With no shortage of shocking headlines in the past few weeks, it’s understandable that many Canadians might’ve missed that the Trudeau government launched free trade negotiations with the world’s fifth largest economic market — one with over 270 million people and a GDP of more than $3 trillion dollars. In fact, they can even be forgiven for not knowing it by name:  Mercosur. Mercosur is the world’s fourth largest trading bloc, comprised of some of the most important economies in South America: Brazil, Argentina, Paraguay, and Uruguay. Argentina and Brazil, in particular, are high-growth markets both rich in natural resources and home to expanding middle class populations.  They are so-called ‘emerging’ markets, not unlike Mexico, Nigeria, and South Africa. With the continued uncertainty around NAFTA, and the slow pace of talks with India and China, Mercosur represents a welcome addition to Canada’s trade diversification strategy.  To date, Mercosur has not signed a free trade agreement with any western economy. Interestingly, and perhaps surprisingly, it only has trade agreements in place with Israel, Egypt, Palestine, and Lebanon. The renewed Canadian interest in Mercosur is due in large part to Argentina’s pro-business President Mauricio Macri — currently the Chair of Mercosur. Macri was elected in late 2015, shortly after Prime Minister Justin Trudeau, and moved quickly to transform a country that had effectively languished under his more erratic and controversial predecessor Cristina Fernandez de Kirchner. Since Marci’s election, Argentina has taken steps to liberalize the economy by lifting capital controls, removing export...

International trade has brought great benefits, but also inequities. By incorporating the philosophy of the SDGs into trade agreements, trade has the potential to benefit all. The value of world trade has nearly quintupled over the past 20 years from $5 trillion to about $24 trillion. Over the same period, trade has proved to be an excellent medium to leverage and promote economic growth, helping lift a billion people around the globe out of extreme and abject poverty. But in the last 10 years there has been a significant change in how international integration is perceived by the public and pursued in policymaking. As new middle classes have emerged in developing countries, middle-class prosperity in developed countries has found itself wavering. After the financial crisis of 2008, and especially in the last few years, the debate around the benefits of international trade has become much more fractious. One particularly contentious point is whether trade integration – establishing freer trade between countries – has resulted in inequitable economic growth, with some people and nations benefiting at the expense of others. Even the simplest classroom trade models acknowledge that trade benefits accrue unevenly. Trade integration can polarise the gap between the low and high skilled, suppress wage growth for workers facing overseas competition and create hardship and displacement for those who lose their jobs. As it happens, trade agreements are generally devised to reduce trade frictions across borders, while paying little attention to the distribution of the costs and benefits of trade...

Regional governments should move fast and expedite integration process to give the East African Community a competitive edge in proposed continental free trade zone, the East African Business Council (EABC) leaders have said. Last week, 44 African Heads of State and government officials signed the historic agreement which will enable the creation of the African Continental Free Trade Area (CFTA). The treaty, signed in Kagali on March 21, is expected to create largest trade bloc globally, with market share of almost $3.4 trillion and a population of over 1.2 billion people. However, EABC leaders say the slow implementation of projects expected to improve business climate in the region could put the region at a disadvantage when the treaty finally comes into force. This may leave the region behind if nothing is done to have the projects fast-tracked and late alone cost the region an opportunity to fully participate in the bigger “African market”. EABC vice-chairman and managing director Kigali Heights, Denis Karera, said full EAC integration will give the region competitive advantage, enabling it to benefit more from continental free trade zone. According to experts, the creation of African free trade area means regional blocs like EAC must find ways that will enable them to compete and benefit from the bigger market. Karera said delaying to ratify or implement some of the important regional treaties and projects could lender EAC almost non-player and irrelevant once CFTA comes to life. “The competition that comes up with CFTA can only be dealt...

