Market Analysis Tools for Trade Flow Analysis Market Analysis Tools for Trade Flow Analysis and Modeling Trade Negotiation Outcomesand Modeling Trade Negotiation Outcomes

Presented Presented ByBy

Dr. Lovemore RugubeDr. Lovemore Rugube

Presented at IDEP’ s Training Facility, Dakar Presented at IDEP’ s Training Facility, Dakar Senegal, 26 to 30 April, 2010Senegal, 26 to 30 April, 2010

The challenges facing agricultural export The challenges facing agricultural export development in Africadevelopment in Africa

External constraints are mainly market access while the External constraints are mainly market access while the internal constraints can be categorized as supply-side internal constraints can be categorized as supply-side constraints. constraints.

Market access has in particular contributed to Market access has in particular contributed to concentration of African exports into specific markets concentration of African exports into specific markets (EU and USA) and concentration of exports into a few (EU and USA) and concentration of exports into a few products. products.

High tariffs, tariff peaks and tariff escalations: High tariffs, tariff peaks and tariff escalations: discouraged value addition. discouraged value addition.

Supply side constraints are perhaps the most important Supply side constraints are perhaps the most important constraints to export diversification.constraints to export diversification.

The challenges facing agricultural export The challenges facing agricultural export development in Africadevelopment in Africa

These constraints have led to inability of many African These constraints have led to inability of many African countries to take full advantage of preferential market countries to take full advantage of preferential market access provisions, EBA, EU-ACP, AGOA. access provisions, EBA, EU-ACP, AGOA. Preferential market access provisions need to be Preferential market access provisions need to be accompanied with supply-side enhancing capacity to enable accompanied with supply-side enhancing capacity to enable trade expansion and diversification of Africa countries’ trade expansion and diversification of Africa countries’ exports.exports.

The supply-side constraints:The supply-side constraints: Inadequate infrastructure, both physical and soft.Inadequate infrastructure, both physical and soft. Freight charges far more restrictive barriers to African Freight charges far more restrictive barriers to African exports than tariffs. For example freight cost as a percentage exports than tariffs. For example freight cost as a percentage of total import value in 2001 was 13% and 8.8% for Africa of total import value in 2001 was 13% and 8.8% for Africa and developing countries respectively.and developing countries respectively.

The challenges facing agricultural export The challenges facing agricultural export development in Africa development in Africa

Lack of coherent and supplementary policies. Such as the Lack of coherent and supplementary policies. Such as the failure of governments to develop the energy sector.failure of governments to develop the energy sector.

Poor trade facilitation particularly inefficient customs Poor trade facilitation particularly inefficient customs services increase costs on exporters reducing services increase costs on exporters reducing competitiveness competitiveness

Inability to conform to standards and other requirements in Inability to conform to standards and other requirements in the international markets the international markets

Weak and inadequate institutions Weak and inadequate institutions

Lack of appropriate institutional frameworks and systems Lack of appropriate institutional frameworks and systems for managing trade policy for managing trade policy

The challenges facing agricultural export The challenges facing agricultural export development in Africa development in Africa

Weak private-public dialogueWeak private-public dialogue

Lack of information Lack of information

Lack of credit institutions Lack of credit institutions

Production structures. smallholder face challenges related to Production structures. smallholder face challenges related to economies of scale investments and lack access to credit economies of scale investments and lack access to credit facilities facilities

Drought or other adverse climatic conditionsDrought or other adverse climatic conditions

Patterns of Agricultural Protection/DistortionsPatterns of Agricultural Protection/Distortions

More than two-thirds of the Africa’s poor depend directly More than two-thirds of the Africa’s poor depend directly or indirectly on agriculture for their livelihoodor indirectly on agriculture for their livelihood

Government policies, in the past at least, have depressed Government policies, in the past at least, have depressed farm incomes in Developing Countries -D Csfarm incomes in Developing Countries -D Cs– Anti-agric policies in D Cs themselvesAnti-agric policies in D Cs themselves– Pro-agric policies in H I Cs, which lower int’l food Pro-agric policies in H I Cs, which lower int’l food

prices and thereby some farm-gate prices in D Csprices and thereby some farm-gate prices in D Cs

The policy instruments chosen are not the most efficient The policy instruments chosen are not the most efficient for achieving governments’ stated objectives, in either for achieving governments’ stated objectives, in either

D Cs or H I Cs D Cs or H I Cs

What are the patterns of government What are the patterns of government distortions to agricultural trade?distortions to agricultural trade?

