International Economics dr Wioletta Nowak · 2019. 1. 8. · Waves of regionalism •The first wave of regionalism occurred in the late 1950s and 1960s. •European Coal and Steel

International Economics dr Wioletta Nowak

Lecture 4

Trade agreements and economic integration

North-South trade competition in Africa and

Latin America

Trade Agreements and Economic Integration

• Trade agreement: a special agreement upon

preferential arrangement among a group of

nations governing their trade/economic

relationship.

• Economic integration - defined as joint action

of countries to create a larger economic unit,

with special relationships among the members.

Types/Levels of Agreements

Partial Scope Agreement (PSA)

• An agreement between two or more parties in which the parties offer each other concessions on a selected number of products or sectors.

• Includes tariff reductions, rules of origin, customs procedures, and safeguards.

Economic Integration Agreement (EIA)

• refers to agreement on trade in services through which two or more parties offer preferential market access to each other.

Types/Levels of Agreements

Free Trade Area (FTA)

• Member countries eliminate trade barriers among themselves, but maintain individual trade policies on imports from non-member countries,

• often include „rules of origin” to prevent transshipment.

Customs Union (CU)

• Member countries eliminate trade barriers among themselves, and adopt a common trade policy towards non-members.

Common Market

• In addition to requirements of a customs union, no barriers to factor movements among the member countries.

Economic Union

• In addition to requirements of common market, members unify all other economic (fiscal, monetary - common currency) and socio-economic (labour, social security) policies.

The Welfare Implications of Trade/Economic Pacts

• Trade creation: the lowering or removal of tariffs within a group of nations could result in an increase in the amount of trade among members.

• Trade diversion: the lowering or removal of tariffs within a group of nations could divert trade from (more efficient) non-members to (less efficient) members.

• Increased market size - economies of scale.

• The possibility of more competition within the group.

• Knowledge spillovers, reduction in duplication in research.

• More market power.

Types of trade agreements, 2010 FTA – Free Trade Agreement; EIA – Economic Integration Agreement,

CU – Customs Union, PSA – Partial Scope Agreement

Source: World Trade Report, 2011 (www.wto.org)

Number of PTAs in force, 1950-2010, Source: World Trade Report, 2011 (www.wto.org)

Number of PTAs in force, 1950-2010, Source: World Trade Report, 2011 (www.wto.org)

Waves of regionalism

• The first wave of regionalism occurred in the late 1950s and 1960s.

• European Coal and Steel Community in 1951,

• European Economic Community (EEC) in 1957,

• European Free Trade Association (EFTA) in 1960

• Africa, the Caribbean, Central and South America – the East African Community (1967-1977, Burundi, Kenya, Rwanda, Tanzania, Uganda), the Central American Common Market (1960- mid-1980s, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica in 1962)

ASEAN (1967)

• The Association of Southeast Asian Nations

(10 members) – Indonesia, Malaysia,

Philippines, Singapore, Thailand, Brunei,

Myanmar, Cambodia, Laos, Vietnam.

Free Trade Areas in Europe

• European Economic Community (EEC) 1957

• The European Union (EU)

• The European Free Trade Association (EFTA)

• The Central European Free Trade Agreement (CEFTA), 1992

• The European Economic Area (EEA) – EU +EFTA (except Switzerland)

Waves of regionalism

• The second wave of regionalism began in the mid-1980s and extended well into the 1990s.

• The EC - Central and Eastern European countries

• the EU – a number of bilateral agreements with countries in the Middle East – (with Israel, Jordan, Lebanon and the Palestinian Authority) and North Africa (with Algeria, Egypt, Morocco and Tunisia).

The second wave of regionalism

• the Canada-US Free Trade Agreement in 1988, NAFTA (1994)

• the MERCOSUR (Southern Common Market) - Argentina, Brazil, Paraguay, Uruguay (1991) and Venezuela (2012).

• the Economic Community of West African States (ECOWAS), 1975

• the Common Market for Eastern and Southern Africa (COMESA), 1994

• The Association of Southeast Asian Nations

(ASEAN)

• ASEAN + 3 (China, Japan, South Korea)

• ASEAN-China Free Trade Agreement

(ACFTA, 01-Jan-2010)

• ASEAN-India Free Trade Agreement

(AIFTA, 01-Jan-2010)

APTA (1975)

• The Asia Pacific Trade Agreement

(previously Bangkok Agreement) –

Bangladesh, China (2001), India, Republic of

Korea, Lao, Sri Lanka, Nepal

SAFTA (2004)

• The South Asia Free Trade Agreement –

Bangladesh, Bhutan, India, Maldives, Nepal,

Pakistan, Sri Lanka

European Union – List of Notified Regional Trade Agreements in Force FTA – Free Trade Agreement; EIA – Economic Integration Agreement, CU – Customs Union

Agreement name Type Coverage Date of entry into force

EU – Albania FTA&EIA Goods&Services 01-Dec-2006 (Goods),

01-Apr-2009 (Services)

EU – Algeria FTA Goods 01-Sep-2005

EU– Andorra CU Goods 01-Jul-1991

EU – Bosnia and

Herzegovina FTA Goods 01-Jul-2008

EU – Cameroon FTA Goods 01-Oct-2009

EU – CARIFORUM FTA&EIA

Goods&Services

01-Nov-2008

EU - Central America

(Costa Rica; El Salvador;

Guatemala; Honduras;

Nicaragua; Panama)

FTA&EIA Goods&Services 01-Aug-2013

EU – Chile FTA&EIA Goods&Services 01-Feb-2003 (Goods)

01-Mar-2005 (Services)

EU - Colombia and Peru FTA&EIA Goods&Services 01-Mar-2013

European Union – List of Notified Regional Trade Agreements in Force FTA – Free Trade Agreement; EIA – Economic Integration Agreement


EU – Côte d'Ivoire FTA Goods 01-Jan-2009

EU– Egypt FTA Goods 01-Jun-2004

EU – Faroe Islands FTA Goods 01-Jan-1997

EU – Former

Yugoslav Republic of

Macedonia

FTA&EIA Goods&Services 01-Jun-2001 (Goods)

01-Apr-2004 (Services)

EU – Ghana FTA Goods 15-Dec-2016

EU – Iceland FTA Goods 01-Apr-1973

EU – Israel FTA Goods 01-Jun-2000

EU – Jordan FTA Goods 01-May-2002

EU – Korea, Republic

of FTA&EIA Goods&Services 01-Jul-2011

EU – Lebanon FTA Goods 01-Mar-2003

EU – Mexico FTA&EIA Goods&Services 01-Jul-2000 (Goods)

01-Oct-2000 (Services)

European Union – List of Notified Regional Trade Agreements in Force FTA – Free Trade Agreement; CU – Customs Union, EIA – Economic Integration

Agreement


EU – Montenegro FTA&EIA Goods&Services 01-Jan-2008 (Goods)

01-May-2010 (Services)

EU – Morocco FTA Goods 01-Mar-2000

EU – Norway FTA Goods 01-Jul-1973

EU – Overseas Countries

and Territories (OCT) FTA Goods 01-Jan-1971

EU – Palestinian Authority FTA Goods 01-Jul-1997

EU – Papua New

Guinea/Fiji FTA Goods 20-Dec-2009

EU – San Marino CU Goods 01-Apr-2002

EU – Serbia FTA&EIA Goods&Services 01-Feb-2010

(01-Sep-2013)

EU– Republic of South

Africa FTA Goods 01-Jan-2000

EU – Switzerland –

Liechtenstein FTA Goods 01-Jan-1973

European Union – List of Notified Regional Trade Agreements in Force FTA – Free Trade Agreement; CU – Customs Union, EIA – Economic Integration

