A Quarterly Global Trade Policy Circulation & Review with Dr. Eugene Nweke
In the following sequence, in this last quarter review, our matters arising shall focus more on three recent global trade policy reports, with a visit to the proposed African Trade Liberalization Agreements as canvassed at African Union – AU.
In total, four issues were brought to the front burner:
1). Discussions on the Official Development Assistance (ODA) Framework – A Case Study of the SSC.
The present discussion centers on the fact that, the world is moving towards a multiplex – having no hegemonistic role for any nation, but would simultaneously preserve culturally and political diversity.
It gave credence to the following emphasis:
a). The importance of sectoral interventions in a mission mode approach as opposed to project mode approach.
b). Argues against efforts to develop a uniform structure of methodological and accounting approaches to captures its nuisances.
c). The call for moving beyond the idea of government-to-government approach to a more democratic process of “people-centric cooperation”.
d). It also observed the important role ‘think tank’ plays in strengthening institutions.
The ongoing discussion is a wakeup call for Nigeria – Our domesticated Development Assistance Framework, no matter how structured, must be seen to tilts towards people and private engagements, the concept of embracing policy flexibility should reign over rigidity.
Policy thrusts of the government must revolve around accountability, transparency, with do-ability pointers (performance indicators). In the same manner legislative instruments should lessen heightened bureaucracies, but to tilts towards achieving general participations, enhancement and collective well-being of the sectors; transparency, accountability, fairness, competitive and predictability objectives should be paramount in legislative process.
Deregulatory and Regulatory quests and concerns should apply in sectors not on even application but on peculiar applications, this is aimed at promoting a competitive sectors opposed to sectoral monopoly/oligopoly.
For instance, government policy on the manufacturing sector, should revolve around national discourse for an export driven manufacturing sector, in this regards, the existing policy on Free Trade Zones -FTZ may have to be revisited with the aim of lessening administrative cum operational bureaucracies, opening and making it more robust in terms of competitiveness, investment advantages and operationally beneficial.
2). UNCTAD II High Level Experts Meeting on the International Investment Agreements:
At the recent concluded World Investment Forum (WIF), held on the 24th October, 2018 in Geneva, the United Nations Conference on Trade And Development (UNCTAD) observed its Second High Level Conference-Meeting on International Investments Agreements.
The High Level Conference Meeting was centered on the need to revisit the objective of International Investment Agreements (IIAs), to enable and advance sustainable development by guaranteeing effective regulatory space where states do not have to buy backs the right to regulation in Investors-States Disputes Settlements (ISDS).
Recall that, in a recent concluded research submitted to the trade conference, it noted that; the real concept or essence of Foreign Direct Investment (FDI) was misrepresented and often abused in developing countries, especially in Africa, due to compromised administrative discipline on the part of government.
As laudable as the following combination of the World Trade Organisation – WTO trade development measures and treaties appears to be, the objectives is mostly defeated right from its implementation stages, due to developed countries undefined interests.
International trade measures and treaties such as: Most Favored Nation Treatments (MFNT), Trade Liberalization Schemes (TLS), Trade Related Investment Measures (TRIMS), Bilateral Investment Treaties (BIT), Multilateral Investment Treaties (MIT), Trade Facilitation Agreements (TFA) etc. never recorded true success stories in many developing countries in Africa, Nigeria inclusive.
In Africa, Nigeria inclusive, government officials engage in the activities of “insider trading” during bidding process. Government itself thus overwhelmed with the seemingly attractive biding values and accruable royalties, then opts for blown field development model for foreign investment proposal for a short term investment window as opposed to green field development model with long terms Investment window.
In Many Africa Countries, Nigeria inclusive, reports available show that most of the so called foreign investors are resisting regulations, manipulating capital repatriation components and documentary procedures, African countries serves as a haven for tax evasion via the concept of Transnational Corporations – TNC.
In so many African countries, the essence of transparency, predictability, competitiveness and ease of doing business is too far from the realities, in relation with the contractual obligations of the investors and the objectives of the contractual engagements at the first instance.
Arbitrariness, high cost of services deliveries, epileptic services (system breakdown) practice of immediate recoupment from investments, poor infrastructures, confusions, extortion, exploitations, etc. is the order of the day, thus resists every attempt to “sanction”.
3). Global Tax Reform Agenda
It is in this direction, that the Global Tax Reform Agenda is presently canvassed to stemming commercial illicit financial flows and boosting the developing countries innovations in this regards, hence:
a). The commercial activities of the multinational enterprises are quantitatively the most important challenge faced by the developing countries in achieving the sustainable development goals.
Here again, as current efforts for stemming these illicit flows and reforming the international tax system are ongoing, however, the canvass is being led by the developed countries, with the developing countries interests poorly represented in the reform.
b). On a strong footing, the representatives of the developing countries are seriously canvassing tax issues of great priorities on how the International Tax Corporations can contribute to prevent such illicit flows.
Whether the African governments are involved in these negotiations and reform process or not, is a discussion for some other time.
4). On the African Continental Free Trade Area – AFCTA
Discussions on this assuming African Trade Liberalization started way back in 2012 by the African Heads of State, under the auspices of African Union.
The trade treaty proposes for a single continental market for goods and services expand intra- African trade through better harmonization and coordination of trade liberalization and facilitations within member nations, among other proposed aims and objectives.
The draft agreement was presented for counter signing by the African Heads of State in Kigali – Rwanda during the 18th African Union extraordinary session on the 21st day of March, 2018.
Out of the 55 States, more than 44 African Head of States had signed this agreement, but about 11 others declined.
The cheering news is that, in the wisdom of His Excellency, President Mohammed Buhari, he declined signing the agreement on the grounds that, he would like to weigh the business implications and will requires the Nigerian stakeholders’ inputs on the agreement, before signing.
Consultation is ongoing in this regards, even though the Freight Forwarding sub sector appears being left out of this consultations.
From the Freight Forwarders’ perspectives, our experiences with the implementations of the ECOWAS Trade Liberalization Schemes (ETLS)/ Common External Tariff (CET), leaves much to be desired.
From investigation, over 60% of the member states are rather targeting the Nigeria markets, with an attitude and business understanding that, “Nigeria is a market place where everything goes”.
Surprisingly, most of the members States are trade export prepared and ready (exports tools improve upon) pursuance to this agreement.
I hope the Governing Council of the CRFFN shall promptly advice His Excellency, Mr. President Federal Republic meaningfully on this matter.
On this note, I want to thank you all for following our quarterly Global Trade Policy – Matters Arising Platform actively.
I do also hope that, answers to the questions posited by most of you as a follow up to the second and third quarter review issues, meet your expectations.
See you all in 2019, Happy Christmas in advance and a prosperous new year ahead.
Stay Blessed.
Fwdr. Dr. Eugene Nweke
For: Sea Empowerment & Research Centre.
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