The world's largest producer and consumer of peanut oil, China, which had a bad harvest in 2015, has since turned to Senegal, one of the few countries in the world not to consume all its production but also world's leading exporter of groundnuts. In 2015, the value of exports of this product in Senegal to Asia jumped from 1.7 to 30 billion CFA francs in 2017, according to the Ministry of Commerce, as per Afirmag. A vital sector for African economies Like Senegal, agricultural products are essential for trade in West Africa, for example. Their place in the various countries of this part of the continent remains globally important in terms of exports, whether for the different cash crops such as cocoa or cotton, but also in terms of imports: rice, wheat palm oil are essential to meet the needs of the people. Figures published by the World Trade Organization (WTO) show that, on average, for the twelve countries in the area where statistics are available, agricultural exports account for 23.5 percent of the total for this sector. This percentage varies greatly from one country to another. For Côte d'Ivoire, 69 percent is achieved; in contrast, for Nigeria, this contributes only four percent, or again, five percent for Guinea. According to Afirmag, for some countries, a product predominates widely. This is the case in Côte d'Ivoire (more than 50 percent for cocoa and more than 70 percent if cocoa by-products are added) or Benin, Burkina Faso and Mali for cotton (over 60 percent, 40 percent, and 70percent...

Public and private sector players should have a common approach that will help expedite the implementation of regional integration, thus drive the East African Community into a large market. Rwanda’s businessman, Denis Karera, the managing director of Kigali Heights, said a hormonised strategy is important, especially as the Africa prepares for the recently-endorsed continental free trade area. The deal to establish the Africa Continental Free Trade Area, of over 1.2 billion people, was signed on March 21 during the 10th African Union extraordinary summit in Kigali. Karera is also the current vice-chairman of EABC. Karera is was speaking during the inaugural East Africa Business Council (EABC) Excellence Awards 2018 in Nairobi, Kenya last week. The former EABC chairman, and another Rwanda businessman, Faustin Mbundu, the chairman MFK Group, were awarded for their exemplary leadership while leading the regional private sector umbrella body. Karera said the awards were a “great milestone toward building a united East African business community”. Other winners Local social enterprise that offers water solutions, Water Access Rwanda, scooped the Best East African Company award in SME category. Equity Group Holdings emerged overall winners, scooping the Chairman’s Award during a dinner held at the Kenyatta International Convention Centre, followed by Mabati Rolling Mills and Chandaria Industries based in Kenya. KCB Group was recognised as the Best East African Company in financial services, Bidco Africa won the manufacturing category, followed by Chandaria Industries and Mabati Rolling Mills, respectively. The awards recognise companies that have demonstrated exceptional business performance in...

State leaders from 44 African countries have agreed a deal to create a Continental Free Trade Area, set to become one of the largest in the world. The agreement was signed during a summit in the Rwandan capital, Kigali, although 10 countries refused to sign the deal, which will need to be ratified by all the signatories’ national parliaments before it can be put into effect. CFTA deal signed by African nations The African Continental Free Trade Area (CFTA) will remove a number of barriers to trade between African nations, including tariffs and import quotas, while allowing the free flow of goods and services between member countries – similar to the way the European Union operates now. The aim is to boost commerce, growth and employment in member states and make intra-African trade more profitable. Africa’s largest economy, Nigeria, is among the countries refusing to sign the deal and convincing the West African nation to get on board remains one of the biggest obstacles in the way of implementing the agreement. Nigerian president Muhammadu Buhari pulled out of last week’s summit after certain trade unions and businesses complained about not being consulted over the agreement. The African Union says it hopes the remaining countries will be persuaded to sign at a later date. Source: The East Africa Monitor

More than 40 countries signed the protocol to the treaty establishing the African Continental Free Trade Area (AfCFTA) in Kigali. The AfCFTA faces hurdles, but the eminent African tasked with reforming the African Union, Donald Kaberuka, remains optimistic. He spoke to Berna Namata. Before the AfCFTA, there were advanced talks on a tripartite area to bring together the EAC, SADC and Comesa, which could have covered about half of Africa. This trade deal is an acceleration of that process. Second, what we have learnt in this region is that it is possible to increase trade once you bring down tariffs as we have done in East Africa, because the level of trade within the region has almost reached the Association of Southeast Asian Nations levels -- just under 30 per cent. This is very significant. We now know that tariffs were not the most difficult thing to overcome: It is non-tariff restrictions. I hope and expect that as we launch the AfCFTA, we will bring these lessons to bare. There are gains to opening up, but we need to work hard on logistics, non-tariff restrictions and freedom of movement of people. There are several issues that need to be settled to make the AfCFTA agreement effective, but they require stronger political commitment. How much of a concern is this? I wouldn't say political will as such; it is how you address the fears of those who think that when you come together, it is a zero-sum game. There will of...