Agreement


EU – Syria FTA Goods 01-Jul-1977

EU – Tunisia FTA Goods 01-Mar-1998

EU – Turkey CU Goods 01-Jan-1996

EU – Canada FTA & EIA Goods&services 21-Sep-2017

EU – Georgia FTA & EIA Goods&services 01-Sept-2014

EU - Rep. of Moldova FTA & EIA Goods&services 01-Sept-2014

EU – Ukraine FTA & EIA Goods&services 23-Apr-2014

EU – Japan Under negotiation

EU – India Under negotiation

EU – Malaysia

EU – Morocco

EU – Singapore

EU - Viet Nam

Under negotiation

EU-US Transatlantic Trade and Investment Partnership (TTIP)

China – List of Notified Regional Trade Agreements in Force PSA – Partial Scope Agreement; EIA – Economic Integration Agreement;

FTA – Free Trade Agreement


ASEAN-China PSA & EIA Goods & Services

01-Jan-2005 (Goods),

01-Jul-2007 (Services)

APTA – Accession of China PSA Goods 01-Jan-2002

Chile – China FTA Goods 01-Oct-2006

China – Hong Kong, China FTA & EIA Goods & Services 01-Jan-2004

China – Macao, China FTA & EIA Goods & Services 01-Jan-2004

China – New Zealand FTA & EIA Goods & Services 01-Oct-2008

China – Singapore FTA & EIA Goods & Services 01-Jan-2009

Pakistan – China FTA & EIA Goods & Services 01-Jul-2007 (Goods),


Peru – China FTA & EIA Goods & Services 01-Mar-2010

China – List of Notified Regional Trade Agreements in Force PSA – Partial Scope Agreement; EIA – Economic Integration Agreement;


Agreement name Type Coverage Date of entry into

force

Switzerland – China

Iceland – China

FTA &

EIA

Goods&

Services 01-Jul-2014

China-Georgia FTA &

EIA

Goods&

Services 01-Jan-2018

The Cross-Straits Economic

Cooperation Framework Agreement

(ECFA)

(The Association for Relations Across

the Taiwan Straits (China); The Straits

Exchange Foundation (the Separate

Customs Territory of Taiwan, Penghu,

Kinmen and Matsu))

Goods&

Services 12-Sep-2010

Australia – China FTA &

EIA

Goods&

Services 20-Dec-2015

China – Norway

Republic of Moldova – China under negotiation

India – List of Notified Regional Trade Agreements in Force PSA – Partial Scope Agreement; EIA – Economic Integration Agreement;



ASEAN-India

(Brunei Darussalam; Myanmar;

Cambodia; Indonesia; Lao

People's Democratic Republic;

Malaysia; Philippines; Singapore;

Viet Nam; Thailand; India)

FTA Goods 01-Jan-2010

Asia Pacific Trade Agreement

(APTA)

(Bangladesh; China (2002); India;

Korea, Republic of; Lao People's

Democratic Republic; Sri Lanka)

PSA Goods 17-Jun-1976

Chile-India PSA Goods 17-Aug-2007



Agreement name Type Coverage Date of entry into

force

Global System of Trade Preferences

among Developing Countries

(Algeria; Argentina; Bangladesh; Benin;

Brazil; Cameroon; Chile; Colombia; Cuba;

Ecuador; Egypt; Ghana; Guinea; Guyana;

India; Indonesia; Iran; Iraq; Korea,

Democratic People's Republic of; Korea,

Republic of; Libya; Malaysia; Mexico;

Morocco; Mozambique; Myanmar;

Nicaragua; Nigeria; Pakistan; Peru;

Philippines; Singapore; Sri Lanka; Sudan;

Tanzania; Thailand; The former Yugoslav

Republic of Macedonia; Trinidad and

Tobago; Tunisia; Venezuela, Bolivarian

Republic of; Viet Nam; Zimbabwe)

PSA Goods 19-Apr-1989




India-Afghanistan PSA Goods 13-May-2003

India-Bhutan FTA Goods 29-Jul-2006

India-Japan FTA&EIA Goods&

Services 01-Aug-2011

India-Malaysia FTA&EIA Goods&

Services 01-Jul-2011

India-Nepal PSA Goods 27-Oct-2009

India-Singapore FTA&EIA Goods&

Services 01-Aug-2005

India-Sri Lanka FTA Goods 15-Dec-2001

Korea-India FTA&EIA Goods&

Services 01-Jan-2010




MERCOSUR-India

(Argentina; Brazil; Paraguay;

Uruguay; India)

PSA Goods 01-Jun-2009

South Asian Free Trade

Agreement (SAFTA)

(Bangladesh; Bhutan; India;

Maldives; Nepal; Pakistan; Sri

Lanka)

FTA Goods 01-Jan-2006

South Asian Preferential Trade

Arrangement (SAPTA)

(Bangladesh; Bhutan; India;

Maldives; Nepal; Pakistan; Sri

Lanka)

PSA Goods 07-Dec-1995




Bay of Bengal Initiative on

Multi-Sectoral Technical

and Economic Cooperation

(BIMSTEC)

Under negotiation

EFTA – India Under negotiation

EU – India Under negotiation

India – SACU (The

Southern African Customs

Union)

Under negotiation

United States – List of Notified Regional Trade Agreements in Force

FTA – Free Trade Agreement, EIA – Economic Integration Agreement


Dominican Republic -

Central America - United

States Free Trade

Agreement (DR-CAFTA) (Costa Rica, Dominican

Republic, El Salvador,

Guatemala, Honduras,

Nicaragua, United States)

FTA&EIA

Goods & Services

01-Mar-2006

North American Free

Trade Agreement

(NAFTA)

(Canada, Mexico, United

States)

FTA&EIA Goods & Services 01-Jan-1994

US – Australia FTA&EIA Goods & Services 01-Jan-2005

US – Bahrain FTA&EIA Goods & Services 01-Aug-2006

US – Chile FTA&EIA Goods & Services 01-Jan-2004

United States – List of Notified Regional Trade Agreements in Force FTA – Free Trade Agreement, EIA – Economic Integration Agreement


US – Israel FTA Goods 19-Aug-1985

US – Jordan FTA&EIA Goods & Services 17-Dec-2001

US – Morocco FTA&EIA Goods & Services 01-Jan-2006

US – Oman FTA&EIA Goods & Services 01-Jan-2009

US – Peru FTA&EIA Goods & Services 01-Feb-2009

US – Singapore FTA&EIA Goods & Services 01-Jan-2004

Korea, Republic of – US FTA&EIA Goods & Services 15-Mar-2012

US – Colombia FTA&EIA Goods & Services 15-May-2012

US – Panama FTA&EIA Goods & Services 31-Oct-2012

North-South trade competition

in Africa and Latin America

• The aim – to show the scale of and trends in merchandise trade

• The North (the European Union and the United States)

• The South (China, India)

• Africa (54 countries)

• Latin America (21 countries)

• The period of analysis: 2000-2014

• The data retrieved from the UN Comtrade Database

Merchandise trade of the North and BASIC

countries with Africa, 2000-2014 (USD billion)

179 181 178 217

266

328

379

439

552

395

462

528 535 512

481

25 26 29 38 56

74 105

140

195 158

228

293 335 351 364

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

The EU & US BASIC

Merchandise trade of BASIC countries with

Africa, 2000-2014 (USD billion)

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China India South Africa Brazil

Merchandise trade of emerging economies

with Africa, 2000-2014 (USD billion)

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China India South Africa Brazil Turkey

Bilateral trade of the North and the South with 54 African

countries, 2000-2014 (USD billion)

179 181 178 217

266

328

379

439

552

395

462

528 535 512

481

16 16 19 25 38 51 78

104

149 125

176

229 269 284 296

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

North South

Merchandise trade of the North and the South with Africa,

2000-2014

• In the years 2000-2014, the value of bilateral

merchandise trade between the North and

Africa increased nearly 3 times.

