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World Trade Organisation (WTO) Postpones Naming New DG

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World Trade Organization (WTO) has postponed naming of new director-general, adding that the scheduled for Monday November 9 has been delayed for l further consultations between member States on the issue. The decision means it is possible that the trade body will complete the year without appointing a substantive head.

The Geneva-based Organisation, that is concerned with the regulation of international trade between nations has announced that it had put off a meeting scheduled for Monday that had been called to appoint Nigeria’s Ngozi Okonjo-Iweala as its next director general.

David Walker, the New Zealand envoy to the WTO and who chairs the General Council, said the meeting of ambassadors scheduled for November 9 will be delayed “until further notice” and allow member states to consult.

Walker had on October 28 announced that Nigerian Ngozi Okonjo-Iweala had been the candidate “best placed to attract consensus support” compared with South Korea’s

The contest to find a new leader of the World Trade Organization has been thrown into uncertainty after the cancellation of a key appointment meeting following the US presidential election.

Donald Trump’s administration had opposed her selection in one of its final acts before the US election, despite the former Nigerian finance minister securing the overwhelming backing of the organisations 164 members.

Okonjo-Iweala had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing backing from the EU, China, Japan and Australia.

Trade experts said Joe Biden defeating Trump in last week’s election may have led to countries calling for a delay in the WTO leadership race, with the aim of securing the Biden White House’s backing for Okonjo-Iweala after he takes charge in January 20th, 2021.

The delay in selecting a new WTO director general comes at a fragile moment for the world economy amid the second wave of Covid-19, and after years of criticism of the WTO and calls for reform from Trump.

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Kenya-UK Trade Pact Awaits Approval from EAC Council of Ministers

The virtual meeting of the EAC Sectoral Council of the Ministers of Trade, Industry, Finance and Investment (SCTIFI) will also discuss other regional matters such as EAC policies on trade, non-tariff barriers, customs, budgets, standards and quality, industrialisation and the tripartite agenda.

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This week, the East African Council of Ministers will hold their last meeting of the year with Kenya hoping to get approval to separately sign a trade agreement with the United Kingdom ahead of the December 31 deadline.

The virtual meeting of the EAC Sectoral Council of the Ministers of Trade, Industry, Finance and Investment (SCTIFI) will also discuss other regional matters such as EAC policies on trade, non-tariff barriers, customs, budgets, standards and quality, industrialisation and the tripartite agenda.

Kenya is pegging its hopes on Article 37 of the EAC Customs Union Protocol, which allows partner states to separately conclude or amend trade agreements with foreign countries provided the terms do not conflict with the provisions of the Protocol.

Under the Customs Union Protocol, the first pillar of regional integration, East African Community countries are required to negotiate matters related to trade with third parties as a bloc. However, a member may separately negotiate bilateral trade agreements, subject to notifying other members.

Earlier this month, Kenya and the British government reached a critical agreement on a new trade deal that grants Kenyan products duty-free quota-free access to the UK market after December 31.

Related: Kenya, UK, Secure Trade Deal

The deal, which includes clauses from the old Economic Partnership Agreements (EPAs) under the European Union, is expected to be formalised through signing of the agreed texts by the two countries.

The British government is adamant with its timeframe, but it is willing to apply the Principle of Variable Geometry under the EPAs to allow EAC member states that are ready to sign the agreement while others join later.

“With respect to other East African states, the UK is willing to proceed with those that are ready and allow others to join at a later date as per the current EPAs text,” said Kevit Desai, Kenya’s Principal Secretary in the State Department of EAC Affairs.

Kenya is racing against time to individually negotiate and sign a new trade agreement with the UK to avoid paying duty on its products destined to the British market starting January, 1 2021.

The UK formally exited the European Union on January 31 with an 11-month transition period to re-negotiate new trade agreements with its trading partners outside the 27-member bloc.

Related: East African Countries Amass $73b in External Debt

All existing trade agreements with the UK under the EU terms, which are not rolled over, will expire on December 31.

East African member countries, which run a common Customs Union, are required to negotiate and sign this agreement as a bloc. However, Uganda, Rwanda, Tanzania, and Burundi appear not to be keen on the deal, thereby calling for the extension of timelines for the negotiations by one year, citing country specific issues including election cycles.

But, with or without a new trade agreement these four countries, which are classified as less developed countries, have a window to continue enjoying duty-free quota-free access to the UK market beyond the December 31 deadline under the “Everything but Arms” initiative introduced in 2001 under the EU’s Generalised Scheme of Preferences.

Kenya, on the other hand, is classified as a lower middle-income country.

