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Coronavirus: We must keep trade with Africa flowing

Erastus Mwencha
By Erastus Mwencha

Chairman of TradeMark East Africa,, former Secretary-General of the Common Market for Eastern and Southern Africa, and former Deputy Chairperson of the African Union.

Tom Pengelly
By Tom Pengelly

Director of the Secretariat for the UK All Party Parliamentary Group for Trade Out of Poverty

Posted on Wednesday, 22 April 2020 10:19

The spread of the coronavirus disease (COVID-19) in Cape Town
Container ships wait to load and offload goods in port during a 21-day nationwide lockdown aimed at limiting the spread of coronavirus disease (COVID-19) in Cape Town, South Africa, April 17, 2020. REUTERS/Mike Hutchings

COVID-19 has now spread to all corners of Africa and, as the rate of infections increase, the continent’s economies are coming to a crashing halt, risking the reversal of two decades of economic progress.

Trade has been the heartbeat of Africa’s economic success, with the UK alone importing £12.7bn in goods and services from Africa in 2016, much of which from the agriculture sector.

But this vital economic activity, and the millions of livelihoods it sustains, is under threat.

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Trade volumes in the East African Community are down by up to 25% since the beginning of 2020, with even worse damage in the informal sector. There are warnings of a food security disaster on the continent.

The threat is not only from COVID-19 itself.

As the Overseas Development Institute’s Dirk Willem te Velde explains: “Some in the UK – and other large economies around the world – are arguing for autarky or increasingly protectionist policies that would wreak havoc on trade with Africa, often disguised as well-meaning social and environmental objectives, or attempts to protect domestic businesses and jobs. These protectionist voices must be resisted.”

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Policy makers must understand the full consequences if stringent new production standards are imposed on imports, as some in the UK are calling for.

Exports from much of Africa would be effectively locked-out from the UK and their other major markets around the world, leading to countless jobs being lost on the Continent where unemployment rates are already as high as 70%.

At the same time, British consumers would be denied goods such as Kenyan tea and green beans, or Ghanaian cocoa and fruit. There are no winners in this situation.

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When G20 Trade and Investment Ministers met virtually recently, at the instigation of UK Trade Secretary Liz Truss, they agreed to do everything possible to keep trade flowing across the world and ensure that any necessary emergency measures taken to tackle COVID-19 do not create unnecessary barriers to trade or disruption to global supply chains.

As encouraging as this sounds, unless these pledges are actually fortified into the global trading system, it is too easy for governments to pledge one thing publicly, only for the policy to be ignored in favour of more protectionist measures driven by domestic public pressures.

Using its new independent voice at the WTO, the UK should lead a call to action focused on three areas.

  1. First, the UK must continue to lead by example and hold all other members of the G20 to their promise not to erect unnecessary trade barriers. The WTO is one forum to do this, as the multilateral trading system already has well-established rules and surveillance systems. African countries can be supported to raise their concerns and analyse potential impacts of trade barriers.
  2. Second, the UK should leverage its world-class aid infrastructure and long-standing partnerships with African countries to rapidly put in place schemes to ensure African supply chains are safe and kept open. A key asset here is TradeMark East Africa (TMEA), established by the UK a decade ago and now a leading player on trade and development in Africa. TMEA has announced the launch of a US$20 million Safe Trade Emergency Facility, providing short to medium-term measures in support of continued trade. This will help contain COVID-19, whilst still enabling trade to flow. The UK and other aid agencies must now channel more funding urgently to this type of initiative, so that they can be quickly scaled-up across the continent.
  3. Finally, the UK should intensify its dialogue with Africa to plan for returning to a prosperous, more resilient, future. This can be done by establishing a UK-Africa Prosperity Commission to chart out the future direction for a new economic partnership covering safe trade, green investment and technology, and aid for trade. Bringing together UK Government Ministers with African Governments and the African Union, as well as those at the forefront of existing initiatives working to boost economic activity on the Continent, the Commission would examine how the UK and Africa can ‘build-back-better’ after the COVID-19 pandemic.

Around the world, one billion people have been lifted out of extreme poverty since 1990, as a direct result of international trade.

The global trading system that has helped deliver this was already under threat, but since the outbreak of the COVID-19 pandemic, the importance of safe, free and fair global trade has never been greater.

We must act now to keep trade with Africa flowing. Lives depend upon it.

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