Negotiating South-South Regional Trade Agreements: Economic Opportunities and Policy Directions for Africa

166 Pages·2017·2.57 MB·English

by  Gbadebo Odularu

Advances in African Economic,
Social and Political Development
Gbadebo Odularu
Bamidele Adekunle E ditors
Negotiating
South-South
Regional Trade
Agreements
Economic Opportunities and Policy
Directions for Africa
Advances in African Economic, Social
and Political Development
SeriesEditors
DierySeck,CREPOL-CenterforResearchonPoliticalEconomy,Dakar,Senegal
JulietU.Elu,MorehouseCollege,Atlanta,GA,USA
YawNyarko,NewYorkUniversity,NY,USA
Africa is emerging as a rapidly growing region, still facing major challenges, but
withapotentialforsignificantprogress–atransformationthatnecessitatesvigor-
ous efforts in research and policy thinking. This book series focuses on three
intricatelyrelatedkeyaspectsofmodern-dayAfrica:economic,socialandpolitical
development. Making use of recent theoretical and empirical advances, the series
aims to provide fresh answers to Africa’s development challenges. All the socio-
political dimensions of today’s Africa are incorporated as they unfold and new
policy options are presented. The series aims to provide a broad and interactive
forum of science at work for policymaking and to bring together African and
international researchers and experts. The series welcomes monographs and con-
tributed volumes for an academic and professional audience, as well as tightly
edited conference proceedings.Relevant topics include, but are not limited to,
economic policy and trade, regional integration, labor market policies, demo-
graphic development, social issues, political economy and political systems, and
environmentalandenergyissues.
Moreinformationaboutthisseriesathttp://www.springer.com/series/11885
Gbadebo Odularu • Bamidele Adekunle
Editors
Negotiating South-South
Regional Trade Agreements
Economic Opportunities and Policy
Directions for Africa
Editors
GbadeboOdularu BamideleAdekunle
CentreforResearchonPolitical UniversityofGuelph&RyersonUniversity
Economy Guelph&Toronto,Ontario
Dakar-Yoff,Senegal Canada
ISSN2198-7262 ISSN2198-7270 (electronic)
AdvancesinAfricanEconomic,SocialandPoliticalDevelopment
ISBN978-3-319-45568-6 ISBN978-3-319-45569-3 (eBook)
DOI10.1007/978-3-319-45569-3
LibraryofCongressControlNumber:2017930402
©SpringerInternationalPublishingAG2017
Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof
the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission
or information storage and retrieval, electronic adaptation, computer software, or by similar or
dissimilarmethodologynowknownorhereafterdeveloped.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt
fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse.
Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthis
book are believed to be true and accurate at the date of publication. Neither the publisher nor the
authors or the editors give a warranty, express or implied, with respect to the material contained
hereinor for anyerrors oromissionsthat may havebeenmade. Thepublisher remainsneutralwith
regardtojurisdictionalclaimsinpublishedmapsandinstitutionalaffiliations.
Printedonacid-freepaper
ThisSpringerimprintispublishedbySpringerNature
TheregisteredcompanyisSpringerInternationalPublishingAG
Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland
Acknowledgement
Abooklikethiswouldnotbepossiblewithouttheassistanceofmanypeople,which
wegratefullyacknowledge.
First,therenownedteamatSpringerInternationalPublishingAGhassparedno
effortstohelpus;theirinvaluableexperienceandskillinpublishingEconomicsand
Regional Science books were extremely indispensable. The editors acknowledge
HellenOriaroandDr.DierySeck’s contributionandinspirationintheplanningand
development of this book. Dr. Diery Seck’s guidance and encouragement were
criticalinputsinthefinalizationofthisbookproject.
Publishing a book of this nature requires some doses of love, persistence and
endurance. Itis on thisnote thatwe express ourgratitude toMorganSage forher
excellent research assistantship in looking after the details towards making the
projectmoveforward.Alsodeservingspecialcommendationarethereviewersfor
theirconstructivecommentsandclarifications.Furthermore,wethankDanGwarzo
Maitlandforhisinsightfulcommentsonearlierversionsofthisbook.
Finally,wehopethatouraudiencewillbeinspiredandempoweredbeyondtheir
comfortzonesintotheborderlessworldofunlimitedSouth–Southtradeopportunities.
