Global news

4 July 2012

US, African Officials Push for Extension of AGOA Textile Provision

African and US government officials renewed calls on 13 June for the US Congress to quickly extend the Third-Country Fabric (TCF) provision that allows several African countries certain benefits in the area of textile trade. However, observers note, the prospects for extending the measure ahead of a 30 September expiration date are becoming increasingly slim as the US presidential election draws nearer.

While the textile provision enjoys broad bipartisan support in Congress, trade observers and officials alike note that the long legislative process and political dynamic involved could prevent the measure’s renewal before the end-September deadline, especially with the US presidential election kicking into high gear.

At a separate meeting in May, US Trade Representative Ron Kirk mentioned that the swift passage of legislation extending the provision was necessary to ensure African Growth Opportunity Act’s continued success, as well as the economic growth of sub-Saharan African countries.

African officials and US industry groups have similarly made a separate public call for the clause to be renewed arguing that TCF expiration could be devastating for both African apparel-producing countries and US businesses.

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Eurozone Struggles Dominate G-20 Agenda at Mexico Summit

The ongoing difficulties posed by the eurozone crisis took centre stage during the annual gathering of G-20 leaders in Los Cabos, dominating discussions that also touched on rising protectionist measures and the importance of open trade for the economic recovery.

However, extended details of how Europe plans to resolve its debt difficulties were limited in the final G-20 declaration to pledges that Euro Area members would take “all necessary measures to safeguard the integrity and stability of the area,” among other commitments.

Despite reaching consensus on the protectionism-related language, divides among G-20 members over rising trade barriers were evident at the high-level meet.

The communiqué of the G-20 leaders underscore several debated topics such as the Doha Development Agenda, the renewal of leaders’ commitment to sustainable development particularly for Rio+20 Summit and the promotion of food security.

In the absence of movement in the multilateral trade negotiations, the focus on bilateral and regional deals was also apparent at the G-20 summit, with support for such pacts expressed by various leaders. The probable extension of the Trans-Pacific Partnership (TPP) to Canada and Mexico and the possibility of an EU-US bilateral deal were both raised during the meeting.

As in previous years, the eurozone-heavy focus of the high-level gathering drew criticism from some observers, who argued that developing country concerns - such as in the area of food security - were being left by the wayside, despite strong language from both the B-20 and civil society groups that had called for more concrete action in this area.

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New US-Africa strategy unveiled

On 14 June 2012, the White House announced the new US strategy toward Sub-Saharan Africa (SSA), which derives from a Presidential Policy Directive. It was released as US officials hosted a meeting on the US African Growth and Opportunity Act of 2000.

The US Strategy toward Sub-Saharan Africa constitutes the first document that clearly establishes the official strategy of the United States toward Sub-Saharan African countries.

Four pillars constitute the new plan: 1) strengthen democratic institutions in SSA countries, 2) spur economic growth trade and investment, 3) advance peace and security and, 4) promote opportunity and development.

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US – African Trade and Investment framework expanded

Last week, US and South African representatives signed a Trade and Investment Framework Agreement (TIFA), which “amends the TIFA signed in 1999…[and] deepen[s] the U.S.-South Africa trade and investment relationship”.

Co-signatories, US Trade Representative Ron Kirk and South Africa Trade Minister Rob Davies, presented the development as an opportunity to provide a forum to further address trade issues, helping to enhance the overall trade and investment relations between the two countries.

Following the signing, Demetrios Marantis, Deputy United States Trade Representative, and Minister Davies co-chaired the first TIFA Council meeting, which examined the work achieved so far between the two countries.

Building on the foundations of TIFA and AGOA, the US Trade Representative and the East African Community member states - including Kenya, Tanzania, Uganda, Rwanda and Burundi - signed an agreement to pursue new trade and investment partnership. Under this new partnership, the governments will work to reduce trade barriers, improve the business environment, encourage investment regimes, and enhance two-way trade.

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EU MEPs voted for a two-year extension for ACP countries to ratify their EPAs

On 21 June 2012, the trade committee of the European Parliament voted to extend a two-year extension period for ACP states to ratify and finalise their EPAs before losing their preferential access to the EU market that they have been enjoying since 2007.

Eight ACP countries are concerned by this regulation: Botswana, Namibia, Cameroon, Ivory Coast, Ghana, Fiji, Kenya and Swaziland. Another nine ACP countries will continue to benefit from the EU’s Everything But Arms (EBA) duty-free, quota-free scheme for the least-developed countries and will therefore not be affected by the new arrangement.

The draft legislative resolution was passed by 25 votes to 2, with 2 abstentions.

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Rwanda losing patience over neighbour’s slow removal of trade barriers

Rwanda has threatened to take it’s neighbours to court over the continued existence of non-tariff barriers (NTB) in the East African Community (EAC). It also called-upon the EAC to introduce incremental and legally binding commitments to eliminate NTBs, along with penalties for those countries failing to comply.

In principal, the East African Community has already agreed to eliminate NTBs under the Protocol, which was signed in July 2010. The problem is with the pace of this elimination, particularly within the landlocked countries of Uganda, Rwanda and Burundi. These countries incur the greatest costs thanks to their distance from the major ports of Mombasa and Dar es Salaam.

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