• Annual growth rate – 6.8%

• The South-Africa trade increased 18.3 times


Merchandise trade of the North and the South with Africa,

2000-2014

• 2000 – the North-Africa trade was 11 times bigger than the South-Africa

• 2014 – the North-Africa trade was 1.6 times bigger than the South-Africa

• 2000-2008 – the North-Africa trade was 5.5 times bigger than the South-Africa

• 2009-2014 – the North-Africa trade was 2.1 times bigger than the South-Africa


countries, 2000-2014

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2002

2004

2006

2008

2010

2012

2014

North South

2000 North – 91.7%; South – 8.3% 2014 North – 61.9%; South – 38.1%

Bilateral trade of the North and the South with 54

African countries, 2000-2014 (USD billion)

0

50

100

150

200

250

300

350

400

450

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EU USA China India


countries, 2000-2014 (current US$ billion)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2002

2004

2006

2008

2010

2012

2014

EU US China India

The North – a 29.8 percentage point decrease

EU – a 18.8 pp decrease US – a 11.0 pp decrease

China – a 23.1 pp increase, India – a 6.8 pp increase

Year The EU The US China India The North The South

2000 8.2% 2.0% 2.2% 5.9% 4.8% 2.8%

2001 8.5% 2.0% 2.1% 5.5% 5.1% 2.6%

2002 8.1% 1.8% 2.0% 5.9% 4.8% 2.6%

2003 8.5% 2.2% 2.2% 5.2% 5.3% 2.6%

2004 8.1% 2.6% 2.5% 4.7% 5.5% 2.8%

2005 8.6% 3.2% 2.8% 4.8% 6.0% 3.1%

2006 8.4% 3.5% 3.1% 7.4% 6.1% 3.8%

2007 8.5% 3.7% 3.4% 8.4% 6.3% 4.1%

2008 9.6% 4.2% 4.2% 8.4% 7.2% 4.9%

2009 9.1% 3.3% 4.1% 7.8% 6.6% 4.7%

2010 9.0% 3.6% 4.3% 8.6% 6.5% 5.0%

2011 8.5% 3.4% 4.6% 8.3% 6.3% 5.2%

2012 9.4% 2.6% 5.1% 9.0% 6.3% 5.8%

2013 9.3% 2.2% 5.1% 9.2% 6.0% 5.7%

2014 8.8% 1.8% 5.2% 9.6% 5.6% 5.8%

The share of trade with Africa in the North’s and the South’s trade with the world

Africa’s 34 least developed countries

• Angola, Benin, Burkina Faso, Burundi, Central

African Republic, Chad, Comoros, Democratic

Republic of the Congo, Djibouti, Equatorial

Guinea, Eritrea, Ethiopia, Gambia, Guinea,

Guinea-Bissau, Lesotho, Liberia, Madagascar,

Malawi, Mali, Mauritania, Mozambique,

Niger, Rwanda, São Tomé and Príncipe,

Senegal, Sierra Leone, Somalia, South Sudan,

Sudan, Tanzania, Togo, Uganda, and Zambia.

Bilateral trade of the North and the South with

34 African LDCs, 2000-2014 (current US$ billion)

23 25 25 31

35

46 54

65

89

62 67

88 84 87 86

5 5 6 9 14

20

29

39

59

50

70

86

96 104

112

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

North South

Merchandise trade of the North and the South with Africa’s

LDCs, 2000-2014

• In the years 2000-2014, the value of bilateral merchandise trade between the North and Africa’s LDCs increased 3.7 times


• The South- Africa’s LDCs trade increased 20.8 times


• 2000-2008 – the North-Africa’s LDCs trade was 2.1 times bigger than the South- Africa’s LDCs

• 2009-2014 – the North-Africa’s LDCs trade accounted for 0.9 of the South- Africa’s LDCs one

Bilateral trade of the North and the South with 34

African LDCs, 2000-2014 (current US$ billion)

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EU US China India


LDCs, 2000-2014

2000 North – 81.1%; South – 18.9% 2014 North – 43.4%; South – 56.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

North South


least developed countries, 2000-2014 (current US$ billion)




0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2002

2004

2006

2008

2010

2012

2014

EU US China India

African countries for which China and India were more

important trading partners than the EU and the US

Period Exports of goods Imports of goods

2000-2008

4 countries 5 countries

Benin, Djibouti, Lesotho,

Somalia

Sudan, Benin, Guinea-Bissau,

Burkina Faso, Somalia

2009-2014


Tanzania, Kenya, Liberia, Sudan,

Benin, Mozambique, Djibouti,

Mauritius, Somalia, Zimbabwe,

Zambia, Gambia, Lesotho,

Uganda, Malawi, Swaziland,

Eritrea

Angola, Sudan, South Africa,

Zambia, Dem. Rep. of Congo,

Mauritania, Congo, Sierra

Leone, Benin, Tanzania,

Guinea-Bissau, Mali, Eritrea,

Burkina Faso, Gambia, Somalia

African countries for which China was more

important trading partner than the EU


2000-2008


Benin, Lesotho Angola, Sudan, Congo,

Burkina Faso, Benin, Somalia

2009-2014


Liberia, Benin, Tanzania, Sudan,

Djibouti, Kenya, Ethiopia,

Gambia, Zimbabwe, Lesotho,

Somalia, Mozambique, Zambia

Angola, South Africa, Sudan,

Congo, Zambia, Dem. Rep. of

Congo, Mauritania, Sierra

Leone, Benin, Mali, Chad,

Burkina Faso, Eritrea, Gambia,

Rwanda, Guinea-Bissau,

Somalia

• Both, the North and the South imported more goods from African countries than they exported there.

• They traded mainly with several African countries rich in natural resources.

• In the years 2000-2014, top ten African importers accounted for 80.9% of the North’s exports to Africa while the top ten exporters accounted for 85.5% of the North’s imports from the region.

• Top ten African importers accounted for 68.9% of the South’s exports to the continent. The South imported 86.4% of all goods only from 10 African countries.

Rank

Exports of goods Imports of goods Total trade with Africa

Trading

partner Value

Trading

partner Value

Trading

partner Value

Trading partners of the North

1 South Africa 431.8 Nigeria 578.7 South

Africa 880.8

2 Egypt 281.2 Algeria 567.6 Algeria 844.6

3 Algeria 277.1 South

Africa 449.0 Nigeria 785.5

4 Morocco 252.1 Libya 400.9 Libya 492.4

5 Nigeria 206.8 Angola 219.7 Egypt 430.6

Trading partners of the South

1 South Africa 150.3 South

Africa 290.0

South

Africa 440.4

2 Nigeria 101.1 Angola 259.5 Angola 291.1

3 Egypt 86.0 Nigeria 108.9 Nigeria 210.0

4 Algeria 51.1 Sudan 58.1 Egypt 114.6

5 Kenya 43.9 Congo 43.0 Sudan 85.0

Top five trading partners of the North and the South in Africa, 2000-2014 (current

US$ billion)

Annual growth rate of trade with Africa (%), 2000-2014

Trading

partner

The European Union The United States

Exports Imports Total Exports Imports Total

54

African

countries

8.3% 6.7% 7.4% 8.6% 1.3% 4.1%

34

Africa’s

LDCs

9.8% 9.2% 9.6% 14.5% 5.1% 7.9%

Annual growth rate of trade with Africa (%), 2000-2014

Trading

partner

China India

Exports Imports Total Exports Imports Total

54

African

countries

22.6% 22.4% 22.5% 22.2% 17.8% 18.8%

34

Africa’s

LDCs

24.0% 21.1% 22.1% 22.7% 25.1% 23.7%

Trade of the EU with 54 African countries,

2000-2014 (USD billion)

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Exports to Africa Imports from Africa

Trade deficit

The EU’s top five trading partners in Africa,


Rank European exports European imports Bilateral trade

Country Value Country Value Country Value

1 South

Africa 358.3 Algeria 419.8

South

Africa 700.2

2 Algeria 257.8 Libya 378.1 Algeria 677.6

3 Morocco 232.5 South

Africa 341.9 Libya 464.3

4 Egypt 211.4 Nigeria 276.3 Nigeria 437.0

5 Tunisia 174.0 Tunisia 151.2 Morocco 380.9

60.9% 66.4% 61.5%

The EU-Africa trade relations

• Relations between Europe and Africa have

evolved over the years.