We would also like to express our hearty gratitude to our families, for their
sustainedsupportduringtheperiodwehavedevotedtowritingthisbook.
ProfessorsGbadeboOdularuand
BamideleAdekunle
v
Contents
Introduction:IncreasingDynamicsandtheNewTradingEcosystem
fortheSouth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GbadeboOdularu
TheBigPicture:South–SouthRegionalTradeAgreements
withintheContextoftheMultilateralTradeSystems. . . . . . . . . . . . . . . 9
GbadeboOdularu,MariamaDeen-Swarray,andCiliakaGitau
PartI SelectedCasesonSouth–SouthRegionalTradeAgreements
TradingwithChina:HowcanAfricaBenefit?. . . . . . . . . . . . . . . . . . . . 35
BamideleAdekunleandMonikaKorzun
EnhancingAfrica–IndiaRegionalTradeAgreements:Issues
andPolicyRecommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ChrisShimbaOchiengandPhilipMusyoka
UnderstandingtheDynamicsofIndia-AfricaTrade
NegotiationGame:LessonsandPolicyDirections. . . . . . . . . . . . . . . . . . 61
OlayinkaIdowuKareem
AdvancingRegionalTradeInterestsbetweenAfricaand
SouthKorea:EmergingIssues,ConcernsandPolicyOptions. . . . . . . . . 85
GbadeboOdularuandChineduSamuelOkonkwo
Africa–BrazilRegionalTradeAgreements:LookingForward
withProactiveStrategies. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. 101
BamideleAdekunleandMariamaDeen-Swarray
vii
viii Contents
PartII RecentIssuesonSelectedIntra-AfricanRegionalTrade
Agreements(RTAs)
UnderstandingBilateralTradeFlowsandNegotiatingSouth-South
RTAs:LessonsandPolicyDirectionsfortheTripartiteFree
TradeAreaAgreement(TFTA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
MusibauAdetunjiBabatundeandGbadeboOdularu
LeveragingTradeFacilitation(TF)MeasurestoMaximize
theBenefitsofRegionalTradeAgreements(RTAs)inWestAfrica. . . . 141
GbadeboOdularuandAdenikeOdularu
Conclusion:EmergingIssues,StrategicPrioritiesforSouth–South
RTAsResearch,andEconomicPolicyDirectionsforAfrica. . . . . . . . . . 159
GbadeboOdularu
Introduction: Increasing Dynamics
and the New Trading Ecosystem
for the South
GbadeboOdularu
1 Introduction
Regional Trade Agreements (RTAs)1 represent a global economic and political
phenomenoninvolvingbothdevelopedanddevelopingcountries.Thisispartlydue
to the debate it generates, especially for the welfare gains that accrue to a devel-
opingcountrytradingpartner.Inthepastdecade,Africahasbeenhometosixofthe
ten fastest-growing economies in the world—a number that is often projected to
growfurtherintothefuture.AccordingtotheWorldBank,Africacouldbe‘onthe
brinkofaneconomictakeoff,muchlikeChinawasabout30yearsagoandIndia
about 20 years ago.’ At the close of the twenty-first century, the World Trade
Organization(WTO)theUnitedNationsCooperation forTradeandDevelopment
(UNCTAD) announced that the global Regional Trade Agreements (RTAs) have
reachedthe200mark,andnotedthattheupwardtrendwouldmostlikelycontinue.
1RTAsareusedasagenerictermforbilateralorplurilateralfreetradeagreements,customsunions
orcommonmarkets.Non-reciprocalpreferentialtradeagreementssuchasGeneralisedSystemof
Preferences(GSPs)areexcludedbydefinition.Infact,whatallRTAsintheWTOhaveincommon
isthattheyarereciprocaltradeagreementsbetweentwoormorepartners.Inrecenttimes,trade
negotiations between developed (rich) and under-developed (poor countries) have moved to
regional (between two countries) agreements; usually regarded as regional trade agreements
(RTAs).Theyincludefreetradeagreementsandcustomsunions,notifiedunderArticleXXIV:7
of the GATT 1994, and paragraph 2 (c) of the Enabling Clause, and Economic Integration
AgreementsunderArticleV:7oftheGATS.Infact,mostmodernRTAsextendbeyondtraditional
trade policy mechanisms and tariff-cutting preferential treatment to include regional rules on
investment,competition,environmentandlabour;preferentialregulatoryframeworkformutual
servicetrade;andincreasinglycomplexintra-traderegulationswhichincludeinteralia:standards,
safeguardprovisions,customsadministration,etc.