H I Cs protect agric relative to manufacturing, D Cs tend to H I Cs protect agric relative to manufacturing, D Cs tend to do the oppositedo the opposite

Degree of agric protection is correlated with degree of agric Degree of agric protection is correlated with degree of agric comparative disadvantagecomparative disadvantage

Countries tend to move towards protecting agric (and Countries tend to move towards protecting agric (and textiles and clothing) as they grow and industrializetextiles and clothing) as they grow and industrialize

Types of instruments that distort tradeTypes of instruments that distort trade

Market access: Market access: These include import tariffs and quotas that These include import tariffs and quotas that protect local producers from competing imports. Protection protect local producers from competing imports. Protection induces local production to be higher than would be the case induces local production to be higher than would be the case at market prices, at the expense of international producers at market prices, at the expense of international producers and exporters.and exporters.Export subsidies: Export subsidies: These include government payments that These include government payments that cover some of the costs of exporters such as marketing cover some of the costs of exporters such as marketing expenses, special domestic transport charges, and payments expenses, special domestic transport charges, and payments to domestic exporters to make sourcing products from to domestic exporters to make sourcing products from domestic producers competitive.domestic producers competitive.Domestic support: Domestic support: These include direct support to farmers These include direct support to farmers linked to the type, price, and volume of production. linked to the type, price, and volume of production. Depending on the level of support, local production is Depending on the level of support, local production is usually higher and competing imports lower than in the usually higher and competing imports lower than in the absence of subsidies.absence of subsidies.

Traditional exports for selected African countries

Country Commodity share of

agricultural exports

Benin Cotton 94%Cameroon Cocoa 25%

Coffee 26%Cote d'Ivoire Cocoa 56%Ghana Cocoa 92%Malawi Tobacco 75%Mali Cotton 57%Nigeria Cocoa 51%Tanzania Coffee 30%

Cotton 29%Cashews 21%

Uganda Coffee 77%

High-value commodity marketsHigh-value commodity markets

-50

0

50

100

150

200

1990 1992 1994 1996 1998 2000 2002 2004

Ag

r. E

xpo

rt In

dex Meat & dairy

products

Sugar

Coffee, cocoa,tea

Cotton

Fruit &vegetables

Export Strategies for SSA CountriesExport Strategies for SSA Countries

Rational: Rational:

• High dependency on very few commodities High dependency on very few commodities

• (traditional tropical export commodities)(traditional tropical export commodities)

• Risk due to price volatility for these commoditiesRisk due to price volatility for these commodities• Long term downward trend in the prices of these Long term downward trend in the prices of these

commoditiescommodities• High-value commodities: higher income elasticity of High-value commodities: higher income elasticity of

demanddemand• High-value commodities: lower price variabilityHigh-value commodities: lower price variability

Agricultural ExportsAgricultural Exports

Coffee/tea/cocoa/spices: 30 percent of Africa’s ag exportsCoffee/tea/cocoa/spices: 30 percent of Africa’s ag exports– strongly dominated by five major players--Cote d’Ivoire, Ghana, strongly dominated by five major players--Cote d’Ivoire, Ghana,

Kenya, Cameroon, and Madagascar Kenya, Cameroon, and Madagascar – SSA relatively minor global player (10 percent of the global SSA relatively minor global player (10 percent of the global

market)market)– Share fluctuates (and declined) due to global price volatilityShare fluctuates (and declined) due to global price volatility– Share of fruits and vegetables increased from 4 percent in 1990 to Share of fruits and vegetables increased from 4 percent in 1990 to

more than 16 percent in 2004.more than 16 percent in 2004.– Dominated by South Africa (60 percent), Kenya (12 percent) and Dominated by South Africa (60 percent), Kenya (12 percent) and

Cote d’Ivoire (9 percent)Cote d’Ivoire (9 percent)

Fish and shellfish and other seafood increased from 2 percent to 11 Fish and shellfish and other seafood increased from 2 percent to 11 percentpercent– Main players South Africa (20 percent), Namibia (17 percent), Main players South Africa (20 percent), Namibia (17 percent),

Senegal (15 percent), and Seychelles (11 percent) Senegal (15 percent), and Seychelles (11 percent)

Intra SSA importIntra SSA import

Not much (18 percent)Not much (18 percent)

Intra-African food and agricultural imports are less Intra-African food and agricultural imports are less importantimportant

