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2017 | Book

Negotiating South-South Regional Trade Agreements

Economic Opportunities and Policy Directions for Africa


About this book

This book provides a comprehensive analysis of South-South regional trade issues, with a particular focus on sustainably fostering Africa’s regional trade agenda. It examines the extent to which South-South regional trade agreements (RTAs) have contributed toward enhancing regional integration and economic expansion in Africa in particular, and in the South in general. The authors recommend new conceptual frameworks, appropriate initiatives, and workable policy recipes to help South-South RTAs enhance Africa’s economic transformation trajectory.

The book underscores the geo-politics, as well as the opportunities and challenges that emerging economies now represent for Africa in the context of South-South regional trade policy. Readers will learn how Africa can strengthen its regional trade game by securing and building on the positive outcomes of South-South RTAs.

Table of Contents

Introduction: Increasing Dynamics and the New Trading Ecosystem for the South
As a result of the June 2016 referendum, 52 % of Britons voted to leave the European Union (EU) as a right under Article 50 of the EU Treaty. This political and socio-economic development in the global North has far-reaching implication for both North–South trade relations and South–South (S–S) regional trade agreements (RTAs). Brexit and its aftermath demonstrate the importance role that S–S RTAs could play in creating markets, jobs, and wealth in Africa. However, there is a need to take a critical review of economically functional S–S RTAs tools and approaches that can inform the development of higher impact and more scalable initiatives towards transforming African economies.
This ten-chapter book provides a comprehensive analysis of the South–South regional trade issues, with special focus on sustainably fostering Africa’s regional trade agenda. It also provides an innovative analysis of Africa’s RTAs from a bilateral trade perspective, thereby emphasizing the need for Africa to go beyond its focus on the trade of competitive goods towards reflecting the counterparts’ markets or growth potentials in RTAs negotiation strategies. Lastly, it discusses the contributions of S–S RTAs towards enhancing regional integration and economic expansion in Africa in particular, and the South in general.
Gbadebo Odularu
The Big Picture: South–South Regional Trade Agreements within the Context of the Multilateral Trade Systems
The last few decades have witnessed a dramatic explosion in the numbers and membership of regional trade agreements (RTAs). In fact, with the establishment of the WTO, and as of February 2016, some 625 notifications of RTAs (counting goods, services, and accessions separately) had been received by the GATT/WTO. The global proliferation of RTAs is partly explained by the seemingly controversial nature of the Doha Round of trade negotiations. With the grudgingly low progress at the multilateral level, many major players in global trade are increasingly resorting to RTAs to advance their trade, investments and commercial interests. In fact, the United States of America (USA), which is historically a strong proponent of the multilateral trading system is focusing increasingly on discriminatory FTAs. Another part-reason for the increased focus on RTAs in particular, and South–South RTAs in general, is due to the need to address many ‘behind-the-border’ issues such as competition and investment regulations, in addition to traditional trade issues such as border tariffs. Based on this background, this chapter provides insightful and actionable policy recommendations towards better understanding South–South RTAs within the context of the multilateral trade system.
Gbadebo Odularu, Mariama Deen-Swarray, Ciliaka Gitau

