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Richard Kamidza Regional Trade Policy Advisor Hub & Spokes Project SADC Secretariat Private Bag 0095 Gaborone Botswana [email protected]
+67 74 337 037 or +267 3951077
1. Introduction 2. Trade Development Challenges 3. Context in trade policy formulation 4. Formulating national trade policies 5. Implications of weak trade policy formulation 6. What should Members of Parliament do?
7. Conclusion
The dilemma facing developing countries including Namibia!
Falling Export Receipts Development Aid External Debt; Balance of Payment challenges
Though global trade is recognised as a powerful engine of economic growth & poverty reduction, many developing countries including Namibia: find it difficult to maximise benefits from trade; still lack a cohesive national trade policy or trade development strategy; experience high staff turnover in trade related ministries thereby making it difficult to build an experienced & knowledgeable trade policy machinery; have incomplete trade statistics & industry data which impedes the ability to make informed decisions in formulating trade policies, conducting trade negotiations & assessing trade development progress; have existing trade consultative networks to inform policy making that are over-represented by government officials at the expense of the private sector & civil society;
……… many developing countries including Namibia lack:
sound analysis of trade opportunities; strategic & targeted interventions; & inclusive stakeholder engagement & coordinated action; coordination mechanism to enhance effective trade policy formulation & trade negotiations partnership between governments, regional organisations, the private sector, civil society & development partners; the ability to harness trust & accountability while addressing trade capacity development needs; substantial resources targeting long-term solutions (human and institutional trade capacities) and short term capacity gaps (backstopping support and trade analysis);
……… many developing countries including Namibia: Have exports that are under threats from regional competitors (South Africa), the global financial crisis & the Eurozone debt crisis resulting in: ˃ balance of payment difficulties; ˃ Reduced national budgets; ˃ Retrenchment of civil service personnel including trade related ministries; ˃ For example, the Eurozone crisis has directly reduced South Africa’s manufactured exports to that region (Europe is accounts for a third of South Africa’s manufactured exports) (Business Day, 11/5/2012); ˃ According to Statistics South Africa on 10/5/2012, in March: + manufacturing factory production fell by 2,7% year on year; + output across a broad range of industries declined by 4,3%; + mining production dropped by 9,8% year on year; + Production of motor vehicles, food a& beverages, basic iron & steel, petroleum & chemical products, & furniture all fell;
Institutional challenges (Is this the case with Namibia?
) Some developing countries have significantly weak: ˃ institutional capacity, structures & systems in: ˃ + trade policy formulation; & + trade negotiations; ˃ civil service capacity to generate & implement evidence based trade policies, resulting in the adoption of ad-hoc measures as instituted by ruling political elites & other vested interest groups with strong political ties; platforms for consultations & dialogue on trade issues between government officials & Non-State-Actors sector, civil society, labour, media) (business & parliamentarians;
Stakeholder relationships
(Is this the case with Namibia?) Some developing countries have: ˃ contested trade policy formulation environment in which political agents, private sector lobbies, civil society institutions, donor agencies & researchers want to influence the process & outcome; ˃ strong organized private sector (Manufacturers Association; National Association of Chambers of Commerce; National Association of Small Scale Industrialists; Association of Exporters; banking institutions and other professional associations) that is: + capable of influencing the formulation & implementation of trade policies, trade negotiations & regional trade agenda; + vocal, often interested in defending commercial interests of its constituents by extensive lobbying of various government offices & the Presidency for extended protective periods of high tariffs;
Stakeholder relationships (Contd.) (Is this the case with
Namibia?) Some developing countries have: ˃ been experiencing increasing participation institutions (NGOs, faith-based institutions, consumer advocacy groups & labour): of civil society + In trade policy formulation & trade negotiations; + In advocating for the interest of ordinary citizens, particularly the vulnerable groups in society (women, youths & physically challenged) in both urban & rural areas; ˃ been experiencing limited presence of academic & research institutions in trade policy formulation & trade negotiations;
Why trade policy formulation?
» This is central to the overall goal of achieving sustainable social-economic development; » » This requires patience, tenacity & flexibility; This is not a finite process or event, but a continuous cycle;
Trade related Namibian Ministries involved in designing trade policy include:
Trade & Industry Fisheries & Marine Resources Finance Environment & Tourism Central Statistics Office Mines & Energy Agriculture, Water & Rural Development National Planning Commission For instance: Finance – overseas the setting & administration of taxes and duties; National Planning Commission – ensures compatibility of new trade treaties with existing national development plans; Trade & Industry – ensures coherence with regional trade agenda;
Formulating national trade policies (Contd.) … the process President / Prime Minister
Legislative Proposals
Cabinet National Focal Point on Trade Trade Policy Goals Trade Policy Proposals Other fiscal policy goals Non State Actors National Assembly National Legislation
Inter-Ministerial
Forum on Trade Tariff Technical Committee Implementation Institutions (some examples)
•
Ministry of Trade & Industry;
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Ministry of Fisheries & Marine Resources;
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Department of Customs, etc.
