What is Africa’s Role in the International Trade Dispute Process?

A number of countries throughout Africa have experienced economic growth and thus, have become competitive players in the international market. The success of a number of African economies has been documented by institutions over the last five years such as McKinsey and Company and the Center for Global Development. While African countries have experienced economic growth, their role in protecting their interests in the global economy and shaping fair trade through the World Trade Organization (WTO) dispute settlement process remains quite small.

As African economies rise in the global context, two important questions remain: 1) How engaged are African countries in the WTO dispute settlement process? and 2) What can be done to ensure that these emerging markets also emerge as strong players in terms of ensuring fairness in the international trade system?

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The WTO dispute settlement process allows a country to bring a case against another WTO member that it finds is in violation of international trade rules. For example, this month, the United States filed a case against China for its alleged use of illegal export subsidies. In another case, Brazil filed a complaint against the United States for its cotton subsidies, which was finally resolved in October 2014 after a decade long dispute. The United States agreed to pay $300 million to Brazilian cotton farmers.

Government subsidies distort international trade and thus, are illegal. A number of studies have shown how many African countries have been negatively impacted by U.S. cotton subsidies (see my earlier post on subsidies and their impact on African countries). Nevertheless, not a single African country has brought a case to the WTO against these types of unfair trade practices. Rather, many of these same countries have joined cases brought by a larger developed or developing country. In other words, African countries mainly serve as third parties to international trade dispute cases (see the Appendix for the table highlighting the types of dispute cases that African countries are involved in).  To restrict the harmful effects of unfair trade practices, it is important for these growing African economies to understand and take part in the dispute settlement process.

Unfortunately, a number of challenges make it difficult for many of the countries to become more involved such as the lack of expertise and limited financial resources.

While financial resources will certainly help, technical assistance and training are also necessary to develop the capacity within any given African country to successfully challenge unfair trade practices on its own.

International Trade Examiner is the official blog for the Global Research Institute of International Trade

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For updates on Dr. Jackson’s upcoming university panel discussion on US-Africa trade, subscribe to GRIIT’s March newsletter 

For Dr. Jackson’s research on small state bargaining power within the WTO and her policy prescription for strengthening the WTO dispute settlement process for small states, click here.

Appendix:

African Countries and International Trade Dispute Cases

Country
Dispute Cases: Complainant, Respondent and Case
BeninBrazil case against U.S. cotton subsidies (resolved October 2014)
CameroonEcuador, Guatemala, Honduras, Mexico, U.S. case against the European Community (EC) banana regime (resolved November 2012)
ChadBrazil case against U.S. cotton subsidies (resolved October 2014)
Côte d’Ivoire1) Ecuador, Guatemala, Honduras, Mexico, U.S. case against the EC banana regime (resolved November 2012)

2) Australia, Brazil and Thailand cases against EC export subsidies on sugar (concluded May 2005)
Ghana Ecuador, Guatemala, Honduras, Mexico, U.S. case against the EC banana regime (resolved November 2012)
Kenya Australia, Brazil and Thailand cases against EC export subsidies on sugar (concluded May 2005)
Madagascar 1) Ecuador, Guatemala, Honduras, Mexico, U.S. case against the EC banana regime (resolved November 2012)

2) Australia, Brazil and Thailand cases against EC export subsidies on sugar (concluded May 2005)
Mauritius1) Ecuador, Guatemala, Honduras, Mexico, U.S. case against the EC banana regime (resolved November 2012)

2) U.S. case against Mexico for dumping high fructose corn syrup (concluded November 2001)

2) India case against EC over the latter's conditions for granting tariff preferences to developing countries (concluded July 2005)

3) Australia, Brazil and Thailand cases against EC export subsidies on sugar (concluded May 2005)

NamibiaNorway case against EC Measures Prohibiting the Importation and Marketing of Seal Products (concluded June 2014)
Nigeria
1) India, Malaysia, Pakistan, Thailand case against the U.S. prohibition of certain shrimp and shrimp products (concluded November 2001)

2) Ukraine, Honduras, Dominican Republic, Cuba, Indonesia cases against Australia Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (panel composed May 2014)
Senegal1) Ecuador, Guatemala, Honduras, Mexico, U.S. case against the EC banana regime (resolved November 2012)