• They were mainly determined by the European

colonialism, the Cold War, and various stages

of enlargement of the European Economic

Community (EEC) and then the European

Union.


• The first institutional relations between six member states of the EEC and their former colonies in Africa were established in the Treaty of Rome in 1957.

• The Treaty created a free trade area between the EEC and Sub-Saharan Africa.

• Additionally, the EEC’s member states established the European Development Fund (EDF) to provide development aid to African countries.


• After independence, trade relations between the EEC and 18 African countries were regulated by the Yaoundé Conventions of 1963 and 1969.

• The Conventions maintained the system of preferential trade between the EEC and Sub-Saharan Africa and financial support through the EDF.

• Due to differences in economic potential between trading sides, Africa has become a market for the European goods. Besides, the Yaoundé Conventions were a continuation of post-colonial relations.


• Since the second half of the 1970s, trade relations between the Western Europe and Sub-Saharan Africa were defined by Lomé I (1975), Lomé II (1979), Lomé III (1984), Lomé IV (1989) and Lomé IV-bis (1995) Conventions.

• Europe has granted non-reciprocal trade preferences to Sub-Saharan Africa. African manufactured goods and agricultural products that were not covered by the Common Agricultural Policy gained duty-free access to the European market.


• Separate protocols guaranteeing prices and quotas for sugar, bananas, rum, and meat were implemented.

• The Lomé system was supplemented by System of Stabilization of Export Earnings (STABEX) and System of Stabilization of Export Earnings from Mining Products (SYSMIN).


• The critics of the Lomé trade regime mainly pointed out that:

it reinforced Sub-Saharan Africa’s dependence on exports of a few primary commodities to Europe,

did not contribute to an increase in the share of African countries in the trade with Europe,

failed to stimulate development of African countries,

and worked against the development of regional trade and cooperation links.


• 2000 – Cotonou Agreement – trade between

the EU and African countries will be based on

the principles of free trade and neoliberal

orthodoxy.

• It replaced Lomé Conventions that granted

non-reciprocal trade preferences to African

countries.


• The EU has been negotiating the Economic

Partnership Agreements (EPAs) with five

groups of African countries:

Central Africa,

Eastern and Southern Africa,

East African Community,

Southern African Development Community,

West Africa.

Central Africa

(8 countries)

Cameroon, Central African Republic, Chad, Congo,

Democratic Republic of Congo, Equatorial Guinea, Gabon,

São Tomé and Príncipe,

Eastern and Southern Africa

(ESA) (13 countries)

Comoros, Djibouti, Eritrea, Ethiopia, Madagascar, Malawi,

Mauritius, Seychelles, Somalia, South Sudan, Sudan,

Zambia, Zimbabwe

East African Community

(EAC) (5 countries) Burundi, Kenya, Rwanda, Tanzania, Uganda

Southern African

Development Community

(SADC) (7 countries)

Angola, Botswana, Lesotho, Mozambique, Namibia,

South Africa, Swaziland

West Africa (16 countries) Benin, Burkina Faso, Cabo Verde, Côte d’Ivorie, Gambia,

Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania,

Niger, Nigeria, Senegal, Sierra Leone, Togo

Caribbean (16 countries)

Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba,

Dominica, Dominican Republic, Grenada, Guyana, Haiti,

Jamaica, St. Kitts and Nevis, Saint Lucia, St. Vincent and

Grenadines, Suriname, Trinidad and Tobago,

Pacific (15 countries) Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia,

Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon

Islands, Timor-Leste, Tonga, Tuvalu, Vanuatu


• The EU granted African products full duty-free and

quota-free access, except for products competitive

with those falling under the Common Agricultural

Policy.

• The standard request from the European Union is that

African countries gradually open 80% of their

markets to imported goods from the EU.


• In 2009, Madagascar, Mauritius, Seychelles, and Zimbabwe signed interim EPA with the European Union.

• In 2014, East African Community (Burundi, Kenya, Rwanda, Tanzania, and Uganda) finalised the negotiations for a region-to-region EPA.

• In 2016, the EU signed EPA with Southern African Development Community (Botswana, Lesotho, Mozambique, Namibia, South Africa, and Swaziland).

• 7 African countries signed free trade agreements with the EU.

• The free trade areas have been in force with Tunisia (since 1998), Morocco (2000), South Africa (2000), Egypt (2004), Algeria (2005), Côte d’Ivorie (2009), and Cameroon (2014).


• African countries that are in final stages of negotiating EPAs can export to the European market under

the EU Generalized System of Preferences (GSP)

the GSP+ sub-regime if they ratified and implemented international conventions relating to human and labour rights, the environment and good governance,

Everything but Arms (EBA) sub-regime of GSP if they are classified as least developed countries.


• Negotiations on EPAs with African LDCs are complicated.

• The EBA grants them duty-free and quota-free access to the European markets for all their export products with the exception of arms and ammunitions.

• They have an access to preferences that do not require them to liberalize access to their own markets. They have limited incentives to negotiate reciprocal agreements.

• The acceptance of reciprocal agreement deprives them to protect their domestic industries and they lose tariff revenues which constitutes high proportion of their total government revenues.


• Aid for trade: to support trade policy and

regulations, trade development, trade-related

infrastructure, building productive capacity,

trade-related adjustments, and other trade-

related needs in beneficiary countries.


• Trade relations between the EU and Africa are very complicated.

• The EU negotiates agreements with individual African countries, groups of countries, and the African Union.

• It declares partnership, insists on multilateral trade liberalization by African countries but at the same time protects its own market.

• The EU provides more and more development assistance to African countries. However, its assistance is highly conditional.

Merchandise trade of the US with Africa,


11 12 11 11 13 16 19 24

29 24 28

33 33 35 38 29 27 23

34

48

68

84

95

117

65

87 95

68

51

36

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Exports Imports

Total trade of the US and the EU with Africa, 2000-2014

Total trade of the US and China with Africa, 2000-2014

2000-2014 – a 7 percentage

point decrease

2000-2014 – a 54.2 percentage

point decrease

0% 20% 40% 60% 80% 100%

2000

2002

2004

2006

2008

2010

2012

2014

US EU

0% 20% 40% 60% 80% 100%

2000

2002

2004

2006

2008

2010

2012

2014

US China

Total trade of the US and the India with Africa,

2000-2014

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

US India

2000-2014 – a 38.1 percentage

point decrease

African countries for which the United States were

more important trading partner than China


2000-2008


Egypt, Angola, Equatorial

Guinea, Gabon, South Africa,

Chad, Namibia, Seychelles,

Niger, Eritrea, Tunisia,

Central African Republic,

Swaziland, Cabo Verde,

Malawi, Sierra Leone, São

Tomé and Príncipe, Somalia,

Burkina Faso

Nigeria, Algeria, South Africa,

Egypt, Gabon, Angola, Chad, Côte

d’Ivorie, Libya, Lesotho, Morocco,

Madagascar, Kenya, Tunisia,

Mauritius, Equatorial Guinea,

Swaziland, Ghana, Congo,

Cameroon, Botswana, Guinea,

Malawi, Liberia, Namibia, Niger,

Sierra Leone, Uganda, Ethiopia,

Senegal, Seychelles, Comoros,

Guinea-Bissau, Burundi, Cabo

Verde, Djibouti, São Tomé and

Príncipe

African countries for which the United States were

more important trading partner than China


2009-2014


Equatorial Guinea, Central

African Republic

Nigeria, Algeria, Chad, Gabon,

Côte d’Ivorie, Egypt, Morocco,

Tunisia, Kenya, Lesotho,

Mauritius, Botswana, Guinea,

Niger, Madagascar, Swaziland,

Malawi, Djibouti, Seychelles,

Cabo Verde, Liberia, Comoros,

São Tomé and Príncipe

The US’s top five trading partners in Africa,


Rank American exports American imports Bilateral trade


1 South Africa 73.5 Nigeria 302.4 Nigeria 348.5

2 Egypt 69.9 Algeria 147.7 South

Africa 180.6

3 Nigeria 46.1 Angola 133.7 Algeria 167.0

4 Morocco 19.7 South Africa 107.1 Angola 150.7

5 Algeria 19.3 Gabon 31.5 Egypt 98.6

74.8% 77.9% 68.0%

Regions in Africa

Northern Africa (7 countries)