More for landlocked economiesMore for landlocked economies

Country World % EU25 members % Sub Saharan Africa

Zambia 153,858 5.94 85.21Zimbabwe 453,269 9.50 70.26Malawi 66,320 12.52 61.92Burundi 17,529 34.77 51.35Burkina Faso 158,337 24.20 43.13Togo 105,557 32.50 35.64Madagascar 168,328 19.41 22.29Mauritius 551,026 22.72 20.82Kenya 571,829 18.02 19.60Uganda 310,155 8.56 16.21Tanzania 421,268 10.06 14.78Cameroon 480,662 50.68 13.06Senegal 860,835 36.79 11.47Ghana 900,090 23.67 10.90Seychelles 143,971 69.15 10.51South Africa 2,975,069 18.81 10.13Gabon 240,101 59.76 9.58Cape Verde 137,656 70.32 4.00Sub Saharan Africa 8,715,860 24.57 18.21

SSA Composition of Agricultural Imports by Partner 2004

Intra-regional tradeIntra-regional trade

o Relatively little (17 Relatively little (17 percent) intra African percent) intra African food and agfood and ag ExportsExports

o Landlocked African Landlocked African countries tend to countries tend to undertake more intra-undertake more intra-regional traderegional trade

 CountriesShare of Agricultural Exports going to SSA

Share of Merchandise exports going to SSA

Rwanda 92.23 84.27

Burkina Faso 88.53 86.38

Niger 81.82 34.57

Nigeria 75.92 8.35

Zambia 60.21 44.86

Namibia 58.51 61.43

Togo 39.4 52.33

Tanzania 28.86 22.76

Uganda 26.34 30.08

Malawi 24.85 28.66Average: Sub-Saharan Africa 17.35 15.96

Top 10 Intra-regional Trade Partners

Shares of Intra-Regional Trade for selected African exporters, 2003

Intra-regional tradeIntra-regional trade

 CountriesShare of Agricultural Exports going to SSA

Share of Merchandise exports going to SSA

Cote d'Ivoire 7.98 23.33

Cameroon 7.72 13.04

Gabon 6.42 23.15

Mauritius 6.29 9.86

Ghana 4.01 9.77

Madagascar 3.37 10.57

Gambia, The 2.64 10.28

Sao Tome and Principe 1.15 2.87

Seychelles 0.68 0.76

Sudan 0.31 0.51Average: Sub-Saharan Africa 17.35 15.96

Source: UNCTAD TRAINS database accessed through WITS.

Shares of Intra-Regional Trade for selected African exporters, 2003

Bottom 10 Intra-regional Trade Partners

How have African agri-food export products How have African agri-food export products performed?performed?

Revealed Comparative Advantage (RCA) IndexRevealed Comparative Advantage (RCA) IndexRCARCAijij = market share of country i ‘s export of good = market share of country i ‘s export of good

j/market share of country i ‘s total exportj/market share of country i ‘s total export

Country i has revealed comparative advantage in good j if Country i has revealed comparative advantage in good j if RCARCAij ij > 1 > 1

This is more an indicator of export performance than a This is more an indicator of export performance than a predictive number predictive number

Top 15 performers in terms of RCATop 15 performers in terms of RCA

Product Name RCA 1990 RCA 2004

Change between 1990-94

and 2000-04

SSA Export in 2004

246 Wood chips/waste 0.02 17.25 684.91 269,101

231 Natural rubber/latex/etc 1.86 2.17 452.62 60,677

223 Oil seeds-not soft oil 0.99 2.66 373.83 17,509

248 Wood simply worked 1.09 2.36 321.38 538,049

072 Cocoa 20.47 32.38 307.19 1,383,774

122 Tobacco, manufactured 0.29 1.75 283.88 195,460

037 Fish/shellfish,prep/pres 0.54 5.30 265.65 357,788

034 Fish,live/frsh/chld/froz 0.55 3.88 219.04 726,075

263 Cotton 7.74 17.77 210.28 1,047,933

112 Alcoholic beverages 0.18 1.78 145.56 642,806

036 Crustaceans molluscs etc 1.72 4.04 78.51 390,880

054 Vegetables,frsh/chld/frz 0.99 1.82 66.42 349,029

057 Fruit/nuts, fresh/dried 0.82 5.84 60.94 1,442,622

247 Wood in rough/squared 6.11 5.31 53.44 275,772

292 Crude veg materials nes 1.60 3.16 47.95 480,416 Source: UNCTAD TRAINS database accessed through WITS. Authors’ calculations