The Kenya-UK agreement is expected to provide continuity for businesses, investors and supply chains besides setting foundations for further economic development.

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East Africa Optimistic the U.S. Will Revive Trade Talks

This came to the fore as leaders from the EAC congratulated Biden for his election win, with many expressing hopes that his presidency will boost ties with the regional bloc.

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The East African Community is optimistic that U.S. President-elect Joe Biden will revive the negotiations and implementations of the EAC-U.S. Trade and Investment Partnership.

This came to the fore as leaders from the East African Community congratulated Biden for his election win, with many expressing hopes that his presidency will boost ties with the regional bloc.

The Trade and Investment Framework Agreement (TIFA), which is a trade pact that establishes a framework for expanding trade and resolving outstanding disputes between countries, was agreed between U.S. and EAC partner states in June 2012, but was never implemented.

TIFA was signed on July 16 2008, as a framework for expanding trade and investment between the U.S. and EAC.

But since United States President Trump took over from his predecessor Barack Obama in 2016, not much has been heard from the arrangement.

Read also: Kenya, UK, Secure Trade Deal

“We all look forward to working with the new US administration and of course hope that America’s trade and investment policies will also advance the interests of East Africa. Reviving TIFA is one of them,” said Prof Manasseh Nshuti, EAC chairperson of the Council of Ministers, who is also Rwanda’s Minister of State in charge of the East African Community.

“EAC is better negotiating multilateral trade rather than bilaterally. This is because at the end of the day, what happens in Kenya affects Rwanda, Uganda, and Tanzania, in terms of trade and investments.”

In April 2016, Ministers from EAC and U.S. signed the EAC-US Co-operation Agreement on Trade Facilitation, Sanitary and Phytosanitary (SPS) Agreement and Technical Barriers to Trade (TBT) but so far very little has been implemented despite the existence of agreed work plans.

Under the United States-East African Community-Trade and Investment Framework Agreement, partners consult on a wide range of issues related to trade and investment, but under President Donald Trump, this was never implemented.

Related: Kenya to be in breach of EAC, AfCFTA rules in proposed American trade deal

Topics for consultation and possible further cooperation include market access issues, labour, the environment, protection and enforcement of intellectual property rights, and in appropriate cases, capacity building.

However, since 2016, the negotiations for the regional investment treaty stalled due to lack of consensus on the approach for discussions on the regional investment treaty.

“The U.S. has TIFAs with countries at different levels of development and trade and investment interests but none with the EAC,” said Dr. Peter Mathuki, CEO East African Business Council.

“As the private sector, we are expecting the revival of an up-scaled US-EAC Trade and Investment Partnership under U.S. presidential elect Joe Biden.”

EAC’s Director-General of Customs and Trade Kenneth Bagamuhunda also said he looks forward to a return to a multilateral trading system “where the trade rules will prevail over unilateralism”.

“We look forward to engagement with the US as a bloc at EAC and Continental level.”

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Ivory Coast, Ghana Cancel Hershey’s Cocoa Sustainability Schemes

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The world’s largest producers of cocoa, Ivory Coast and Ghana have cancelled sustainability schemes organised by US-based chocolate manufacturer, Hershey.

Both countries accused the company of avoiding the payment of a cocoa premium, aimed at improving the financial state of farmers in their countries.

According to Reuters, both countries found Hershey demanding very high volumes of physical cocoa on the ICE futures Stock exchange. The countries, who produce 2/3rd of the world’s total cocoa said the company did that to avoid paying the premium, called the living income differential (LID).

The countries have also accused Fuji Oil Holdings of playing a part in helping Hershey in the schemes.

The schemes, according to the chocolate manufacturers are to protect cocoa of any environmental and human rights abuses, meaning it was rightly sourced and is devoid of any problems that will affect its global sales. The company added that by the West African giants’ disruption of the schemes, farmers may not be able to get premium on their products again.

Hershey is the manufacturers of Hershey’s Kisses and Kit Kat and source for their cocoa mainly from Ghana and Ivory Coast.

Hershey recently entered into a deal to make physical cocoa available at the ICE Futures exchange. This is expected to reduce demands in cocoa from Ghana and Ivory Coast and also avoid the premium charged by the government.

Last year, the Ghanaian and Ivorian governments set the LID for cocoa at $400 a tonne. This is to ensure that farmers make as much money as possible but the harsh realities of the coronavirus pandemic have dealt sales a huge blow.

“The Cocoa Merchants Association of America (CMAA) is condoning and conniving with American companies against poor West African cocoa farmers”,  regulators in both countries said.

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