Algeria, Egypt, Libya, Morocco, South Sudan, Sudan, Tunisia

Western Africa (16 countries)

Benin, Burkina Faso, Cabo Verde, Côte d’Ivorie, Gambia, Ghana, Guinea,

Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra

Leone, Togo

Central Africa (9 countries)

Angola, Cameroon, Central African Republic, Chad, Congo, Democratic

Republic of Congo, Equatorial Guinea, Gabon, São Tomé and Príncipe

Eastern Africa (17 countries)

Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi,

Mauritius, Mozambique, Rwanda, Seychelles, Somalia, Uganda, Tanzania,

Zambia, Zimbabwe

Southern Africa (5 countries)

Botswana, Lesotho, Namibia, South Africa, Swaziland

Trade of the EU and the US with African regions, 2000-2014

Exports Imports

US 22.6%

US 36.9%

US 22.9%

US 35.0%

US 26.7%

US 23.2% EU 48.9%

EU 18.9%

EU 18.5%

EU 51.7%

EU 17.4%

EU 16.7%

The US-Africa trade relations

• The US-Africa relations have been determined mainly by the slave trade and the Cold War.

• For a long time, Africa played minor role in American trade. The United States exported their goods mainly to South Africa and imported natural resources from Nigeria.

• Until the beginning of the 21st century, the US trade policy towards African countries was based on the Generalised System of Preferences (GSP) that came into effect in 1976.


• In 2000, the United States extended a preferential access of Sub-Saharan African countries to the American market of goods.

• They implemented the African Growth and Opportunity Act (AGOA). The AGOA expands benefits under GSP.

• The GSP scheme grants duty-free entry for approximately 5 000 American tariff line items.

• It provides duty-free market access on more than 1,800 tariff line items in addition to the standard GSP list. The AGOA expands market access for textile and apparel goods for eligible countries.


• A country is deemed eligible to benefit from the US AGOA if it has established, or is making progress toward establishing market-based economy, elimination of barriers to US trade and investment, protection of intellectual properties, protection of human rights and worker rights, elimination of child labour practices, policy to reduce poverty, increasing availability of health care and educational opportunities, the rule of law and political pluralism, and efforts to combat corruption.


• Each year the president of the United States evaluates and decides which country is eligible for the AGOA.

• In 2015, 38 Sub-Saharan African countries were eligible for trade benefits of the US AGOA.

• Between 2000 and 2015, the United States granted the status of AGOA-eligibility to 43 Sub-Saharan African countries. However, seven of them were declared ineligible: Central African Republic and Eritrea on January 1, 2004, Democratic Republic of Congo (December 21, 2010), Guinea-Bissau (December 20, 2012), Swaziland (June 26, 2014), Gambia (December 23, 2014), and South Sudan (December 23, 2014). Burundi has not been the AGOA-beneficiary country since January 1, 2016.

• Four African countries have never been granted the status of AGOA-eligibility: Equatorial Guinea, Somalia, Sudan, and Zimbabwe.


• In 2015, 24 countries were eligible for the AGOA textile benefits.

• The following countries met the requirement to benefit from the AGOA textile project: Benin, Botswana, Burkina Faso, Cabo Verde, Cameroon, Chad, Côte d’Ivorie, Ethiopia, Ghana, Guinea, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Sierra Leone, Tanzania, Uganda, and Zambia.


• Non-AGOA Sub-Saharan African countries (except Sudan) benefit from the US Generalised System of Preferences.

• The US signed a reciprocal trade agreement only with Morocco. The agreement came into force in 2006 and concerns the deregulation and liberalisation of market of goods, services, and investment.

• In 2002, the United States signed a Trade and Investment Framework Agreement with Tunisia. However, negotiations between both partners on free trade agreement seem to be postponed.


• The US AGOA excludes some agricultural products (240 tariff lines) that are important for SSA exports (certain products within the general categories of beef, dairy, vegetables, peanuts, oilseed products, sugar and sweeteners, cocoa products, tobacco, wool, cotton, or flax).

• Excluded products are subject to tariff rate quotas.


• The AGOA was developed and advanced by the United States to improve the trade with Sub-Saharan Africa and to promote American investment in the region.

• However, the trade under the AGOA benefits only a few African countries.

• The programme rather encourages the American exploitation of Africa through trade and creates dependency of SSA countries on the US for both economic and political decisions.

• It is also worth noting that the mono-cultural economy of Sub-Saharan African countries do not allow for full implementation of the AGOA.

Merchandise trade of China and India

with 54 African countries

• Since the beginning of the 21st century, the value of bilateral merchandise trade between China and Africa increased nearly 21 times, from USD 10.6 billion in 2000 to USD 221.5 billion in 2014.

• The value of bilateral trade in goods of India with Africa increased over 13 times, from USD 5.6 billion in 2000 to USD 74.9 billion in 2014.

• In 2000, bilateral trade of China with Africa was 1.9 times larger than India-Africa one, while in 2014 three times.

Total merchandise trade of China and India with 54

African countries, 2000-2014 (USD billion)

10.6 10.8 12.3 18.5 29.4

39.7 55.4

73.7

107.1 91.0

126.9

166.2

198.4 210.0

221.5

5.6 5.2 6.3 6.9 8.2 11.6 22.2

30.7 42.0

34.4 49.3

63.1 70.4 73.5 74.9

0

50

100

150

200

250

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China India

• The value of China’s total trade with 54

African countries surpassed India’s nearly 3 times in the years 2000-2014.

• China’s trade domination in Africa is more evident in the case of Africa’s least developed countries.

• The value of China’s bilateral trade in goods with 34 Africa’s LDCs surpassed India’s about 4.3 times in the years 2000-2014.

Total merchandise trade of China and India with

Africa’s 34 LDCs, 2000-2014 (USD billion)

4.4 4.0 4.7 7.0 12.3

17.3

25.3

32.3

50.8

40.3

58.3

70.2 76.4

80.3

88.5

1.0 1.2 1.5 1.7 2.2 2.8 3.8 6.4 8.4 9.6 12.1 16.0

19.7 23.6 23.9

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China India

African countries for which India was more

important trading partner than China

Period Exports of goods

(9 countries)

Imports of goods

(21 countries)

2000-

2014

Mauritius, Kenya,

Mozambique, Somalia,

Seychelles, Malawi,

Uganda, Swaziland,

Burkina Faso

Nigeria, Egypt, Morocco,

Guinea, Senegal, Côte

d’Ivorie, Guinea-Bissau,

Tunisia, Tanzania, Kenya,

Togo, Botswana, Swaziland,

Somalia, Mauritius, Comoros,

Malawi, Djibouti, Benin,

Cabo Verde, Seychelles

Merchandise trade of China and India with Africa,


0

20

40

60

80

100

120

140

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Imports

China's imports from Africa

India's imports from Africa

0

20

40

60

80

100

120

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Exports

China's exports to Africa

India's exports to Africa

Merchandise trade of China and India with Africa,


0

20

40

60

80

100

120

140

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

China

Exports Imports

Negative trade balance

0

5

10

15

20

25

30

35

40

45

50

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

India

Exports Imports

• In the years 2000-2014 – China had a trade

deficit with 16 out of the 53 African countries.

• India recorded a trade deficit with 17 African

countries.

• Trade relations between China and Africa, and

India and Africa create and sustain the

asymmetry between those Asian countries and

the net-winner and net-loser African countries.

