1. CLIMATE AND NERGY Global Trade Trends: Implications for South African Exporters Catherine Grant MAKOKERA, Senior Associate at Tutwa Consulting 28 OCTOBER 2015 | Durban, South Africa KZN Export Week

2. CLIMATE AND NERGY -Multilateral trade rules – ongoing relevance of WTO -Global trends in regional trade integration -Indian Ocean linkages -Africa’s Diversified Partnerships: -Looking East - China -BRICS -Middle East as bridge between Africa and Asia -Trading amongst ourselves Outline

3. CLIMATE AND NERGY Rules of the multilateral trading system still matter Number of countries joining WTO increasing Dispute settlement mechanism strong Unlikely to be a new round of negotiations in near future But important developments likely without a round WTO Ministerial Conference in December 2015 in Kenya Possibility that Trade Facilitation Agreement will enter into force – now over 50 ratifications (including Botswana and Mauritius) – potential to increase global exports by $1 trillion per annum (2.7%) Possible package for least developed countries and maybe some progress on agriculture issues World Trade Organisation

4. CLIMATE AND NERGY Tripartite Free Trade Area Continental Free Trade Area Trans-Pacific Partnership Trans-Atlantic Trade and Investment Partnership Regional Comprehensive Economic Partnership Regional Trade Integration: Africa and Beyond

5. CLIMATE AND NERGY Tripartite Free Trade Area Continental Free Trade Area Trans-Pacific Partnership Trans-Atlantic Trade and Investment Partnership Regional Comprehensive Economic Partnership Regional Trade Integration: Africa and Beyond

6. CLIMATE AND NERGY Africa: Limited coverage - goods focused Developmental regionalism Infrastructure Industrial policy Best endeavour/cooperation approach Missed deadlines Implementation challenges TPP-TTIP-RCEP: Ambitious Broad agenda beyond goods Legally binding – harmonisation Supportive of global value chains Time bound negotiations Implications for multilateral system (mega regionals) Trends in Regional Trade Integration

7. CLIMATE AND NERGY Major shipping route Half the world’s container ships – One-third of bulk cargo Two-thirds of all oil shipments Geo-politically strategic Blue economy development Fisheries and Aquaculture Renewable Ocean Energy Seaport and Shipping Seabed Exploration and Minerals Indian Ocean Linkages

8. CLIMATE AND NERGY Australia Bangladesh Comoros India Indonesia Seychelles Iran Kenya Madagascar Malaysia Mauritius Mozambique Oman Singapore South Africa Sri Lanka Tanzania Thailand United Arab Emirates Yemen Indian Ocean Rim Association

9. CLIMATE AND NERGY Traditional partners remain important especially for a more diversified basket of exports – Europe, US and Japan (very much the same for Middle Eastern countries) China is undoubtedly the single most important country right now Reinforcing reliance on commodities? Impact of slow-down? Concerns about investments in Africa? After the financial crisis there was a deliberate “Look East” that continues Africa’s Diversified Partnerships: Look East

10. CLIMATE AND NERGY Trade between BRICS is a series of bilateral interactions – complicated by customs unions Free trade area unlikely in the short term New Development Bank established Initial focus on infrastructure Opportunities for increasing exports in value added products Agro-processing “Factory India” Services Africa’s Diversified Partnerships: BRICS

11. CLIMATE AND NERGY Trade with Middle East remains low but increasing potential E.g. 20% increase in shipping of fresh produce in last year from Southern Africa to ME Beyond goods trade - other linkages important Technology transfer e.g. energy Investment e.g. agriculture Trade in services e.g. airlines Financial and corporate ties e.g. hub for multinational corporations Africa’s Diversified Partnerships: Middle East

12. CLIMATE AND NERGY Low levels of intra-African trade – 12% Development priorities include Integration Industrialisation Infrastructure Entering a potentially new era where it will become increasingly easier to move goods, capital, people around continent Africa’s Diversified Partnerships: Trading Amongst Ourselves

13. CLIMATE AND NERGY Need increased interaction on global trends between government and exporters Have we adapted our understanding of markets since financial crisis? Share information on capacities, industry structures, partnerships, innovations Support organised business structures including export councils and industry associations Use incentives and services provided by government Implications for South African Exporters