Analysis

Africa boasts of at least eight RECs (or potential and existing FTAs) recognised by the AU, one emerging TFTA, and, a budding AfCFTA.  All these efforts are meant to lead to the realisation of the AEC

The present report entitled “Special Economic Zones: Emerging Frontiers for Industrial Growth” covers the period of January – March 2019. The Report is divided into sections that provide important updates on the current steps being taken by the Federal Ministry of Industry, Trade & Investment (FMITI) and the Federal Government of Nigeria (FGN) in thematic areas that include: trade and trade policy, SMEs, investment, industry, the African Continental Free Trade Area Agreement (AfCFTA) and general news update.

The last two decades has seen Intellectual Property, (IP), increasingly regulated by bilateral and regional free trade agreements, (FTAs), rather than through multilateral forums like the WTO. This trend is evidenced in trade between China and African countries, which is dominated by bilateral trade agreements.

Because Ethiopia is the headquarters of the African Union its role on regional integration is usually taken as given. It is usually assumed that the state has and is making efforts to integrate with the continent. In this essay, I contend that Ethiopia’s historical engagement with regional integration has been at best passive and vague. On the contrary, its focus on regional integration at the moment seems different and active.

This week, the WTO members of the East African Community, EAC, are undergoing a Trade Policy Review, (TPR), in Geneva. Of the six EAC members, only South Sudan is not a member of the WTO. South Sudan made a request to accede to the WTO in 2017 and this week, there is a meeting of the Working Party on South Sudan’s Accession to the WTO.

It is clear that over the past decade, there is perhaps no other African country that has made such large concessions to the United States as Morocco has. By first adjusting its intellectual property laws, and now allowing the importation of American poultry despite concerns for its domestic market, Morocco's has affirmed its loyalty to its trade partner. By contrast, countries such as South Africa, which refused the U.S.'s intellectual property law requirements and implemented anti-dumping tariffs against American poultry, are moving in the opposite direction of liberalized free trade with the United States particularly with regard to poultry.

The adoption of imprecise and relaxed SDT provisions that can easily provide leeway for countries to evade SDT obligations will only work contrary to the stated objective of the Agreement to promote and attain sustainable and inclusive socio-economic development among State Parties. Just as Amartya Sen correctly puts it, “the central issue of contention is not globalization itself, nor is it the use of the market as an institution, but the inequity in the overall balance of institutional arrangements—which produces very unequal sharing of the benefits of globalization”

The AfCFTA will continue to face a number of risks that threaten to impede continental integration in favour of fragmentation. Of interest to this post are bilateral trade agreements between African countries, individually or in smaller groups, on the one hand, and non-African countries or regions, on the other.

African countries should consider alternatives to the arm’s length principle. A viable alternative to the arm’s length principle: the unitary taxation (formulary apportionment) approach should be considered. This approach looks in detail at the economic activities resulting into the profits of MNCs for tax purposes. Under this approach, tax authorities in Africa will justifiably impose corporate income taxes on “actual” profits of MNCs accruing form economic activities carried out in their jurisdictions, thereby eliminating the opportunities for base erosion and profit shifting in Africa.

Since TRIPS is extremely flexible on the PBRs regime to be adopted, they should obtain guidance from other balanced international instruments such as ITPGRFA. Further, they can obtain vital lessons from states such as India.