The U.S. intends to cooperate on the development of the African Continental Free Trade Area, according to a joint statement signed by the African Union and the Office of the U.S. Trade Representative on Aug. 5. "The United States and the African Union intend to jointly identify subject areas related to the ongoing negotiation and implementation of the AfCFTA as subjects for cooperation and for possible technical assistance and capacity building," they said. The U.S. wants to go beyond the African Growth and Opportunity Act, which is scheduled to expire in 2025, the statement said.
The United Arab Emirates is eliminating and reducing government fees on more than 1,500 federal services, including some in the trade sector, according to a press release from the UAE’s Ministry of Finance and a July 22 report from the Hong Kong Trade Development Council. The UAE said it has agreed to cut some fees in half to make it cheaper to do business in the country and boost the UAE’s competitiveness. While the fee reductions span across the ministries of the Interior, the Economy, and Human Resources and Emiratisation, the HKTDC said the changes will have a “direct impact” on foreign trade. One change includes a reduced fee for lodging a dispute between “agents, appointed representatives and collectors from a trade agent” from about $3,200 to $2,200, the report said. The changes are expected to decrease the cost of trading to the UAE, the HKTDC said, and were expected to be introduced before July ends.
South African President Cyril Ramaphosa is backing Huawei, the Economic and Commercial Counsellor’s Office of the Chinese Embassy in the United Arab Emirates said in a July 11 press release. The press release included comments from Arthur Goldstuck of World Wide Worx, a South African market research company, who said the country has reaffirmed its commitment to buying from the Chinese tech giant. “It's very clear that Huawei has the full support of (our) government,” Goldstuck said, adding the company plays a “key role” in the South African market. He also pointed to lack of "home-grown technologies" that can ramp up quickly to 5G, so Huawei has a role to fill in the South African “engagement with the so-called 4th industrial revolution," he said.
The African Continental Free Trade Area officially went into "operational phase" on July 7 after an African Union summit meeting in Niamey, Niger, the African Union said in a July 7 news release. "The AfCFTA will be governed by five operational instruments, i.e. the Rules of Origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payments system and the African Trade Observatory," the AU said. Actual trading with reduced tariffs among the 54 member states under the AfCFTA isn't expected to begin until July 2020.
The U.S. and Tunisia signed a Customs Mutual Assistance Agreement meant to help prevent and detect customs violations, CBP said in a July 2 news release. Such agreements "allow for the exchange of information that is vital to our national and economic security,” Deputy CBP Commissioner Robert Perez said. "We value our partnership with Tunisia in pursuing our mutual goals of stronger law enforcement and a more resilient and secure supply chain. These agreements form sound legal frameworks on a wide range of issues, including securing our borders against terrorists and combatting drug traffickers. This collaboration and cooperation will enable us -- and generations after us -- to work more effectively to prevent, detect, and investigate customs offenses.” The U.S. now has CMAAs with 81 countries, it said.
Kenya is considering several tax- and trade-related measures that would impact imports and certain aspects of the country’s value-added tax regulations, according to a June 17 report from KPMG. The measures, included in Kenya’s 2019 budget proposal, would expand the definition of “supply of imported services” to apply to people who are not registered for VAT, the report said, and would expand the scope of VATs to include goods “made through the digital marketplace.” The measures would also change the “timing of the supply of imported goods” to include “the time the goods are removed from a special economic zone,” KPMG said. In addition, the measures would reduce the rate of the VAT withholding from 6 percent to 2 percent and increase the excise tax rate on alcohol and tobacco products. Lastly, the measures would allow tax exemptions for equipment used for the development of “solar and wind energy” and allow VAT exemptions for motherboards and “related components” made in Kenya and “services and machinery related to plastic recycling.”
Uganda introduced several tax-related measures in its 2019 budget proposal, including regulations that would expand the list of goods that are exempt from value-added taxes, according to a June 17 report from KPMG. The measures would allow VAT exemptions for “aircraft insurance services, rice mills and agricultural sprayers, supplies of drugs and medicines, imported mathematical sets and certain other items used in education, woodworking machines, welding machines, sewing machines, certain feasibility studies, and earth-moving equipment,” KPMG said. The measures would also reduce the “withholding rate” of VATs to 6 percent, KPMG said. The changes are expected to take effect July 1.
Adding in the unaffiliated African countries to the African Continental Free Trade Agreement remains an important step for the deal, said Giovanie Biha, the deputy executive secretary of the United Nation's Economic Commission for Africa in an ECA news release. “AfCFTA legally entered into force but for it to deliver its transformative economic potential, the signatory countries -- and the few countries that have not yet signed -- must rapidly join and ratify the Agreement to ensure that the continent moves forward together as one entity,” Biha said during a meeting of the African Ministers of Trade. Biha said "difficult decisions," including tariff offer scheduling and finalized rules of origin, still need to be made and "compromises sought, as we transform the AfCFTA legal text into an operable instrument." Albert Muchanga, commissioner for trade and industry of the African Union Commission, said "the AfCFTA is a continuation of a long journey that started with the establishment of Regional Economic Communities as building blocks of the African Economic Community. From here, Africa has to move to the next stages of customs union, common market, monetary union and eventually African Economic Community.” The African Ministers of Trade will next meet in July at the Niamey African Union Summit.
Saudi Arabia announced new excise taxes on e-cigarettes and sweetened drinks, according to a May 28 report from the Hong Kong Trade Development Council. Under an amendment to the Excise Tax Agreement of the States of the Gulf Cooperation Council, e-cigarettes and tools will be taxed at 100 percent and sweetened beverages will be taxed at 50 percent, the report said. The changes took effect May 18.
Kenyan President Uhuru Kenyatta ordered government agencies to stop additional inspections of imported goods after he said businesses have complained of too many inspections, according to a June 1 report from Capital FM Kenya. Kenyatta told officials at the Kenya Bureau of Standards, Kenya Revenue Authority and the Kenya Ports Authority to reduce inspections on pre-inspected imports unless the goods are “legitimately suspected to be entering the country illegally,” the report said. “I ask them to honor prior inspection done by their appointed agents,” Kenyatta said, according to the report. “Imported goods therefore, should not be subjected to additional inspection at the port of entry except for cases legitimately suspected not to conform to the set standards.”