Kenya’s exports to Tanzania plunged to a nine-year low as the country’s share of the regional market in 2017 shrunk significantly. Latest data from the Central Bank of Kenya (CBK) shows that exports to the rest of the East African Community (EAC) member states were not any better, pointing to Kenya’s dwindling fortune in the region despite a protocol allowing free movement of goods in the five EAC member states. It is a worrying trend that certainly casts doubt on the future of EAC whose member countries ratified the Common Market Protocol in 2010 to ease the free-flow of goods among the five states. Exports to Tanzania in 2017 declined from a high of Sh46 billion in 2012 to Sh28.5 billion, even as exports to Uganda and Rwanda flattened. Imports from Tanzania to Kenya have also gone down, declining from Sh19 billion to Sh13 billion in 2017. Exports to Uganda- for long Kenya’s main export destination- have also under-performed, declining from an all-time high of Sh76 billion in 2011 to Sh61.8 billion in 2017. Kenya’s exports to Uganda rose steadily from a low of Sh27.8 billion in 2006 touching an all-time high of Sh76 billion in 2011 before they flattened to an average of Sh63.3 billion. POLICY OF INDUSTRIALISATION There was a pronounced bump in Nairobi’s exports to Kampala a year after the signing of the common market protocol. The value of goods exported to Uganda increased by 46 per cent from Sh52.1 billion to Sh76 billion, as optimism of...

KIGALI, Mar. 22 (Xinhua) -- Africa expects to have a win-win situation with its partners through the African Continental Free Trade Area (AfCFTA), Chairman of the African Union (AU) and Rwandan President Paul Kagame said on Wednesday. The AfCFTA will broaden the existing partnership between Africa and its partners, said Kagame at a press conference after the 10th Extraordinary Session of the Assembly of the AU on the AfCFTA. With the continental free trade area, both Africa and its partners will have a much bigger market and benefit all, said the president. "Until now, the African external partners, China and others, have good relations with Africa," said President of Niger Mahamadou Issoufou. African and the external partners will be able to work together on the AfCTFA, said Issoufou, adding that Africa will be in a position to share the growth brought by the AfCFTA with external partners, in particular with China. Forty-four African countries on Wednesday signed an agreement to establish the AfCFTA during the one-day extraordinary session. The agreement will be submitted for ratification by state parties in accordance with their domestic laws. The decision to form the AfCFTA was adopted in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the AU while AfCFTA negotiations were launched by the AU in 2015. The AfCFTA is aimed at creating a single continental market for goods and services with free movement of businesses and investments. This, according to the AU, will pave...

“LET’S get together,” sang the choir to the rhythm of Bob Marley, as a succession of African leaders signed an ambitious, continent-wide free-trade agreement in Kigali on March 21st. Although all 55 members of the African Union (AU) had been involved in negotiations around the grandly named Continental Free Trade Area (CFTA), not all were ready to sign as one. On the day, 44 put pen to paper. Among the holdouts was Nigeria, Africa’s largest economy. Paul Kagame, Rwanda’s president and the host of the AU summit, had no time for sceptics. “Some horses decided to drink the water. Others have excuses and they end up dying of thirst.” The logic of the deal is sound. Trade in Africa is still shaped by relationships and infrastructure dating back to the colonial era. Countries mostly sell primary commodities to other continents. Only 18% of their exports are traded within Africa, where they often face high tariffs. The CFTA is meant to change that by creating a “single continental market for goods and services”. UNCTAD, a UN agency, reckons that eliminating import taxes between African countries would increase regional trade by a third and lift African GDP by 1% over time. Currently, nearly half of this trade is in manufactured goods. Services would also be opened up. But not everyone is convinced. Muhammadu Buhari, Nigeria’s president, cancelled his flight to Kigali amid domestic pressure. An official says Nigeria was given just a few days to read the text, which he worries will...