CLIMATE AND NERGY Global Trade Trends: Implications for South African Exporters Catherine Grant MAKOKERA, Senior Associate at Tutwa Consulting 28 OCTOBER.

CLIMATE AND NERGY

Global Trade Trends: Implications for South African Exporters

Catherine Grant MAKOKERA, Senior Associate at Tutwa Consulting

28 OCTOBER 2015 | Durban, South Africa

KZN Export Week

CLIMATE AND NERGY

- Multilateral trade rules – ongoing relevance of WTO

- Global trends in regional trade integration

- Indian Ocean linkages

- Africa’s Diversified Partnerships:- Looking East - China- BRICS- Middle East as bridge between Africa and Asia- Trading amongst ourselves

Outline

CLIMATE AND NERGY

• Rules of the multilateral trading system still matter• Number of countries joining WTO increasing• Dispute settlement mechanism strong

• Unlikely to be a new round of negotiations in near future

• But important developments likely without a round

• WTO Ministerial Conference in December 2015 in Kenya• Possibility that Trade Facilitation Agreement will enter into force – now over 50

ratifications (including Botswana and Mauritius) – potential to increase global exports by $1 trillion per annum (2.7%)

• Possible package for least developed countries and maybe some progress on agriculture issues

World Trade Organisation

CLIMATE AND NERGY

Tripartite Free Trade Area

Continental Free Trade Area

Trans-Pacific Partnership

Trans-Atlantic Trade and Investment

Partnership

Regional Comprehensive Economic

Partnership

Regional Trade Integration: Africa and Beyond

CLIMATE AND NERGY

Tripartite Free Trade Area

Continental Free Trade Area

Trans-Pacific Partnership

Trans-Atlantic Trade and Investment

Partnership

Regional Comprehensive Economic

Partnership

Regional Trade Integration: Africa and Beyond

CLIMATE AND NERGYTrends in Regional Trade Integration

CLIMATE AND NERGY

• Major shipping route• Half the world’s container ships – One-third of bulk cargo• Two-thirds of all oil shipments

• Geo-politically strategic

• Blue economy development• Fisheries and Aquaculture• Renewable Ocean Energy• Seaport and Shipping• Seabed Exploration and Minerals

Indian Ocean Linkages

CLIMATE AND NERGYIndian Ocean Rim Association

CLIMATE AND NERGY

• Traditional partners remain important especially for a more diversified basket of exports – Europe, US and Japan (very much the same for Middle Eastern countries)

• China is undoubtedly the single most important country right now• Reinforcing reliance on commodities?• Impact of slow-down?• Concerns about investments in Africa?

• After the financial crisis there was a deliberate “Look East” that continues

Africa’s Diversified Partnerships: Look East

CLIMATE AND NERGY

• Trade between BRICS is a series of bilateral interactions – complicated by customs unions

• Free trade area unlikely in the short term

• New Development Bank established• Initial focus on infrastructure

• Opportunities for increasing exports in value added products• Agro-processing• “Factory India”• Services

Africa’s Diversified Partnerships: BRICS

CLIMATE AND NERGY

• Trade with Middle East remains low but increasing potential• E.g. 20% increase in shipping of fresh produce in last year from Southern

Africa to ME

• Beyond goods trade - other linkages important• Technology transfer e.g. energy• Investment e.g. agriculture• Trade in services e.g. airlines• Financial and corporate ties e.g. hub for multinational corporations

Africa’s Diversified Partnerships: Middle East

CLIMATE AND NERGY

• Low levels of intra-African trade – 12%

• Development priorities include • Integration• Industrialisation• Infrastructure

• Entering a potentially new era where it will become increasingly easier to move goods, capital, people around continent

Africa’s Diversified Partnerships: Trading Amongst Ourselves

CLIMATE AND NERGY

• Need increased interaction on global trends between government and exporters

• Have we adapted our understanding of markets since financial crisis?• Share information on capacities, industry structures, partnerships,

innovations• Support organised business structures including export councils and industry

associations• Use incentives and services provided by government

Implications for South African Exporters