Trade of China and India with African regions, 2000-2014

Exports Imports

India 35.6%

China 33.1%

China 28.6%

India 21.9%

China 43.8%

China 31.3%

India 39.4%

India 22.9%

Trade with African regions, 2000-2014

Trading partner Northern

Africa

Central

Africa

Southern

Africa

Eastern

Africa

Western

Africa

China Exports 28.55% 8.10% 18.73% 13.29% 31.33%

Imports 14.91% 43.84% 31.29% 4.62% 5.34%

India Exports 19.67% 4.57% 18.31% 35.59% 21.86%

Imports 17.68% 16.51% 22.89% 3.49% 39.42%

Top five China’s trading partners in Africa,


Rank China’s exports China’s imports Bilateral trade


1 South

Africa 113.4

South

Africa 225.0

South

Africa 338.4


3 Egypt 65.6 Former

Sudan 54.4 Nigeria 91.9

4 Algeria 43.7 Congo 40.1 Former

Sudan 74.9

5 Angola 27.1 Libya 26.2 Egypt 74.8

60.5% 51.6% 77.6%

Top five India’s trading partners in Africa,


Rank India’s exports India’s imports Bilateral trade


1 South

Africa 36.9 Nigeria 96.8 Nigeria 118.0

2 Kenya 23.2 South

Africa 65.1

South

Africa 102.0


4 Egypt 20.4 Egypt 19.3 Egypt 39.8

5 Tanzania 15.4 Morocco 10.2 Kenya 24.3

64.6% 77.8% 55.6%

• Both, China and India mainly import mineral

resources and raw materials from Africa.

• China supplies industrial machinery, electrical

and electronic equipment to Africa.

• India exports refined petroleum, automobiles,

textiles, and pharmaceuticals to Africa.

• China and India have been intensively developing trade relations with African countries in 21st century.

• Their economic growth and constantly increasing demand for natural resources, food, and new markets caused that resource-rich Africa became very important partner for China and India

• China and India compete in Africa not only for strategic space but also for ensuring support on the international arena.

Sino-African relations in the 21st century

• In development of trade relations between China and Africa the key dates were 2000, 2003, and 2006.

• 2000 – the First Ministerial Conference of FOCAC (Forum on China-Africa Cooperation) – Programme for China-Africa Cooperation in Economic and Social Development – cancellation of RMB 10 billion of debts of the heavily indebted poor countries and least developed countries in Africa (RMB 18.96 billion cancelled)

• 2003 – the 2nd Ministerial Conference of FOCAC, further increase assistance for Africa, zero-tariff treatment to products exported to China from some of Arica’s LDCs. Special economic zones in Africa.


• 2006 – the 3rd Ministerial Conference of

FOCAC, a new type of strategic partnership

featuring political equality and mutual trust,

win-win economic cooperation and cultural

exchanges

• China EX-IM Bank, USD 2 billion in

concessional loans and USD 3 billion in

preferential export credits in 2007-2009


• The 4th Ministerial Conference of FOCAC, 2009

• 8 new measures for China-Africa cooperation, covering agriculture, environmental protection, investment promotion, debt exemption, market access expansion, addressing climate change, scientific and technological cooperation, health care, education, cultural exchanges and other areas

• USD 10 billion in concessional/preferential credits was announced for Africa, committed in 2010-2012


• The 5th Ministerial Conference of FOCAC, 2012

• China declared to provide USD 20 billion of credit line to African countries, train 30 000 personnel in various sector, offer 18000 government scholarships, send 1500 medical personnel, sponsor 100 projects of research.

• The 6th Ministerial Conference of FOCAC, 2015 – China’s declaration of a further assistance of USD 60 billion for African countries in the years 2016-2018.

Indo-African relations in the 21st century

• The 2000s – India extended lines of credit and grants for Africa.

• 2004 – African countries have been beneficiaries of Indian Development and Economic Assistance Scheme.

• Special Commonwealth African Assistance Programme (SCAAP); Indian Technical and Economic Cooperation Programme (ITEC).

Indo-African relations in the 21st century

• In the late 2000s economic and trade relations between India and Africa were strengthen during the India-Africa Forum Summits.

• 2008 – the First India-Africa Forum Summit (India committed USD 5.4 billion)

• 2011 – the Second India-Africa Forum Summit (USD 5 billion)

• 2015 – the Third India-Africa Forum Summit (USD 10.6 billion)

• Since the beginning of the 21st century, the Sino-Indian trade competition in Africa has been observed.

• China and India in order to increase merchandise trade with Africa intensively develop South-South cooperation with countries in the region.

• Besides, China and India develop and strength their trade relations during high-level visits and official forums like FOCAC or the India-Africa Forum.

• Both, China and India use development assistance in the form of loans and grants to develop their bilateral trade relations with African countries.

• The winner of the Sino-Indian trade

competition in Africa is China.

• China is diplomatically more active and

invests more in Africa than India.

• China more intensively supports domestic

companies which trade with Africa and

provides more development assistance to

African countries than India.

• Merchandise trade with Latin America

Regions in Latin America

Central America (7 countries)

Belize, Costa Rica, Guatemala, Honduras, Nicaragua,

Panama, Salvador

South America (13 countries)

Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador,

Guyana, Paraguay, Peru, Surinam, Trinidad and Tobago,

Uruguay, Venezuela

Mexico

Bilateral trade of the North and the South with 21 Latin

American countries, 2000-2014 (current US$ billion)

464 444 437 461 546

619

716 789

903

697

881

1063 1112 1105 1110

14 16 19 28 42 53 75 108 155 130

198 261 293 301 304

0

200

400

600

800

1000

1200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

North South

Merchandise trade of the North and the South

with Latin America

• In the years 2000-2014, the value of bilateral

merchandise trade between the North and

Latin America increased 2.2 times.


• The South-Latin America trade increased 22.4

times.

• Annual growth rate – 23%



0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US EU China India

Year The EU The US China India The North The South

2000 5.7% 18.0% 2.5% 1.7% 12.4% 2.4%

2001 5.8% 18.2% 2.8% 2.0% 12.4% 2.6%

2002 5.3% 18.0% 2.7% 1.9% 11.9% 2.6%

2003 5.2% 17.5% 3.0% 1.8% 11.3% 2.8%

2004 5.2% 17.7% 3.3% 2.0% 11.3% 3.1%

2005 5.2% 17.8% 3.4% 2.1% 11.3% 3.2%

2006 5.4% 18.2% 3.8% 2.9% 11.7% 3.6%

2007 5.8% 17.9% 4.5% 2.8% 11.3% 4.3%

2008 6.2% 18.5% 5.4% 3.4% 11.8% 5.1%

2009 5.7% 19.1% 5.3% 2.9% 11.6% 4.9%

2010 6.2% 19.9% 6.0% 3.6% 12.5% 5.6%

2011 6.1% 20.7% 6.4% 3.6% 12.6% 5.9%

2012 6.3% 21.2% 6.5% 5.1% 13.1% 6.3%

2013 6.2% 21.1% 6.1% 5.8% 13.0% 6.1%

2014 5.7% 21.0% 5.9% 6.2% 12.8% 6.0%

The share of trade with LA in the North’s and the South’s trade with the world






0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2002

2004

2006

2008

2010

2012

2014

USA EU China India

Bilateral trade of the North and the South with Central

and South America, 2000-2014 (current US$ billion)

0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US EU China India

Bilateral trade of the North and the South with Central and

South America, 2000-2014 (current US$ billion)




0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2002

2004

2006

2008

2010

2012

2014

US EU China India


2000-2008 1 country 1 country

Panama Argentina

2009-2014


Panama, Uruguay Brazil, Chile, Argentina,

Peru, Uruguay

Latin American countries for which China and India were more important

trading partners than the US


2000-2008 2 countries 0

Panama, Paraguay –

2009-2014


Panama, Peru, Chile, Paraguay,

Guatemala, Uruguay, Nicaragua,

Honduras, Ecuador, Guyana

Venezuela, Chile, Brazil,

Peru, Uruguay

Latin American countries for which China and India were more important

trading partners than the EU

Latin American countries for which the EU was

more important trading partner than the US


2000-

2008


Brazil, Argentina

Brazil, Argentina, Chile,

Panama, Uruguay, Paraguay,

Guyana, Suriname

2009-

2014


Brazil, Argentina,

Uruguay, Suriname

Brazil, Argentina, Chile,

Uruguay, Paraguay, Peru,

Panama, Suriname, Belize

• Both, the North and the South imported more goods from Latin American countries than they exported there.