2) India, Malaysia, Pakistan, Thailand case against the U.S. prohibition of certain shrimp and shrimp products (concluded November 2001)
South Africa 1) Canada, Brazil cases against U.S. corn and other agricultural subsidies and export guarantees for agriculture (agreement to create a panel but panel members not chosen since December 2007)

2) Ukraine, Honduras, Dominican Republic, Cuba, Indonesia cases against Australia Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (panel composed May 2014)

3) EU case against Brazil's taxation measures (agreement to create a panel but members not yet selected as of December 2014)

4) EU case against Russia's import measures for pork, live pigs and pig products (panel composed October 2014)
Swaziland Australia, Brazil and Thailand cases against EC export subsidies on sugar (concluded May 2005)
TanzaniaAustralia, Brazil and Thailand cases against EC export subsidies on sugar (concluded May 2005)
ZambiaUkraine, Honduras, Dominican Republic, Cuba, Indonesia cases against Australia Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (panel composed May 2014)
Zimbabwe1) Canada case against EC measures on asbestos and products containing asbestos (concluded April 2001)

2) Ukraine, Honduras, Dominican Republic, Cuba, Indonesia cases against Australia Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (panel composed May 2014)

*Note: The European Community (EC) refers to the various European international-level organizations that are incorporated under the present-day European Union (EU).

Source: World Trade Organization

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1st Annual Educational and International Business Tour to Europe 2015

                               Prague, Czech Republic

The Global Research Institute of International Trade (GRIIT), has joined with the Brockman Institute to offer an educational and business tour to Europe in November 2015. We invite individuals with an interest in economics, business, history and culture to join us on a three-country tour that includes Germany, Poland and the Czech Republic.This trip is timely as Europe continues going through a number of economic reforms that will have an impact on the U.S. economy and businesses. Furthermore, the United States is negotiating a trade deal with the European Union, which will provide additional opportunities for doing business in the European market.

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Following the trip, you will receive a certificate of participation. Businesses will receive a $150 tax credit.

Why this trip? GRIIT emphasizes exporting to other markets around the globe from an economic and policy perspective. However, business deals can fall through just by failing to understand a country’s history and culture. The implementation of programs and projects can also fail by not taking the time to learn about a country and its appropriate regulatory policies before-hand. GRIIT’s partnership with the Brockman Institute moves GRIIT toward its efforts to offer not just offer trade missions but also first-hand global business education at a reasonable price.

What will you learn? You will learn about the economic changes of the three countries over the past seven decades. This is also a great way to make connections with key individuals who can assist with doing business in these three countries, etc.

If you are interested in attending, please send an e-mail to  griit@griit.org. You will receive the itinerary and registration form. 

If you are unable to attend, it would be greatly appreciated if you could forward this message to your colleagues, professional organizations, etc. 

The Brockman Institute has over 30 years of experience with the planning and successful implementation of educational tours all around the world. In fact, several individuals who traveled to Egypt with the Brockman Institute in 2009 continue to talk with me about their fun-filled and highly educational experience. For this reason, I am truly honored to collaborate with such an organization.

Sarita D. Jackson, Ph.D.
President and CEO
Global Research Institute of International Trade
(310) 912-7950 (office)
www.griit.org

 

 

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Update: Recent TPP Talks in New York

Optimism remains regarding the ability to conclude the TPP talks this year. At least that is what several participants expressed during a panel at the US-Australia Dialogue: Assessing the Future of the Asia-Pacific, which took place on Friday at UCLA, two days before the end of the most recent talks in New York. So what came of these talks?

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The TPP talks still have a veil of secrecy. One major breakthrough is that Japan has agreed to phase out tariffs on a specified amount of U.S. pork over a 10 year period.

Intellectual property remains an issue of contention.

With such limited information, it is difficult to provide a well informed argument about the opportunities for businesses in the United States, particularly the small and medium-sized enterprises (SMEs).

 How should SMEs be involved in the TPP trade agenda?

If you are a business owner, what questions do you have about the Asia-Pacific market and the TPP?

