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Thursday, 04 September 2014

Improving Regional Integration in Africa

The resolution of outstanding issues under the Economic Partnership Agreements, among others, will no doubt facilitate regional trade in Africa, writes Eromosele Abiodun

In the years before the global financial crisis in 2008, global trade increased exponentially. While African countries benefited from this increase, their share in world trade has remained low. Africa’s export trade amounts to only about three per cent of world exports. This poor trade performance partly relates to trade protection outside Africa against African products, but it also stems from constraints that inhibit trade within Africa. With the expectation of a generally moderate recovery of the global economy and of world trade, it is even more important than before to foster African countries’ trade with economies both outside and inside Africa.

Experts have said rapid conclusion and resolution of the outstanding issues in the Economic Partnership Agreements (EPAs) negotiations are crucial to Africa’s medium-term prospects in both regional and international trade. Indeed, among the different measures that several advanced countries adopted in 2009 to curb the effect of the financial crisis, trade protectionism has been on the rise. Protectionism increased despite repeated assurances in the context of the G20 meetings in London, as well as in the context of World Trade Organisation (WTO) talks.

Often stimulus packages were geared to favour domestic sectors, such as through export support, or to favour buying, lending, hiring or investing in local goods and services. Such measures clearly discriminate against developing countries, including those in Africa, on several levels. Unfortunately, African governments lack the resources to curb the domestic impact of the crisis with the same type of measures. Also, African companies face unfavourable treatment precisely in markets where additional spending is being promoted. Hence, with these new measures African products easily face discriminatory treatment in relation to similar domestic products and services in developed countries, despite the general agreements about preferential treatment they may enjoy.

Source: thisdaylive.com