Bottom 10 performers in terms of RCABottom 10 performers in terms of RCA

Product Name RCA 1990 RCA 2004

Change between 1990-94

and 2000-04

SSA Export in 2004

046 Flour/meal wheat/meslin 0.80 2.60 6.19 45,975

058 Fruit presvd/fruit preps 2.78 4.77 -15.90 267,318

091 Margarine/shortening 1.16 2.45 -31.91 40,957

075 Spices 22.74 11.07 -32.93 194,962

074 Tea and mate 34.85 24.82 -40.60 611,887

061 Sugar/mollasses/honey 17.21 8.56 -41.21 774,155

071 Coffee/coffee substitute 25.31 5.73 -41.23 411,376

044 Maize except sweet corn. 3.99 2.50 -52.83 179,770

121 Tobacco, raw and wastes 40.28 18.58 -53.70 837,050

265 Veg text fibre ex cot/ju 15.84 3.73 -72.78 24,340 Source: UNCTAD TRAINS database accessed through WITS. Authors’ calculations

RCARCAo Competitive performances of Africa’s major export Competitive performances of Africa’s major export

commodities like tea, coffee, sugar, and tobacco has commodities like tea, coffee, sugar, and tobacco has decreased significantly between 1990 and 2004decreased significantly between 1990 and 2004

o However, RCA improvement for cocoa, cotton and wood However, RCA improvement for cocoa, cotton and wood chipschips

o Plus, non-traditional high-value exports such as fresh Plus, non-traditional high-value exports such as fresh fruits and vegetables and fish and shell fish products fruits and vegetables and fish and shell fish products performed well performed well an indication of an increased degree of an indication of an increased degree of diversification of Africa’s food and agricultural exports? diversification of Africa’s food and agricultural exports?

Protection is Still High and Mostly at the BorderProtection is Still High and Mostly at the Border(rate of protection, percent )(rate of protection, percent )

0

40

80

120

160

US OECD OECD developing EU Japan QUADManufacturing

Border Protection Domestic Support

OECD Protection is still HighOECD Protection is still High(percent)(percent)

0

20

40

60

80

1965 -74 1979 -81 1986 -88 1995-97 2000 -02

Border Protection is non-TransparentBorder Protection is non-Transparent(Tariff lines that are not Ad-Valorem,(Tariff lines that are not Ad-Valorem,

percent of total tariff lines)percent of total tariff lines)

0

10

20

30

40

QUAD Large MiddleIncome

Other MiddleIncome

Lower Income

Agriculture Manufacture

Tariffs Escalate in Final ProductsTariffs Escalate in Final Products

0

5

10

15

20

25

30

35

40

45

50

tarif

fs (

%)

QUAD Canada Japan US EU Large MiddleIncome

Other MiddleIncome

Lower Income

Average MFN Applied Out-of-quota Duties (%)

RawIntermediateFinal

Examples of Tariff EscalationExamples of Tariff Escalation

EU US Japan Tropical Products Coffee raw 7.3 0.1 6.0 final 12.1 10.1 18.8 Cocoa raw 0.5 0.0 0.0 intermediate 9.7 0.2 7.0 final 30.6 15.3 21.7 Expanding Commodities Fruits raw 9.2 4.6 8.7 intermediate 13.3 5.5 13.2 final 22.5 1 0.2 16.7 Vegetables raw 9.9 4.4 5.0 intermediate 18.5 4.4 10.6 final 18.0 6.5 11.6 Seafood raw

Downward trend in applied tariffsDownward trend in applied tariffs (simple average, %)(simple average, %)

0

5

10

15

20

25

30

35

40

Low-income Middle-income

High-income

1988-90 1995-97 2001-03

0

5

10

15

20

25

30

35

40

Low-income Middle-income

High-income

1988-90 1995-97 2001-03

Effects of full global lib’n on SSA agricEffects of full global lib’n on SSA agric

% change% change

in:in:

Real value of Real value of agric and food agric and food

exports exports

Real net Real net farm farm

incomeincome

South AfricaSouth Africa 5656 1010Other Southern AfricaOther Southern Africa 5050 99Rest of Sub-Saharan Rest of Sub-Saharan AfricaAfrica

4545 55

All S S AfricaAll S S Africa 5050 77

Key elements of the Doha AgendaKey elements of the Doha Agenda

3 agricultural pillars (including cotton)3 agricultural pillars (including cotton)

Non-agricultural market accessNon-agricultural market accessServicesServices

Lesser tariff and subsidy cuts for developing countries Lesser tariff and subsidy cuts for developing countries (DCs) and zero cuts for least-developed countries (LDCs)(DCs) and zero cuts for least-developed countries (LDCs)