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TPP Talks in New York on Monday

The TPP talks continue despite a number of missed deadlines. The chief negotiators from the 12 member countries will meet in New York on Monday for negotiations that will continue through February 1st.

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The focus will be both on tariffs and intellectual property rights, according to public reports.

President Barack Obama referenced the trade negotiations with the Asia-Pacific region and pushed for trade promotion authority to conclude these negotiations during this week’s State of the Union address.

The chief negotiators aim to conclude the talks by this spring. We will see if this deadline is finally met.

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The Top 5 Trade Policies to Follow in 2015

This year is an important year for a number of trade policies and agreements between the United States and countries around the world. These trade policies are important in determining U.S. competitiveness around the globe.

Trade Networking renjith krishnan

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1. African Growth and Opportunities Act (AGOA)

AGOA was signed in 2000 by President Bill Clinton to promote trade between the United States and eligible Sub-Saharan African countries. (For details about what AGOA means for US and Sub-Saharan African businesses, check out my earlier posts.) AGOA is set for reauthorization this year. Otherwise, this piece of legislation will expire on September 30, 2015. In other words, the duty-free access that African exporters enjoy in the U.S. market will come to an end if AGOA is not reauthorized. President Obama supports reauthorization, but the question remains as to what the U.S. Congress will do.

2. Dominican Republic-Central American Free Trade Agreements (DR-CAFTA)

DR-CAFTA  took effect in the United States, El Salvador, Guatemala, Honduras, and Nicaragua in 2006; the Dominican Republic, 2007; and Costa Rica, 2009. This year, all duties placed on manufactured goods traded between the seven countries will be completely eliminated provided that they satisfy certain rules. (See earlier posts on DR-CAFTA rules that producers must follow to enjoy duty-free treatment.)

Additionally, Nicaragua no longer enjoys a special benefit known as Tariff Preference Levels (TPLs), in which apparel made of certain cotton and man-made fiber and assembled in Nicaragua could enter the U.S. market duty-free regardless of where the fabrics were produced. These TPLS were designed to help Nicaragua, since its textile industry is extremely small. All other DR-CAFTA countries can only use fabric that originates in one or more of the DR-CAFTA countries. Efforts are being made by various organizations within the textile and  apparel industry, such as the United States Fashion Industry Association and the American Apparel and Footwear Association, to extend the TPLS for Nicaragua. (For other posts about DR-CAFTA, see U.S. labor complaint against Guatemala)

3. National Export Initiative (NEI)

President Obama announced the NEI in January 2010. The goal of the NEI was to double U.S. exports by January 1, 2015. According to numbers provided by the U.S. Bureau of Economic Analysis, U.S. exports of goods and services to the world reached $1.6 trillion by the end of 2009. That figure reached $2.3 trillion in 2013. The data available covering January-November 2014 shows an export value of $2.1 trillion. The next report should have the final numbers for all of 2014. It appears that U.S. exports have increased but have fallen short of actually doubling in growth.

4. Trans-Pacific Partnership Agreement (TPP)

The TPP will be a large trade deal that the United States has signed with multiple countries throughout the Asia-Pacific region. (See earlier posts describing the TPP in detail.) However, negotiations still continue after missing a number of deadlines. This year, media reports continue to show the opposition to the TPP. The question remains as to whether this will be another year in which the talks fail to make any significant progress or the year that the deal collapses altogether.

5. Trans-Atlantic Trade and Investment Partnership Agreement (T-TIP)

The T-TIP is another agreement that is still being negotiated. Similar to the TPP, this potential trade deal between the United States and the European Union continues to face an uphill battle on both sides. (For a detailed description of T-TIP, click here.) For example, just this week, the European Commission published the results of a public consultation conducted in March 2014. Many respondents voiced their opposition to the T-TIP altogether and others expressed serious concern about investor protection. In a Pew Research Center report, many Americans support T-TIP but express concern about certain points within the agreement such as removing all investment restrictions on trade between the United States and the EU.

We will see what will become of these five trade programs and free trade negotiations, especially with the shift in the U.S. Congress following the midterm elections. (See my analysis of the midterm elections and what it means for the U.S. trade agenda.)

 

Image courtesy of renjith krishnan at FreeDigitalPhotos.net

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