Formulating national trade policies (Contd.)
Coordination & Communication Strategy Information Trade Policy or Trade Negotiations Discussion Participation
Formulating national trade policies (Contd.)
However, the above requires effective: – coordination of various trade-related agencies within government; – Strengthening of private sector engagement by: • avoiding ad-hoc approach to the sector; • mainstreaming consultative network with balanced cross-sectoral representation; • encouraging the sector to build technical skills in order to provide quality advice and input; • encouraging the sector to participate in specialised trade policy training programmes; – dialogue facilitation with other stakeholders such as: – NSAs – business sector; civil society groups & labour; – MPs; &
Formulating national trade policies (Contd.)
BUT in some regional countries there is: (Which is true for
Namibia?) lack of reliable network of public-private sector trade policy practitioners that is trusted by government; no reliable trade statistics & industry data to assist in making informed decisions as well as assess trade development progress; weak institutional & structural capacity in trade policy formulation & trade negotiations at all levels; weak synergies & coalitions between & among various key constituencies, resulting in lack of collective ownership of the trade regime; no regulatory frameworks resulting in fluctuating exchange rates, high inflation rates & poor fiscal measures amid widespread corruptions; low industrial capacities & competitiveness;
BUT in some regional countries:
(Is this the case with Namibia?) developing national trade policy takes up-to 5 years; trade agreements continue to be negotiated without a guiding national trade policy strategy;
Lessons from other regional countries on national trade policy formulation & trade negotiations;
Mauritius Has a fairly resourced trade negotiation structure (a political directive); Botswana More often, government & NSAs meet under platform; Zimbabwe Has a loose, non-binding structure; South Africa: • Has National Economic Development and Labour Council (NEDLAC), a vehicle in which representatives of government, labour, business & community organisations seek common ground on socio-economic development including trade policy formulation; trade negotiations; & regional integration processes;
Trade policy & regional integration initiatives
Namibian trade policy & its linkage with regional integration initiatives; SACU Agenda: – Common Monetary Area (monetary policy); – Revenue sharing arrangement; – Share of that market; – How strategic is Namibia in SACU?
SADC Agenda – Consolidation of SADC FTA following its launch in 20008; – Focuses on: – R educing trade protection; – Spurring competitive liberalization; – Enhancing economic efficiency; – Improving investment prospects for the region; – Fostering complementarities in regional industrial policy; – Improving cross-border infrastructure development;
Trade policy & regional integration initiatives (Contd.)
the Tripartite FTA involving COMESA, EAC & SADC; – comprises 26 countries (half of AU) with a combined population of 527 million people; – is based on three Pillars: • • Industrial development Infrastructure Development • Market integration – The processes: • 1 st phase of negotiations focuses on tariff liberalization; rules of origin; customs cooperation & customs related matters; Non Trade-Barriers; Technical Barriers in Trade; etc.
• 2 nd phase of negotiations will focus on trade in services; trade related issues, trade development & competitiveness; – –
How is Namibia positioning itself to exploit this market?
Is Namibia domesticating regional development plans, programmes,
policies & decisions?;
Implications of weak trade policy formulation
Does Namibia’s trade policy generates enough revenue to support
Socio economic development challenges including transport networks?
Implications of weak trade policy formulation (Contd.)
Does Namibia’s trade policy implementation capable of supporting health & poverty alleviation?
Part of MY community or family tree
Does Namibia’s trade policy implementation supporting education or information technology expansion?
My grandmother follows national development issues & events on facebook & twitter;
Implications of weak trade policy formulation (Contd.)
USA: US$342 = R2,538 Germany: € 375 = R3712
Stakeholders must: Strategically link with: ˃ national & regional trade negotiators; ˃ national & regional trade focused institutions; ˃ development partners working on trade issues; Monitor: ˃ The design &/or implementation of your trade policy; ˃ how government officials share trade negotiated outcomes & agreed regional trade schedules & commitments with other stakeholders & citizens; ˃ how negotiators to package national interests, positions & offers during regional, bilateral and multilateral trade negotiations; Support for the setting up of national & regional institutions that develop knowledge, skills & capacities to simultaneous deal with regional, bilateral & multilateral trade negotiations; Form or build synergies, coalitions & partnerships with other stakeholders in order to ensure fair scrutiny of the process & outcomes by all stakeholders, media & citizens;
Conclusion
As MPs when interacting with government negotiators & officials on trade policy or trade negotiations, always seek answers on the following questions: • What gains are possible? What gains are likely? For whom?
• What losses are possible? What losses are likely? For whom?
• What is the cost of not engaging in trade policy formulation?
• What is the cost implications of blame shifting in trade policy design?
• How to develop collective multi-stakeholder leadership , skills & strategies that generate benefits from trade related policies?
• How to link trade related processes and outcomes with poverty alleviation & sustainable socio-economic development?