29th November

WTO DG Pascal Lamy has said that: “The rising weight of influence of emerging economies has shifted the balance of power. This clearly implies a number of transitions to which we have not yet adjusted as classic Westphalia concepts of sovereignty are being challenged by the realities of interdependence. Some may consider this a problem, it is perhaps better to think of it as an opportunity to look at the real shaping factors of trade.”

….South-South trade with a focus on Africa

“We are also seeing growing ties between Africa and China and Africa and India. Trade between China and Africa will likely hit upwards of USD 200 billion in 2012, up 25 per cent year on year. If this trend continues, reports are that Africa could surpass the EU and the US to become China’s largest trade partner in three to five years.

The importance of other developing countries to Africa is even more apparent if one excludes fuels and mining products from the calculations. The share of Africa’s non-fuels and mining products exports that went to developing countries rose from around 30 per cent in 2000 to 50 per cent in 2011. This reflects the fact that Africa’s exports to developing countries tend to be more diversified than its exports to developed countries. A similar shift in trade from developed to developing economies can be seen on the import side as well. The share of developing economies in African imports rose from around one-third (34 per cent) to more than a half (53 per cent) between 2000 and 2011.

If we dig deeper into the types of products being exported, we see an interesting picture. Recent research conducted by the International Trade Centre on ’Africa’s Trade Potential: Export Opportunities in Growth Markets’ showed that exports to traditional markets — Europe — were decreasing and exports were increasing to Asia — primarily China — but that the share of value-added goods to Europe were increasing while the majority of exports to Asia were in primary products.

The research also confirmed the increase in trading intra-regionally, with a shift to more value-added goods. Over the period 1995-2010, Sub-Saharan Africa’s exports of processed goods and semi-processed goods grew faster than exports of non-oil raw products and in terms of intra-regional exports, processed and semi-processed goods comprised the largest share of exports at 46 per cent and 41 per cent respectively. This trend towards greater intra-regional trade is one that we see happening across the globe. It is partly a reaction to the decreased demand, or foreshadowing possible loss of future demand, in traditional extra-regional markets as a result of the crisis coupled with a realisation of the untapped potential of countries in the immediate economic space. The African Union’s decision of January 2012 to focus on boosting intra-African trade and identifying 2017 as the target date for the completion of the Continental Free Trade Area are examples of how policies are beginning to reflect the economic viability of trading closer to home in addition to traditional extra-regional trading.”…..

The full speech can be found here

 

summary

WTO DG Pascal Lamy has said that: “The rising weight of influence of emerging economies has shifted the balance of power. This clearly implies a number of transitions to which we have not yet adjusted as classic Westphalia concepts of sovereignty are being challenged by the realities of interdependence. Some may consider this a problem, it is perhaps better to think of it as an opportunity to look at the real shaping factors of trade.”

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