SA – New Bills discouraging trade and investment

containeryardSouth Africa is moving away from a policy promoting trade and investment to one that contradicts this, a roundtable on SA-European Union (EU) trade relations heard on Tuesday.

This comes as global foreign direct investment (FDI) flows jumped 36% last year to their highest level since the global economic and financial crisis began in late 2008, but plummeted in emerging markets, especially SA.

The most recent United Nations (UN) Conference on Trade and Development global investment trends monitor shows FDI into SA fell 74% to $1.5bn last year, while FDI inflows to Africa fell 31% to about $38bn.

Central Africa and Southern Africa saw the largest declines in FDI. The end of the commodity “supercycle” and the plunge in oil prices affected new project developments drastically, the UN body said. This had also affected Brazil, Russia and China, but not India, whose economy had surged ahead of late.

Peter Draper, MD of Tutwa Consulting, which researches policy and regulatory matters in emerging markets, said the promulgation of legislation such as the private security bill and the expropriation bill, created an impression that SA was not an attractive investment destination.

“What lies behind all of that, I think, is an ideological agenda, which is not favourable to business,” he said. “Geopolitically there is no love between SA and the US and SA and the EU. (But) There is lots of love for the Brics (Brazil, Russia, India, China, SA).”

South African and international business have raised the alarm over the quiet signing into law of SA’s Promotion and Protection of Investment Bill late last year, after the government had acknowledged that it would do little to promote trade.

Meanwhile, the Department of Trade and Industry said last week that the African National Congress had directed its economic transformation subcommittee to review the trade agreements signed by SA since 1999.

It said SA’s goal in “negotiating” trade agreements was to support national development objectives, promote intra-African trade and the integration of SA into global markets. This is likely to be highly controversial after the government from 2013 unilaterally cancelled about 13 bilateral investment treaties with major EU countries, drawing warnings from the bloc that this could damage trade relations.

Investors fear the Protection of Investment Bill has diluted recourse to international arbitration over trade disputes, and enhances the possibility of expropriation. Critics also say it contradicts SA’s obligations under the Southern African Development Community’s finance and investment protocol, by undermining equitable treatment between foreign and domestic investors.

John Purchase, CE of agribusiness association Agbiz, which with Tutwa Consulting organised yesterday’s roundtable, said the bill had not answered “all those questions around the bilateral investment treaties”. Source: Business Day

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U.S. and Kenya sign Customs Mutual Assistance Agreement

kenya-usa-flagThe U.S. signed a Customs Mutual Assistance Agreement (CMAA) with Kenya marking a significant milestone in collaboration on security and trade facilitation between the two countries. U.S. Customs and Border Protection (CBP) Deputy Commissioner (Acting) Kevin McAleenan signed the agreement on behalf of CBP and U.S. Immigration and Customs Enforcement (ICE) and Minister of the Treasury Henry Rotich signed the agreement on behalf of Kenya.

“Customs Mutual Assistance Agreements are valuable tools in the enforcement of our laws as they facilitate information sharing between international partners,” said Deputy Commissioner (Acting) Kevin McAleenan. “This agreement will expand our efforts to combat illicit cross-border activities and will enable us to continue our work to prevent, detect and investigate customs offenses.”

“Today’s signing represents the United States and Republic of Kenya’s joint commitment to elevate cooperation to safeguard our borders through the exchange of information and mutual assistance to combat customs law violations,” said ICE Principal Deputy Assistant Director Thomas S. Winkowski. “U.S. Immigration and Customs Enforcement, together with our partners at CBP, looks forward to future cooperative enforcement efforts with the Kenya Revenue Authority.”

The U.S. has now signed 71 CMAAs with other customs administrations across the world. CMAAs are bilateral agreements between countries and enforced by their respective customs administrations. They provide the legal framework for the exchange of information and evidence to assist countries in the enforcement of customs laws, including duty evasion, trafficking, proliferation, money laundering, and terrorism-related activities. CMAAs also serve as foundational documents for subsequent information sharing arrangements, including mutual recognition arrangements on authorized economic operator programs.

The U.S. – Kenya CMAA was signed at CBP headquarters as part of the U.S. – Africa Leadership Summit in Washington, D.C. The Summit included meetings between President Obama and 51 African heads of state. Source: GSN Magazine

South African Air Cargo Security Systems receive International thumbs up!

Cargo Screening [www.aircargonews.net]

Cargo Screening [www.aircargonews.net]

Both the European Union (EU) as well as the United States’ Transport Security Administration (TSA) have approved South African air cargo security systems.

Poppy Khoza , The South African Civil Aviation Authority (SACAA) director, says, “The two affirmations place South Africa in a unique position, making the country the only one on the continent with such recognition and agreements in place.”

“This essentially means that, following audits by the European Union and the United States, South Africa is acknowledged as one of the countries where the level of aviation security is regarded as robust and reliable. This will benefit air carriers operating between South Africa and the two regions.”