• 2013-2014 – the EU had trade surplus

• 2012-2014 – China had trade surplus

• The North and the South traded mainly with 5 LA countries.

• In the years 2000-2014, top five LA importers accounted for 82.0% of the North’s exports to LA while the top five exporters accounted for 83.3% of the North’s imports from the region.

• Top five LA importers accounted for 76.1% of the South’s exports to the region. The South imported 84.3% of all goods from 5 Latin American countries.

Rank

Exports of goods Imports of goods Total trade with LA

Trading

partner Value

Trading

partner Value

Trading

partner Value

Trading partners of the North

1 Mexico 2610 Mexico 3268 Mexico 5878

2 Brazil 858 Brazil 901 Brazil 1759

3 Chile 236 Venezuela 542 Venezuela 749

4 Colombia 208 Colombia 281 Chile 511

5 Venezuela 207 Chile 275 Colombia 489

Trading partners of the South

1 Brazil 266 Brazil 400 Brazil 666

2 Mexico 210 Chile 175 Mexico 298

3 Panama 98 Venezuela 135 Chile 264

4 Chile 89 Mexico 88 Venezuela 182

5 Argentina 61 Argentina 80 Argentina 141

Top five trading partners of the North and the South in LA, 2000-2014 (current US$

billion)

Bilateral trade of the EU with 54 African countries and 21

Latin American countries, 2000-2014 (USD billion)

139 142 144 173

204

245 276

320

406

307

346

400 433 426

408

96 97 95 107 131

148 179

219

260

190

237

287 288 281 263

0

50

100

150

200

250

300

350

400

450

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Africa Latin America

Merchandise trade of the EU with 54 African countries

and 21 Latin American countries

• In the years 2000-2014, the value of bilateral merchandise trade between the EU and Africa increased nearly 3 times.


• The EU-Latin America trade increased 2.7 times.


• 2000-2014 – the EU-Africa trade was 1.5 times bigger than the EU-Latin America

Bilateral trade of the EU with 54 African countries

and 21 Latin American countries, 2000-2014

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2002

2004

2006

2008

2010

2012

2014


2014 Africa – 60.8%; Latin America – 39.2%

Total trade of the EU and the US with Latin America, 2000-2014

Total trade of the EU and China with Latin America, 2000-2014

2000-2014 – a 2.9 percentage increase 2000-2014 – a 38.3 percentage decrease

0% 20% 40% 60% 80% 100%

2000

2002

2004

2006

2008

2010

2012

2014

EU China

0% 20% 40% 60% 80% 100%

2000

2002

2004

2006

2008

2010

2012

2014

EU US

Total trade of the EU and the US

with Central and South America Total trade of the EU and China with Central and South America

2000-2014 – a 0.2 percentage increase 2000-2014 – a 39.5 percentage decrease

0% 20% 40% 60% 80% 100%

2000

2002

2004

2006

2008

2010

2012

2014

EU US

0% 20% 40% 60% 80% 100%

2000

2002

2004

2006

2008

2010

2012

2014

EU China

Total trade of the EU and China with South America, 2000-2014

Total trade of the EU and China with Central America, 2000-2014

2000-2014 – a 39.9 percentage decrease 2000-2014 – a 37.1 percentage decrease

0

50

100

150

200

250

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

EU China

0

5

10

15

20

25

30

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

EU China

Trade of the EU with 21 Latin American countries,


0

20

40

60

80

100

120

140

160

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Exports to Latin America Imports from Latin America

Trade surplus in 2013-2014

The EU’s top five trading partners in Latin America,


Rank European exports European imports Bilateral trade


1 Brazil 462.6 Brazil 530.0 Brazil 992.6

2 Mexico 375.7 Mexico 224.9 Mexico 600.6

3 Argentina 111.5 Chile 163.0 Chile 261.9

4 Chile 98.9 Argentina 148.5 Argentina 260.0

5 Venezuela 70.8 Colombia 87.9 Colombia 154.1

78.8% 76.8% 81.3%

The EU-Latin America trade relations

• Relations between the regions were regulated

during the first EU-LAC (Latin America and

the Caribbean) summit in 1999.

• The summit established a strategic partnership

between the EU and LAC.

• Since 2011, the EU-LAC Foundation has been

operating.

Trade agreements between the EU and LAC

Agreement name Date of entry into force

EU to CARIFORUM States EPA 01-Nov-2008

EU to Central America (Costa Rica,

El Salvador, Guatemala, Honduras,

Nicaragua, and Panama)

01-Aug-2013

EU to Chile 01-Feb-2003 (Goods),

01-Mar-2005 (Services)

EU to Colombia and Peru 01-Mar-2013

EU to Mexico 01-Jul-2000 (Goods),


The EU is currently negotiating a trade agreement with Mercosur

(Argentina, Brazil, Paraguay, Uruguay, and Venezuela)

Merchandise trade of China with 54 African countries and

21 Latin American countries, 2000-2014 (USD billion)

11 11 12 18 29

40 55

74

107 91

127

166

198 210

221

12 14 17 26

38 48

66

98

138

117

177

234

253 255 256

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Merchandise trade of China with 54 African countries


• Since the beginning of the 21st century, the value

of bilateral merchandise trade between China and

Africa increased nearly 21 times, from USD 10.6

billion in 2000 to USD 221.5 billion in 2014.


• Sino-Latin American trade increased 21.5 times,

from USD 11.9 billion to USD 255.7 billion.


Merchandise trade of China with Africa

and Latin America

• In 2000, the Chinese trade with Africa

accounted for 47.0% and with Latin America

for 53.0% of China’s trade with both regions

while in 2014, those shares were 46.4% and

53.6%, respectively.

• The advantage of Latin America over Africa in

trade with China was the biggest in the years

2002-2003 and 2010-2011.

Merchandise trade of China with Africa and Latin

America, 2000-2014

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Trade of China with Africa and Latin America,



0

20

40

60

80

100

120

140

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Exports Imports

0

20

40

60

80

100

120

140

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Exports Imports

• In the years 2000-2014 – China had a trade


• China recorded a trade deficit with 6 out of the

21 Latin American countries.

China’s exports to Africa and Latin America, 2000-2014 (USD billion)

China’s imports from Africa and Latin

America, 2000-2014 (USD billion)

0

20

40

60

80

100

120

140

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14


0

20

40

60

80

100

120

140

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14


Top five China’s trading partners in Latin America,


Rank China’s exports China’s imports Bilateral trade


1 Brazil 226.9 Brazil 369.6 Brazil 596.5

2 Mexico 197.1 Chile 156.0 Mexico 265.8

3 Panama 96.7 Venezuela 76.9 Chile 239.9

4 Chile 83.9 Mexico 68.7 Argentina 124.9

5 Argentina 57.0 Argentina 67.9 Venezuela 121.6

77.2% 76.3% 83.9%

Merchandise trade of India with 54 African countries and

21 Latin American countries, 2000-2014 (USD billion)

6 5 6 7 8 12

22

31

42

34

49

63

70 73 75

2 2 2 2 4 5 9 10

17 13

21

27

40

46 48

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Merchandise trade of India with 54 African countries


• The value of bilateral trade in goods of India with Africa increased over 13 times, from USD 5.6 billion in 2000 to USD 74.9 billion in 2014.