G.Odularu(*)
CentreforResearchonPoliticalEconomy(CREPOL),Dakar-Yoff,Senegal
e-mail:[email protected]
©SpringerInternationalPublishingAG2017 1
G.Odularu,B.Adekunle(eds.),NegotiatingSouth-SouthRegionalTrade
Agreements,AdvancesinAfricanEconomic,SocialandPoliticalDevelopment,
DOI10.1007/978-3-319-45569-3_1
2 G.Odularu
NearlyalloftheRTAsprojectionsavailabletodatesuggestthatalargepartofthe
expectedgrowthwouldoccurinthedevelopingworld.Theunrelentingincreasein
global RTAs and its attendant effects of trade flows, demand urgent remedial
actions and solutions from policy makers, technocrats, researchers, and other
relevantdecisionmakers.
Looking at the main trends and characteristics of African RTAs kaleidoscope,
the changing landscape of RTAs in Africa becomes increasingly relevant in the
sense that if they are well utilized, RTAs policies could provide the formidable
springboardsforAfrica’seconomictransformation.ThoughthenumbersofRTAs
have increased dramatically and the scope broadened over the past decades, the
political economy of negotiating RTAs remains that some African governments
havereluctantlysignedthem.However,fosteringmarketaccessaswellaspreserv-
ing existing reciprocal preferences continues to remain the driving forces behind
signingRTAs.Thesedevelopmentsexistinparallelwiththegloballiberalizationof
trade and commerce, thereby expanding the bouquet of RTA benefits to include
strengtheningofregionalpolicycoordination,adoptionofpro-poorpolicyreforms,
andaddressingforeignpolicyissues.
Basedonthisbackground,thisbookonnegotiatingSouth–SouthRTAsinAfrica
offersanintroductionintotheworldofmodernRTAs.Itgoesbeyondthetraditional
paradigmoftradecreationversustradediversiontoaddresstheeconomicandlegal
aspects of the regulatory policies that are contained in Africa’s RTAs today. This
book provides a succinct description of the principles, rules and procedures of
RTAs, as well as filling the yawing information gap on a political economy—
informeddiscussion of how South–South RTAs are being used as instruments for
economic transformation in Africa. Further, this book presents a roadmap for
developing a more cohesive, effective strategy for negotiating selected RTAs
with Africa in the traditional, emerging and modern sectors. The book also maps
the landscape of RTAs, summarizes the theoretical arguments as well as the
political economy of RTAs. It also proceeds to discuss the current practice in the
mainpolicyareastypicallycoveredinRTAs(fromagriculturalpolicy,manufactur-
ing policy, rules of origin, customs unions, trade remedies, product standards,
technical barriers, to behind the border issues related to investment, trade facili-
tation,competition,environment,migration,anddisputeresolution).
Thereisaclearandpressingneedforincreasedglobalnegotiationsandengage-
mentwithAfricaviatheadoptionofRTAtoolsandinstruments.Increasedglobal
trade facilitates mutually beneficial growth, simultaneously strengthening global
economy and market. There is an urgent need for other regions to accelerate and
deepenstrategiceconomicengagementswithAfrica.
Undoubtedly,RTAsareincreasinglybeingsignedbyAfricancountriesduetoits
benefitssuchasspurringdevelopment,promotingtradeopportunitiesandreducing
poverty.Whilethereisagrowingbodyofevidence-basedresearch,therestillexists
somuchforleveragingavailablelessonsandbestpracticeforAfrica’scurrentand
future regional trade policy agenda. Thus, prominent academics, business actors,
development practitioners, policy-shapers, opinion leaders, researchers and deci-
sionmakersfromAfricaandtherestoftheworld,largelyrecognizethatthebenefits
derivablefromRTAsaredistinctandhuge.ThereisaneedtolookatprovenRTA
practices,field-testedsouth–southRTAtools,andinnovativeRTAapproachesthat