Weekly News – U.S. aims to invest more in Africa

Photo: U.S. State Dept./Flickr

U.S. Secretary of State Hillary Clinton’s recent trip to South Africa echoes the passage of the renewal of the third-country fabric (TCF) provision (under the African Growth and Opportunity Act (AGOA)) by Congress last week.

Although there are other players on the continent, we should not fear the competitions. As a recent article at New York Times points out, we should be grateful to China for its investments in the infrastructure. Thanks to its investments, we are now able to ship products faster and more cheaply from the local markets in Africa to Walmart warehouses in the U.S.

The TCF provision lifts the import duties of fabric and apparel and helps to support jobs and the manufacturing industry in the Sub-Saharan Africa region.

For more information: http://www.ustr.gov/about-us/press-office/blog/2012/august/weekly-trade-spotlight-third-country-fabric-provision-agoa

WTO Members Meeting Updates – Cocoa and Chocolate

At the WTO Sanitary and Phytosanitary (SPS) Measures Committee meeting on 10 – 11 July 2012, several countries raised their concerns about EU’s recent decision to amend its regulation on maximum levels of cadmium in chocolate, milk chocolate and cocoa powder. They believe the move threatens their exports and the livelihoods of smallholder cocoa farmers.

According to a report published by Journal of Occupational Medicine and Toxicology, cadmium is a type of heavy metals which may accumulate in the kidney, inducing kidney dysfunction, skeletal damage and reproductive disorders. However, its maxim amount of allowance varies among individuals depending on their diets and health conditions. [1]

The concern, first raised in October 2011, is elaborated in a paper from Cameroon, Colombia, Ecuador, Ghana, Mexico, Nicaragua and Peru, and is also supported by Guatemala, Dominican Rep, Venezuela, Cuba, Jamaica and Costa Rica. The EU agreed to listen to all the concerns at the meeting.

For more information: WTO News and Updates

Next WTO members meeting will be on 17–18 October 2012.

  1.  Godt, J., F. Scheidig, C. Grosse-Siestrup, V. Esche, P. Brandenburg, A. Reich and D. A. Groneberg,  The tocity of cadmium and resulting hazards for human health.  Journal of Occupational Medicine and Toxicology. 2006 ;1:22. doi:10.1186/1745-6673-1-22.

Environment, Conservation and Sustainability Issues

China’s and India’s rapid growth and push toward economic progress and better lifestyles for their citizens will cause the ongoing depletion of natural resources. Consequently, control of raw materials will be a vital strategic issue, often leading to preferential bilateral agreements that might contradict multilateral arrangements. Governments will attempt to put more land into grain production and use subsidies and price controls. Scarcity will also drive up the price of consumer alcohol. Protecting materials from theft (e.g., cutting electrical wires to steal copper) will become a priority. Recycling and recovery will be strong business opportunities. As fuel production from food accelerates, farming will become attractive and profitable. The global shortage of potable water will be rediscovered as a priority issue and constraint on global advancement and well-being. Government investment in desalination and reverse osmosis technologies will grow along with emphasis on water conservation.

In light of public concern over climate change, interest in energy-saving technologies will grow. Unusual natural phenomena will be attributed to global warming, a relationship that will be supported by a stream of scientific and nonscientific proof. Public perceptions will lead to changes in living patterns. For example, the population of dry, arid and hot  climate areas might shift due to water shortages and limitations on the use of air conditioning. Such changes will occur even if it becomes generally accepted that global warming is only slightly dependent on human activity.

Africa might offer the most opportunity for green investments and accumulation of carbon credits. Eventually, as governments frown on the transfer of resources resulting from carbon trading, wealthy countries and international operating companies will make agreements (both multilateral and bilateral) that create a framework to protect the environment. Key sectors for industry creation and expansion include public health; sustainability; saving energy, water and natural resources; biotechnology, genomics and nano-technology; and the creation and promotion of eco-products, services and processes. For example, sustainable water recycling technologies will spawn new industries, and governments will adopt and encourage more advanced pollution-control policies, particularly for heavy metals and engineered (non-naturally occurring) substances.

This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen.

Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg. 229-230.

Lenders Target Women in Developing World

The women of the developing world are gaining a measure of economic autonomy as perceptions of their role in emerging economies change.  Recently, international organizations and banks have moved to increase funding to women-led small businesses and farming projects.  The motivation has less to do with sexual politics than the economic reality that women do much of the work in the developing world.  A World Bank study found that women head half the households in sub-Saharan Africa, while women in the villages of Cameroon work twice as many hours per week than men.  Their earnings are more likely than men’s to be used for the health and education of the next generation.  Women are also more likely to repay loans and are less prone to waste development money.

In the developing world’s the vast “informal sector,” many so-called microenterprises, ranging from street vendors to one-person apparel makers are run by women.  The relatively new industry of microlending is thriving.  Microlenders in the developing world encourage poor women to cross-guarantee each others’ loans, with the resulting peer pressure keeping default rates to a minimum.  Marriages between international groups and grassroots groups help get the money in the hands of women. 

Sources: “Africa’s Women Go to Work,” The Economist, January 13, 2001, pp.43-44; Tim Carrington, “Gender Economics: In Developing World, International Lenders Are Targeting Women,” The Wall Street Journal, June 22, 1994, A1