What’s on the table? Market access What’s on the table? Market access Elimination or sharp reduction of use of the Special Elimination or sharp reduction of use of the Special Safeguard (SSG-- currently permits many developed Safeguard (SSG-- currently permits many developed countries to impose duties above their Uruguay Round countries to impose duties above their Uruguay Round bindings)bindings)

New Special Safeguard Mechanism (SSM) with both price New Special Safeguard Mechanism (SSM) with both price and quantity triggers for developing countries. and quantity triggers for developing countries. – Import duties of up to 25 percentage points could be Import duties of up to 25 percentage points could be

imposed when imports exceeded 110 percent of a three imposed when imports exceeded 110 percent of a three year moving averageyear moving average

– A price-based measure could be invoked if the price of A price-based measure could be invoked if the price of imports falls below 85 percent of a three-year moving imports falls below 85 percent of a three-year moving average of import prices, with a duty up to 85 percent of average of import prices, with a duty up to 85 percent of the gap between current import prices and the three year the gap between current import prices and the three year moving average.moving average.

What’s on the table? Export SubsidiesWhat’s on the table? Export SubsidiesDraft agreement involves abolition of all export subsidies. Draft agreement involves abolition of all export subsidies.

Very little impact in the short run—because current export Very little impact in the short run—because current export subsidy levels are negligiblesubsidy levels are negligible

Rules out a return to the disruptive situation of the 1980s, Rules out a return to the disruptive situation of the 1980s, when world prices were severely depressed by high levels when world prices were severely depressed by high levels of export subsidies that displaced efficient producers.of export subsidies that displaced efficient producers.

Will reduce the uncertainty faced by producers in Will reduce the uncertainty faced by producers in developing countries, and should help promote needed developing countries, and should help promote needed investment.investment.

What’s on the table? Domestic SupportWhat’s on the table? Domestic SupportTraditional Aggregate Measure of Support (AMS) to be Traditional Aggregate Measure of Support (AMS) to be reduced using a tiered formula:reduced using a tiered formula:– 70 percent cuts in the EU; 60 percent in members with 70 percent cuts in the EU; 60 percent in members with

intermediate amounts of support (including the USA); and 45 intermediate amounts of support (including the USA); and 45 percent in other members. percent in other members.

Additional constraint applied on Overall Trade Distorting Additional constraint applied on Overall Trade Distorting Support (OTDS)-- the total of AMS, Support (OTDS)-- the total of AMS, de Minimis, de Minimis, and Blue and Blue Box support. Box support. – cut by between 75 and 85 percent in the EU; 66 to 73 percent in cut by between 75 and 85 percent in the EU; 66 to 73 percent in

the USA and 50 to 60 percent in smaller industrial economies. the USA and 50 to 60 percent in smaller industrial economies.

Blue box support limited to 2.5 percent (5 percent) of the Blue box support limited to 2.5 percent (5 percent) of the value of production for developed (developing) members. value of production for developed (developing) members. Product-specific limits introduced on AMS and on the blue Product-specific limits introduced on AMS and on the blue box, with the cap on support to cotton being lowered very box, with the cap on support to cotton being lowered very sharply and under an accelerated timetable.sharply and under an accelerated timetable.

Implications for Sub-Saharan AfricaImplications for Sub-Saharan AfricaDoha would give SSA only a small fraction of their Doha would give SSA only a small fraction of their potential gains from a move to global free tradepotential gains from a move to global free trade

If DCs (including LDCs) were to fully participate, their gain If DCs (including LDCs) were to fully participate, their gain more than doubles more than doubles

To gain more, SSA DCs have to reduce bound tariffs To gain more, SSA DCs have to reduce bound tariffs further, so that applied tariffs fall morefurther, so that applied tariffs fall more– Isn’t it better to do that under Doha, so as to get Isn’t it better to do that under Doha, so as to get

reciprocity and/or more aid, rather than unilaterally reciprocity and/or more aid, rather than unilaterally – especially as that would lead to less trade diversion – especially as that would lead to less trade diversion when EPAs are signed with the EU?when EPAs are signed with the EU?

