Features

Issue 03/2014 - News brief

30 September 2014
ITC News
US to extend long-standing trade deal with Africa

The United States of America invited the leaders of nearly 50 African nations for the first US-Africa Leaders Summit in Washington, DC, in August. The event was meant to reinforce economic ties and trade between the United States and Africa by extending the African Growth and Opportunity Act (AGOA). The accord gives exemptions on U.S. tariffs and quotas to boost trade and the economic growth of sub-Saharan African countries.

As China strengthens ties to Africa and the European Union (EU) negotiates its own free-trade agreement with Africa, the United States seeks to maintain its strong economic ties with the continent. While the act has not stimulated trade with Africa to the extent predicted, progress is being made. Non-oil AGOA trade rose to US$5 billion in 2013 from US$1.4 billion in 2001. The AGOA and other free-trade treaties give small and mediumsized enterprises (SMEs) greater opportunity to export with less tariff measures with which to comply. The act must be re-authorized by September 2015.

World Bank aims to light up six African countries

The World Bank Group has committed US$5 billion in new technical and financial support for energy projects in Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania, countries that have partnered with U.S. President Barack Obama’s Power Africa initiative.

Making the announcement on the second day of the first U.S.-Africa summit, World Bank Group President Jim Yong Kim said that the new financial commitment was urgently needed to generate more electricity for the people of Africa, 600 million of whom have no access to it. This is despite the fact that Africa possesses some of the world’s largest hydropower, geothermal, wind and solar potential, as well as significant oil and natural gas reserves.

Canada, EU make strides toward finalizing free-trade deal

After months of deliberation Canadian and European Union negotiators have finalized the text of their free-trade deal. The agreement, which would eliminate virtually all tariffs on both sides, may take up to two years to come into effect. The 1,500-page agreement must still be translated into 23 languages, reviewed by lawyers and then ratified by the European Parliament and the European Commission.

Full implementation is set for mid-2016 and the agreement may undergo some changes before it is ratified. The free-trade agreement would help create jobs and economic opportunities in Canada and in Europe.

EBRD funds Barclays Bank Egypt’s US$20m project

The European Bank for Reconstruction and Development (EBRD) has announced support for the expansion of international trade in Egypt by providing US$20 million as a trade facility to Barclays Bank Egypt as part of the EBRD’s Trade Facilitation Programme (TFP). The facility will allow the EBRD to issue guarantees to international commercial banks covering political and commercial payment risk of the transactions taken by Barclays Bank Egypt.

The partnership indicates a positive outlook to the enormous potential of the trade industry in Egypt. Barclays aims to become the go-to bank and trade partner for its customers in Egypt. The partnership will allow Barclays to provide loans to local exporters, importers and distributors. The TFP currently includes more than 100 partner banks in 23 countries where the EBRD invests.

Thailand urged to regulate its international wildlife trade

The Convention on the International Trade in Endangered Species (CITES) has warned Thailand that it faces an international wildlife trade ban unless it reins in its ivory sector. CITES has set Thailand an August 2015 deadline to regulate the illegal ivory market. Thailand is now seen as the key offender of the ‘Gang of Eight’ countries that have faced scrutiny over the ivory trade. The seven other countries on that list are China, Kenya, Malaysia, the Philippines, Tanzania, Uganda and Viet Nam.

Failure to comply with CITES regulations could end in a ban in ivory exports and the suspension of all trade in the 35,000 species listed with CITES. This would restrict Thailand in trading orchids and exotic wood, both of which are significant export products for the Southeast Asian nation.

Chinese Taipei, Philippines work to further trade ties

Chinese Taipei and the Philippines, which have been working to strengthen economic relations for years, have continued to experience increasing amounts of bilateral trade. According to Chinese Taipei’s Ministry of Economic Affairs, trade between the two countries doubled from US$6.05 billion in 2009 to nearly US$12 billion in 2013.

Leaders from both countries joined in the Philippines-Taiwan Joint Economic Conference last November, where the Taiwan External Trade Development Council and the Philippines’ Center for International Trade Exposition and Missions signed a letter of intent to promote bilateral trade and investments. The two countries have also been discussing an agreement on maritime law enforcement cooperation to make trade and transportation between them more symbiotic.

International organizations reaffirm support to implement Trade Facilitation Agreement

Several international groups have stepped forward to confirm their commitments to the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA). The United Nations Conference on Trade and Development (UNCTAD); the International Trade Centre (ITC); the Organization for Economic Cooperation and Development (OECD); the UN Economic Commission for Europe (UNECE); the World Bank Group (WB) and the World Customs Organization (WCO) reaffirmed their support to developing, transition and least-developed economies in implementing the accord.

The organizations issued a joint statement on 22 July recognizing the potential benefits to developing economies from the TFA. The organizations plan to work in close collaboration with each other and the WTO in sharing information on trade facilitation to respond to gaps in technical assistance and capacity building. The statement came as a response to the needs of developing economies for technical assistance, capacity building and support in implement and reaping long-term benefits of the TFA.