Journal of World Trade 51, no. 1 Wournal of World Trade 51, no 1 2017 by Faizel Ismail: The changing global trade architecture: Implications for Africa's regional integration and development

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

Session 4: Market integration and trade

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. 

For many of the African states, negotiations to liberalise trade in services is a relatively new phenomenon. For the Southern African Customs Union (SACU) member states, the only experience acquired on this subject was during multilateral negotiations in the context of the General Agreement on Trade in Services (GATS). Now SACU countries are confronted with the issue of services liberalisation in the context of the Economic Partnership Agreement (EPA) negotiations, seemingly without a clear and coherent strategy on how to deal with this new trade related issue. There are a number of reasons for this, and the paper attempts to present the possible explanations for this state of affairs. It starts with an assessment of the depth and scope of commitments undertaken during the Uruguay Round and the challenges created by the different degrees of liberalisation. This places the SACU member states at different stages in their services liberalisation process, which together with their different levels of development have the potential to produce a fragmented approach towards services liberalisation.

The paper further considers the effect services liberalisation currently has at the regional level of SACU, the regional level of SADC and the bilateral level of the EPA, as well as the future impact these services negotiations can have on the SACU member states. The SADC Protocol on Services, which is being circulated amongst member states for approval, is also analysed to provide an indication of what can be anticipated at SADC regional level.
The final part of the paper deals with the preparation for negotiations and the activities countries can carry out in order to equip government to more effectively understand and negotiate the complexities of trade in services. The preparation phase focuses on two aspects, that of defensive interests which feed into the formulation of the services offer and, that of offensive interests which play a role in the formulation of the services request. The paper considers, amongst other things, the sources where regulatory information on services can be found, how to conduct a trade regulatory audit, the alignment of international obligations with domestic laws, the creation of enquiry points, and the establishment of communication channels between government and stakeholders.

This report takes a closer look at the trade and the trade agreements between South Africa and its free trade agreement (FTA) partners. Although the pace of unilateral trade reform has slowed, trade liberalisation has occurred through the negotiation of a number of bilateral trade agreements.