Why Exclude Certain Products from Tariff Reduction Why Exclude Certain Products from Tariff Reduction NegotiationsNegotiations

Significance of local productionSignificance of local production

Food SecurityFood Security

Fiscal revenueFiscal revenue

Protection of infant industryProtection of infant industry

Balance of paymentsBalance of payments

Health reasonsHealth reasons

A List of offers by Product for Market Access A List of offers by Product for Market Access NegotiationsNegotiations

Agricultural trade in RTAs (N-N)Agricultural trade in RTAs (N-N)

Agricultural trade within developed countries,Agricultural trade within developed countries,-- exports account for some 80%, imports 70% of total exports account for some 80%, imports 70% of total

developed countries agricultural tradedeveloped countries agricultural trade

70 % EU agricultural exports, 60% of imports are within 70 % EU agricultural exports, 60% of imports are within EU. EU.

Agricultural trade among the EU countries represents Agricultural trade among the EU countries represents 30 % of total world agricultural trade. 30 % of total world agricultural trade.

Agricultural trade in S-S RTAs?Agricultural trade in S-S RTAs?-- SSA – 9%SSA – 9%

1. Intra regional agricultural and food exports and imports- low1. Intra regional agricultural and food exports and imports- low2. Intra- regional market access issues2. Intra- regional market access issues

Economic Community

Agriculture (as a % of total exports)

Agriculture (as % of total imports)

Free Trade Area

Customs Union

ECOWAS 40 24 Proposed proposed for 2007

ECCAS 38.4 22 proposed for 2007

proposed for 2011

SADC (excluding SACU)

37 16 proposed for 2007

proposed for 2010

COMESA (excluding SACU)

48 20 Partial proposed for 2008

AMU 10 16 stalled stalled SACU 19.4 15 in force in force

Agriculture is relatively protectedAgriculture is relatively protected

COMESA countries have protected their agricultural COMESA countries have protected their agricultural sectors as compared to their industrial sectors. sectors as compared to their industrial sectors.

Kenya and Uganda, (EAC), have tariffs higher than CET Kenya and Uganda, (EAC), have tariffs higher than CET level of 25% for some agricultural commodities, which level of 25% for some agricultural commodities, which are the regions sensitive products. are the regions sensitive products.

Within the framework of the ongoing EPA negotiations, Within the framework of the ongoing EPA negotiations, countries have developed ‘a sensitive list’ of their countries have developed ‘a sensitive list’ of their agricultural productsagricultural products

Why low regional agricultural tradeWhy low regional agricultural trade

Similar productsSimilar products

Limited transformation and value additionLimited transformation and value additionMost of traded agricultural commodities are in their raw Most of traded agricultural commodities are in their raw

form- while imports are in their processed form. form- while imports are in their processed form.

Underdeveloped value chain and linkagesUnderdeveloped value chain and linkages-There are limited industries inter-linkages in the region -There are limited industries inter-linkages in the region

as well as limited or poor dissemination of market as well as limited or poor dissemination of market informationinformation

Why low regional agricultural trade (cont’d)Why low regional agricultural trade (cont’d)Inadequate trade facilitationInadequate trade facilitation

-Customs documentation requirements and procedures -Customs documentation requirements and procedures continue to be a hindrance to smooth regional trade continue to be a hindrance to smooth regional trade despite the FTA status and various initiatives to facilitate despite the FTA status and various initiatives to facilitate regional trade. regional trade.

Limited demand in some commoditiesLimited demand in some commodities-The region in some cases is producing some commodities -The region in some cases is producing some commodities

whose demand in the region is (such as cut flowers). whose demand in the region is (such as cut flowers).

TBTS: TBTS: Need for harmonized food safety standards. Need for harmonized food safety standards.

Unpredictable Trade EnvironmentUnpredictable Trade Environment-Adhoc measures always taken to restrict trade, measures -Adhoc measures always taken to restrict trade, measures

are not communicated to traders in advanceare not communicated to traders in advance

Potential for intra-regional COMESA tradePotential for intra-regional COMESA tradeFor COMESA and SADC,For COMESA and SADC,-product complementarities and levels of intra-regional trade -product complementarities and levels of intra-regional trade

are loware low-Complementarily index measures similarities between the -Complementarily index measures similarities between the

export basketexport basket

-Low complementarity between products of different countries -Low complementarity between products of different countries means that products from the two countries are relatively means that products from the two countries are relatively similar and therefore there is a likely to be polarisation in similar and therefore there is a likely to be polarisation in the regional marketthe regional market

-Complementarity is high between products of relatively -Complementarity is high between products of relatively higher developed member countries and those that of less higher developed member countries and those that of less developed (Egypt)developed (Egypt)

Overlapping African Regional Agreements…Overlapping African Regional Agreements…

Too much Regional Trade AgreementsToo much Regional Trade Agreements

Logistical ConstraintsLogistical Constraints

Loss of IdentityLoss of Identity