• India-Latin America trade increased about 30 times, from USD 1.6 billion to USD 48.0 billion.


Merchandise trade of India with Africa

and Latin America

• Africa is more important trading partner for India than Latin America. However, its role in India’s bilateral trade has been decreasing.

• In 2000, India’s trade with Africa accounted for 77.8% and with Latin America for 22.2% of India’s trade with both regions while in 2014, those shares were 60.9% and 39.1%, respectively.

Merchandise trade of India with Africa

and Latin America

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


India’s exports to Africa and Latin America, 2000-2014 (USD billion)

India’s imports from Africa and Latin

America, 2000-2014 (USD billion)

0

5

10

15

20

25

30

35

40

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14


0

5

10

15

20

25

30

35

40

45

50

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14


Trade of India with Africa and Latin America,



0

5

10

15

20

25

30

35

40

45

50

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Exports Imports

0

5

10

15

20

25

30

35

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Exports Imports

• In the years 2000-2014 – India had a trade


• India recorded a trade deficit with 8 Latin

American countries.

Top five India’s trading partners in Latin America,


Rank India’s exports India’s imports Bilateral trade


1 Brazil 39.9 Venezuela 58.3 Brazil 69.9

2 Mexico 12.8 Brazil 30.3 Venezuela 60.3

3 Colombia 7.4 Chile 19.5 Mexico 32.0

4 Chile 4.6 Mexico 19.2 Chile 24.1

5 Argentina 4.3 Argentina 12.3 Colombia 18.5

82.9% 80.2% 86.4%


Latin American countries, 2000-2014 (USD billion)

12 14 17 26

38 48

66

98

138

117

177

234

253 255 256

2 2 2 2 4 5 9 10 17 13 21 27

40 46 48

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China India


Latin American countries, 2000-2014

75% 80% 85% 90% 95% 100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

China India

Latin American countries for which India was more

important trading partner than China


(1 country)

2000-

2014 – Panama

Sino-Latin American relations in the 21st century

• China signed free trade agreements (FTA) with Chile (2005), Peru (2009), and Costa Rica (2010).

• 2007-2015 – nine China-Latin America business summits were held.

• 2015 – the China-CELAC (the Community of Latin American and Caribbean States) Forum was set up.

• USD 120 billion in the form of low-interest loans to Latin American countries since 2005.

• China-Latin America trade relations are strengthened during high-level visits.

Development of bilateral ties between China and

Latin America in the years 2001-2014

Year Chinese authority Visited countries

2001, April President Jiang Zemin Chile, Argentina, Uruguay, Brazil,

Cuba, Venezuela

2003, December Prime Minister Wen Jiabao Mexico

2004, November President Hu Jintao Chile, Brazil, Argentina, Cuba

2005, September President Hu Jintao Mexico

2008, November President Hu Jintao Peru, Costa Rica, Cuba

2009, February Vice President Xi Jinping Mexico, Jamaica, Colombia, Venezuela,

Brazil

2010, April President Hu Jintao Brazil

2011, June Vice President Xi Jinping Cuba, Uruguay, Chile

2012, June Prime Minister Wen Jiabao Brazil, Uruguay, Argentina, Chile

2013, May/June President Xi Jinping Trinidad and Tobago, Costa Rica,

Mexico,

2014, July President Xi Jinping Brazil, Argentina, Venezuela, Cuba

Indo-Latin American relations in the 21st century

• 1997 – India launched Focus LAC (Latin America

and the Caribbean) programme.

• Development of cooperation with Brazil: IBSA

(India-Brazil-South Africa), 2003; BRICS (Brazil-

Russia-India-China-South Africa), 2006

• 2004 – preferential agreement with MERCOSUR

(Argentina, Brazil, Paraguay, Uruguay,

Venezuela)

• 2006 – preferential agreement with Chile.

• Latin American countries benefit from trade with China. However, expansion of China’s goods causes displacing LA products from LA markets; Chinese products compete with LA products in the international market; increasing dependency of LA economies on China’s economy.

• India exports to LA mainly product components not final products. Trade with India increases LA competitiveness in in the international market and doesn’t displace domestic products in LA markets.

Conclusions

• The European Union is the largest trading

partner for Africa.

• The EU increased its advantage over the

United States in trade with Africa but it has

been steadily losing its advantage over China.

• Since 2010, China has been more significant

trading partner for Africa’s 34 least developed

countries than the EU.

Conclusions

• The EU is still the second important trading partner for Latin America.

• However, China’s trade with South America surpassed the EU’s one in 2014 and China has been more important trading partner for Central America than the EU since 2010.

• In the years 2000-2014, the EU to a great extent lost its market share in Latin America than in Africa.

Conclusions

• It seems that

in Africa the EU-led trade liberalization and its

EPAs lose with China’s trade and aid policy,

and South-South cooperation.

in Latin America the EU’s trade policy lose

with China’s trade and development aid policy.

Conclusions

• In the 21st century, the American influence on the African continent was undermined by Asian giants.

• The US ceased to be a second important trading partner for Africa in 2009 and a third in 2014.

• The Asian giants have been systematically increasing their advantage over the EU and the US in merchandise trade with the poorest African countries.

• Africa does not play important role in the merchandise trade of the United States.

Conclusions

• Latin America is not only more significant market for Chinese commodities than Africa but also more important source of natural resources for China than the African continent.

• In the years 2000-2014, India-Africa bilateral trade surpassed India-Latin America one more than two times, but Latin America has become more and more important source of goods for India.

The causes of China’s and India’s trade expansion

in Africa and Latin America

• Changes in policies (China’s „going out”),

• Development of economic cooperation (South-South cooperation) and technical cooperation.

• Development of trade relations during high-level visits and economic forums (Forum on China-Africa Cooperation, India-Africa Forum).

• Combining trade arrangements with investment and foreign aid policy.

Conclusions

• The winner of the Sino-Indian trade competition both in Africa and LA is China.

• China is diplomatically more active and invests more than India in both regions.

• China more intensively supports domestic companies which trade with Africa and LA and provides more development assistance to its African and Latin American trading partners than India.

Bibliography

• Nowak W., 2016, North-South trade competition in Africa’s least developed countries, International Business and Global Economy, 35/1.

• Nowak W., 2016, The European Union’s trade with Africa and Latin America, pp. 689-696 [in:] Primorac Z., Bussoli C., Recker N. (eds.), Economic and Social Development (Book of Proceedings), 16th International Scientific Conference on Economic and Social Development – “The Legal Challenges of Modern World”, Split, 1-2 September 2016.

• Nowak W., 2016, China-Africa and India-Africa trade in the years 2000-2014, Procedia Economics and Finance, 39.

Bibliography

• Nowak W., 2016, Africa or Latin America: Asian Giants’ Trade Expansion, pp. 527-536 [in:] Donduran M. et al. (Eds.), Proceedings of the 2nd Annual International Conference on Social Sciences (AICSS), Vol. 2, Istanbul, 2nd-4th June 2016, Yildiz Technical University.

• Nowak W., 2017, Trade competition between Asia and the European Union in Africa, 3-15 [in] M. H. Bilgin, H. Danis, E. Demir, U. Can (Eds.), Country Experiences in Economic Development, Management and Entrepreneurship, Proceedings of the 17th Eurasia Business and Economic Society Conference: 2017 (Eurasian Studies in Business and Economics 5), Springer International Publishing.

Bibliography

• Nowak W., 2017, Trade between the European

Union and African-Caribbean-Pacific

Countries, 297-305 [in] M. H. Bilgin, H.

Danis, E. Demir, U. Can (Eds.), Regional

Studies on Economic Growth, Financial

Economics and Management, Proceedings of

the 19th Eurasia Business and Economic

Society Conference, Springer International

Publishing.

Documents

International Economics dr Wioletta Nowak · 2019. 1. 8. · Waves of regionalism •The first wave of regionalism occurred in the late 1950s and 1960s. •European Coal and Steel