In the case of the US, the TSA carries out yearly assessments of South Africa’s aviation security regime with the last audit conducted in June 2014.

The results of the audit indicate that South Africa did not attract any findings or observation and in some instances, the standards were found to be higher than in previous years.

“The TSA audit comes after almost a year since the SACAA and the TSA concluded a recognition agreement on air cargo security programmes, thus acknowledging that South African systems are on par with the stringent requirements of the USA.”

“This agreement also enhances air cargo security measures and initiatives between the two countries. Most significantly, the agreement enables quicker facilitation of goods between the two countries, and helps eradicate duplicative or redundant measures while still ensuring the highest levels of security that both the TSA and the SACAA require.”

The EU recognition means that South Africa has been included in the list of third countries where air carriers are exempted from the application of the ACC3 (Air cargo and mail carrier operation into the EU from a third country airport) regime of which the requirements are viewed as stringent to operators from countries outside the EU.

In terms of the ACC3 process, carriers wishing to carry cargo into the EU have to request an ACC3 status, and this process requires rigorous screening of air cargo or the existence of a properly functioning and secure air cargo system.

As from July this year, cargo operators flying to the EU destinations must therefore either hold a valid EU validation report, proving that they have adequate security measures in place, or in the absence of such assurance, cargo operators will have to use the services of EU validators to pronounce their cargo as secured.

“The services of EU validators are not free and come at a cost to air carriers, but it does acknowledge that security measures applied in South Africa and the EU are equivalent.”

“This recognition by the EU is a significant milestone for the country and South African carriers, as this means that they can now benefit from an exemption from the ACC3 regime, provided that the level of risk remains similarly low, commensurate with a robust oversight system being in place.”

Source: SAnews.gov.za

US loses multi-billion dollar court cases against China and India

India, China, US [Picture: www.wespeaknews.com]

India, China, US [Picture: http://www.wespeaknews.com]

The World Trade Organization agreed on Monday this week to side with claims against the United States made by both China and India concerning US-imposed tariffs on products exported to America.

In both instances, the WTO ruled against the US and decided in favor of the major BRICs countries, who for two years now have each asked the organization to intervene and weigh in on America’s use of tariffs to tax certain imports dating back to 2007.

With regards to both cases, the WTO’s judges ruled that the US acted “inconsistent with its agreement on subsidies and countervailing duties,” or taxes imposed on goods sold by “public bodies.”

In China, the panel agreed, US officials improperly levied those taxes against state-owned enterprises that the WTO does not consider to be “public bodies.” Instead, the WTO said, those entities were majority-owned by the Chinese government, but did not perform “government function” or exercise “government authority,” according to the Financial Times. With respect to India, the WTO again agreed that the US was wrong to similarly treat state-owned National Mineral Development Corporation as a public body, according to the International Business Times.

At issue were billions of dollars’ worth of Chinese steel products, solar panels, aluminum, paper and other goods shipped to the US after being taxed as originating from public bodies. The panel’s decision, Reuters reported, “reflected a widespread concern in the 160-member WTO over what many see as illegal U.S. protection of its own producers.”

“China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises,” China’s commerce ministry said in a statement.

Mike Froman, the US trade representative, responded by saying Washington was “carefully evaluating its options, and will take all appropriate steps to ensure that US remedies against unfair subsidies remain strong and effective”.

Nevertheless, Froman added that the WTO’s ruling in the Indian case constituted at least a partial victory for the US.

“The panel’s findings rejecting most of India’s numerous challenges to our laws and determinations is a significant victory for the United States and for the (US) workers and businesses making these steep products,” he told Reuters. Source: Russia Today.

Australia to buy US drones for border patrol

Triton drone surveillance fleet to be based at Edinburgh air force base in Adelaide (ABC News)

Triton drone surveillance fleet to be based at Edinburgh air force base in Adelaide (ABC News)

Australia today announced it will buy unmanned surveillance drones from the US to protect its borders and commercial interests.

The fleet, to be based in Adelaide, would provide the defence force “with unprecedented maritime surveillance capabilities”, PM Tony Abbott said. The drones would also be used to protect energy resources, he added. The drones, which are still being tested by the US navy, can remain airborne for up to 33 hours. The number of drones to be purchased is yet to be determined.

“We do need to have a strong defence – national security is as important as economic security when it comes to the good government of our country,” Abbott said. “Given that Australia has responsibility for something like 11% of the world’s oceans, it’s very important that we’ve got a very effective maritime surveillance capability.” The MQ-4C Triton drones, which are unmanned aerial vehicles used for surveillance, can cruise at altitudes up to 55,000 feet. The vehicle’s size is comparable to a small aircraft with a wingspan of 40 metres (131 feet).

In Australia, the drones are to be stationed at Adelaide’s air force base. Abbott said the purchase plan would boost South Australia’s economy with about A$100m ($90m, £54m) in investments. The announcement comes as Australia steps up its maritime border patrols to deter asylum seekers arriving by boat from neighboring Indonesia. Source: The Nation