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The East African : Jun 7th 2015
The EastAfrican 38 BUSINESS JUNE 6-12,2015 Bilate≥al, issue-specific deals good app≥oach in ≥eviving global t≥ade and greater competitiveness. Europe needs jobs, growth and greater competitiveness. The US too, needs much the same. Better trading terms are key to securing these goals for businesses and consumers. The World Trade Organisa- S tion plays a key role in the adjudication of multilateral trade agreements and their implementation and enforcement, but it has not been as dynamic in recent years — with the failure so far of the Doha Round — in the negotiation of major multilateral deals. It secured the Bali trade facilitation deal recently with helpful Customs progress, but even that was a somewhat tortuous process. Bilateral, pluri-lateral and issue-specific deals are, therefore, filling the negotiations void left by the WTO. They are aimed at driving progress and helping to prevent any nascent protectionism. The EU and US have both concluded deals with Korea. And the EU with Canada and with Singapore and, on goods for example, with the East African Community. The EU has embarked on a major bilateral programme with the US Transatlantic Trade and Investment Partnership (TTIP) — a potentially landmark agreement, going beyond tariffs into the depth of regulatory coherence and convergence, Japan, some ASEAN and Latin American nations, and potentially India. It has also started an investment agreement dialogue with China, and is now looking to overhaul its free trade deal with Mexico. The US has done likewise, including its flagship TransPacific Partnership (TPP) with 12 nations including Japan. The Chinese too are looking at regional East Asian partnerships, and have signed a trade deal with Switzerland. They also have an active infrastructure investment approach in Africa. Other dialogues include the 50+ nation Trade in Services Agreement (TiSA) dialogue, and those on information technology and on procurement. This is a complex web of com- plex agreements. The WTO may play a role as repository, and as interpreter and adviser of how all this fits together. The trading system needs too to come to grips with effectively enshrining the principle of free and open trans-border data flows, underpinned by balanced data protection regimes. But where is South Africa in this torrent of trade dialogues? It seems to be taking a cautious approach, particularly to bilateral dialogue. It has not joined The Hanjin Africa at the port of Hamburg on August 27, 2014. More and better trading terms are key to job creation and greater competition among regions. Picture: File COMMENTARY MICHAEL RAKE “Trade deals help to drive progress and prevent any nascent protectionism.” the TiSA dialogue in Geneva, and seems to put less emphasis on pursuing free trade agreements than some major emerging economy nations. The current difficulty in achieving progress via the Doha Round may mean that South Africa needs to devote more resources to trade outreach, as do other BRICS and MINT (Mexico, Indonesia, Nigeria and Turkey) nations. South Africa has intellectual capital and resources potential, some of which is being realised via innovative business models (including business process outsourcing) and some of which needs further support or market reform. Stronger trade flows and FDI would add economic stability, help address employment and skills needs, and support stronger energy security. EU-South Africa trade growth has been good since the 1999 Trade Development & Cooperation Agreement (TADC) — which gave significant bothway open access — at over 120 per cent growth in goods trade and with FDI increasing over five-fold. But more could be done, especially in the services market access and reform and via a more ambitious trade agenda, beyond the good progress on a plurilateral Southern Africa Development Community (SADC). There is good scope to grow. For instance, the UK is a large bilateral trading partner for South Africa at around £10 billion ($15.31 billion) per annum, but there are dialogues to extend this further. The UK also accounts for a very significant proportion of all South African FDI. Look at the EU. I think an ambitious TTIP — and other EU free trade deals such as with Japan and India and the USdriven TPP — has the potential to give jobs and growth a real boost. More mutually beneficial trade measures will help stop the rise of extremist parties in democracies playing on fears of immigration and so-called benefits shopping. The headline numbers are compelling. An observer tells us that one OECD study on TTIP estimates potential welfare gains to the EU and the US of as much as 3 per cent to 3.5 per cent of GDP; others range from 0.5 per cent to 3.5 per cent of annual GDP. Another very optimistic report even sees gains BENEFITS OF TRADE DEALS They are aimed at driving progress and helping to prevent any nascent protectionism. Stronger trade flows and FDI would add economic stability, help address employment and skills needs, and support stronger energy security. They have the potential to create jobs and growth a real boost. More mutually beneficial trade measures will help stop the rise of extremist parties in democracies playing on fears of immigration and so-called benefits shopping. as high as 13 per cent of GDP for the US and 5 per cent for the EU. In this broad context, there is an important summit on June 10, where representatives from 27 member countries of Africa’s three regional trade blocs — the Common Market for Eastern and Southern Africa (Comesa), the East African Community and SADC — will meet in Egypt to sign the longawaited Tripartite Free Trade Area agreement. Once endorsed, it would be the largest economic bloc on the continent, and could be transformative in terms of ramping up intra-Africa trade and, thereby, the continent’s share of global trade. This may also give Africa more clout during trade negotiations with the US, China and the EU. The net benefits for South Africa — through trade outreach within Africa, within the BRICS structure and through a stronger reinvigoration of trade dialogues with the US and EU — would potentially be of immense value. They could also offer a multiplier effect, given the nature of intra-firm trading flows and the chain of valueadded services and SME support services. The US-South African agree- ment on April 21, to try to strengthen bilateral trade and investment ties, may be an additional step forward on the process to deeper and faster trade engagement. The EU and others may wish to follow suit quickly. Sir Michael Rake is chair- man, BT Group and co-chair of the World Economic Forum on Africa for 2015. Digital decoders on sale at an electronics shop in Nairobi. Pic: File outh Africa and the other BRICS (Brazil, Russia, India and China) nations need jobs, growth Digital platfo≥m ≥enews ≥ival≥y By KENNEDY SENELWA Special Correspondent THE MIGRATION of television to the digital platform in Kenya has brought new players into the market, forcing traditional players to re-stratege their business models in order to cope with increasing competition. Competitive pricing of set-top boxes (STBs) and quality content are emerging as key components for growth in the television sector. The International Data Cor- poration (IDC) East Africa, an intelligence market provider, says locally-produced content will be a new battleground for content providers. “But players charging premi- ums will have to provide compelling reasons to justify the fee since the majority of TV viewers in Kenya have been enjoying free-to-air television,” said IDC’s regional analyst Leonard Kore. The key sector players are DStv, Pan-Africa Network Group, Bamba TV, KBC (Signet), Zuku and the Africa Digital Network Consortium. While South African firm Multichoice’s GOtv charges a monthly fee of less than $10, Radio Africa’s Bamba TV charges a Ksh3,299 ($34) one-off fee to obtain the set-top box, with no monthly subscription. DStv on the other hand has slashed the cost of its high-definition decoder by almost half to Ksh2,500 ($26). Safaricom has introduced a mobile broadband-connected STB that enables users to access 3G/4G broadband services and TV content. Zuku too, offers broadband and TV content services. Mr Kore said the recent entry of Safaricom into the pay television market signals a growing convergence between the telecommunications and media industries, and dual- or triple-play services have been deployed in a number of countries in Africa. Emerging players like Safari- com and Jamii Telecom are seeking partnerships with existing premium content providers or international partnerships with global content providers such as Netflix and Comcast.
May 31st 2015
Jun 14th 2015