Selected Cases on South–South Regional Trade Agreements

Trading with China: How can Africa Benefit?
Since arriving in Africa in the 1800s, the trading relationship between Africa and China has evolved and intensified in many ways. As this relationship intensifies, so do the discussions of the opportunities and challenges of this relationship. Much of these discussions and debates point to China’s exploitation of the relationship. Dumping of low quality products, lack of transparency, importation of labour, and lack of concern for environment management are some of the concerns being raised. This chapter calls for a more sustainable trading relationship between China and Africa, in which African nations can become more active participants, less dependent on Chinese product and where local context and needs are considered. We provide a short history of the trading relationship between China and Africa. Various trade patterns between Africa and China are then critically examined, with a focus on the opportunities and challenges of the trading relationship on African nations. Specific examples and cases are outlined. Based on these discussions, we develop a conceptual framework that outlines a strategy for a more sustainable agreement between China and Africa. The framework includes formulating transparent agreements, use of local labour, consideration of local community needs, especially with technology transfer, safety and quality of imported goods, and finally African nations taking an active role in representing their interests. Taking into consideration the wide range of political, economic, social and environmental experiences and situations in Africa, we close with a set of recommendations that, if considered, can yield greater benefits for African nations as they continue to trade with China.
Bamidele Adekunle, Monika Korzun
Enhancing Africa–India Regional Trade Agreements: Issues and Policy Recommendations
While Africa is not as developed as most of the other continents, its growing economy and high populace present great business opportunities hence, it is a promising destination for global investment. Comparatively, the Asian population is higher than that of Africa yet issues of food deficiency and low agricultural production among others are more pronounced in Africa than Asia. Specifically, India’s green revolution transformed the country from a food deficit to a food self-sufficient nation. Perhaps, this justifies collaboration between the two parties. An example of such collaboration is through trade agreements which over the years, have been supported on the basis of fostering economic growth through increased trade. However, the critics of trade agreements have also argued that it can be exploitative. This chapter demonstrates that while the benefits of increased trade between the two parties cannot be disregarded, there have also been challenges. We therefore recommend that in addition to infrastructure improvement; improving market information flow; institutional support and adoption of import substitutability policy coupled with a few protectionist policies will maximize the benefits from trade agreements.
Chris Shimba Ochieng, Philip Musyoka
Understanding the Dynamics of India-Africa Trade Negotiation Game: Lessons and Policy Directions
A perusal of the literature has shown that trade agreements have different impact on countries due to their level of development, especially in trade potentials. There have been some trade agreements between Africa and India, a south–south trade relation, which are accompanied with outcomes that are based on output, macroeconomic stability and compliant with the agreements reached at different point in time. This study examines the effects of Africa’s trade agreements with India on Africa’s exports. This study found that trade agreements in this trade relation is marginally trade enhancing and it is also discovered that the restrictiveness of Indian trade policy does not debar exports from Africa from accessing the market, however, the non-tariff barrier are more pronounced than the tariff barriers.
Olayinka Idowu Kareem
Advancing Regional Trade Interests between Africa and South Korea: Emerging Issues, Concerns and Policy Options
Africa’s trade relations with South Korea has undergone some unprecedented dimensions in the past two to three decades, partly due to Africa’s increasingly macroeconomic and trade policy reforms. Within this context, it becomes crucial for Africa to unleash the potential of South–South RTAs and development cooperation, in which its collaboration with South Korea comes very strategic. Thus, Africa–South Korea trade relations within a South–South RTA aims to facilitate trade opportunities between South Korea and Africa, and through the creation of effective bilateral trade and development cooperation initiatives in stimulating growth capacities, trade and investment flows when embedded in a broader development cooperation strategy. Based on this background, the primary objective of the study is to examine and discuss the magnitude, composition and structure of Korea-Africa trade relations. Exploiting the untapped and growing trade opportunities for Korean and African businesses, the study recommends ASKRTIIM as a bouquet of policy options towards advancing Africa-South Korea trade interest within the South–South regional trade and business policy space.
Gbadebo Odularu, Chinedu Samuel Okonkwo
Africa–Brazil Regional Trade Agreements: Looking Forward with Proactive Strategies
Trade between Africa and Brazil has seen tremendous growth over the years, amidst continued challenges. This increase in trade has been partly attributed to the fostering of political relations between the two regions. However, the concentration and structure of trade between the regions need to improve. Imports from Brazil have been mainly in resource-intensive manufactured goods and technological products whilst the bulk of exports into Brazil are primary resources and products. Trading pattern of this nature tends to put African nations at a disadvantage as primary goods are susceptible to shocks. Political and cultural partnerships have contributed to deepening the ties between Brazil and Africa, thereby increasing the exchange and transfer of knowledge. This relationship could be further strengthened if the two regions can focus on enhancing infrastructure development and trade facilitation. Future trade agreements should therefore endeavour to develop policies that will create enabling environment for development. Examples of such policies include fostering direct air and sea transport between major cities in Brazil and Africa, appropriate use of information and communication technologies, use of single window and harmonization of processes and procedures.
Bamidele Adekunle, Mariama Deen-Swarray

Recent Issues on Selected Intra-African Regional Trade Agreements (RTAs)

Understanding Bilateral Trade Flows and Negotiating South-South RTAs: Lessons and Policy Directions for the Tripartite Free Trade Area Agreement (TFTA)
Despite the existence of many regional economic communities (RECs) in Africa, intra-regional trade remains dismally low compared to other RECs in Europe, Asia and Latin America. Hence, the need for a paradigm shifts to the Tripartite Free Trade Area Agreement (TFTA) to enhance and reinvigorate the African integration agenda. Consequently, this study explores the benefits and obstacles that can promote or hinder the established TFTA in Africa. The three RECs will need to focus their efforts on making the TFTA effective by covering key areas of trade in goods and services, investment, competition policy, technical barriers to trade, electronic commerce, customs cooperation, rules of origin, intellectual property and dispute settlement.
Musibau Adetunji Babatunde, Gbadebo Odularu
Leveraging Trade Facilitation (TF) Measures to Maximize the Benefits of Regional Trade Agreements (RTAs) in West Africa
As a key component of the World Trade Organization (WTO) Doha Development Agenda (DDA) and Regional Trade Agreements (RTAs), trade facilitation is essential to reducing trade transaction costs and it remains an effective instrument for fostering regional trade. Trade Facilitation (TF) exists on the agenda of all West African based RTAs. However, the implementation of World Trade Organization (WTO) provisions on trade facilitation has always been a cause for concern for West African countries, dating back to 1996 when trade facilitation was introduced in the WTO agenda at the Singapore Ministerial Conference, as one of the ‘Singapore Issues’—in the context of simplifying trade procedures. One of the core costs associated with trade facilitation in West Africa is that improved trade facilitation within the context of Regional Trade Agreements (RTAs) will require increased technical and financial assistance to narrow the technology and human resources gaps that exist between developed and developing countries.’ Based on this background, this paper attempts to provide an overview of the RTAs in West Africa. Further, it examines and discusses the trade facilitation provisions and issues within the context of West African RTAs. This discussion uses information from the WTO’s RTA database to provide a comprehensive description of the trade facilitation content of existing RTAs in West Africa. In conclusion the paper proposes policy suggestions to leverage TF to maximise the benefits of RTAs in West Africa.
Gbadebo Odularu, Adenike Odularu
Conclusion: Emerging Issues, Strategic Priorities for South–South RTAs Research, and Economic Policy Directions for Africa
The central role of South–South RTAs in the workings of African economies cannot be overemphasized. It provides strategic and significantly productive investment opportunities for the African businesses by increasing the benefits to regional trade liberalization and contributing to job creation, wealth accumulation and macroeconomic transformation. This concluding chapter briefly examines the basic pitfalls in Africa-related South–South RTAs processes, and also presents the understanding for South–South RTAs research agenda as well as the motivation for relevant economic policy direction in Africa.
Gbadebo Odularu
Negotiating South-South Regional Trade Agreements
Gbadebo Odularu
Bamidele Adekunle
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