StatCom Africa IIICape Town - Jan. 18-23, 2012

Statistical data requirements for

Trade and Regional Integration in Africa

Simon Mevel / RITD / UNECA

Outline of the Presentation

I. Importance of statistics in the area of trade

II. Use of trade-related statistics: a concrete example in the context of Regional Integration in Africa

III. Main data requirements for trade-related statistics

I. Importance of statistics in the area of trade

Help understanding the structure and evolution of regional, national and international markets

Are at the basis of trade policy analysis and decision making:

For direct interpretation (GDP, trade flows, employment/unemployment rates, etc.)

As inputs for economic tools (econometrics, modeling) to analyze trade policies

1) Main trade characteristics and constraints in Africa today

2) Brief description of statistical data and methodology used for analyzing the establishment of a Continental Free Trade Area (CFTA)

3) Key findings/recommendations from the analysis

II. Use of trade-related statistics: a concrete example in the context of Regional Integration in Africa

Source: COMTRADE 2010

2000 20102.3 3.0

1) Main trade characteristics and constraints in Africa today

Low share of African exports in total world exports (in %)

Source: 2010 International Trade Statistics of the World Trade Organization

2009Intra-European trade 72Intra-Asian trade 52Intra-North American trade 48Intra-South and Central American trade 26Intra-African trade 11

1) Main trade characteristics and constraints in Africa today - cont’d

Low share of intra-trade for Africa as compared to other regions (in %)

Source: Authors’ calculations based on the MIRAGE model

High concentration of African exports in primary products (in %)

1) Main trade characteristics and constraints in Africa today - cont’d

Agricultural and food products 9.4Primary products 36.3Other industrial products 35.4Services 18.9

Source: Authors’ calculations based on MAcMap-HS6 v2

1) Main trade characteristics and constraints in Africa today - cont’d

High tariff barriers to trade within the continent (in %)

Exporter ImporterAd Valorem Equivalent

(AVE) TariffAfrica Africa 8.7Rest of the World Rest of the World 3.2WORLD WORLD 3.4

1) Main trade characteristics and constraints in Africa today - cont’d

High non-tariff barriers to trade within the continent

*Average time for inland transport + customs procedures + port handling

Source: World Bank Doing Business, Trading Across Borders 2012

Average Time to Export* Average Time to import*OECD high income 10.5 days 10.7 daysLatin America & Caribbean 17.8 days 19.6 daysMiddle East & North Africa 19.7 days 23.6 daysEast Asia & Pacific 21.9 days 23.0 daysEastern Europe & Central Asia 27.0 days 28.8 daysSub-Saharan Africa 31.5 days 37.1 days

2) Brief description of methodology and statistical data used for the analysis

Computable General Equilibrium (CGE) model:

Very powerful tool for economists to conduct policy analyses of many kinds (trade policies, environmental policies, etc.)

Capable of capturing multiple interactions taking place within the different agents of the world economy – thanks to many interconnected equations representing behaviors of economic agents and various economic linkages

Also has significant constraints/limitations and represents world economy imperfectly (based on numerous assumptions) BUT it is the only tool available today to undertake assessment of complex economic policies

Modelling International Relationships in Applied General Equilibrium (MIRAGE) model - brief description:

CEPII & IFPRI, UNECA is part of MIRAGE consortium

Dynamic, multi-country & multi-sector

Particularly well designed for trade policies analysis

2) Brief description of methodology and statistical data used for the analysis – cont’d

Main data inputs for the CGE model:

Global Trade Analysis Project (GTAP) database (Purdue University).

Provides detailed data on: bilateral trade flows, transport, energy, consumption of intermediate and final goods and services, taxes and subsidies, etc.,

• 57 sectors• 129 regions

Used as global Social Accounting Matrix for the model:

Market Access Map (MAcMap) database (joint efforts between ITC, UNCTAD, WTO, CEPII & IFPRI).Exhaustive database on market access: bilateral level (220 exporters & 169 importers), 5113 product lines.

2) Brief description of methodology and statistical data used for the analysis – cont’d

Implementation of several scenarios consisting in removing tariff and non-tariff barriers:

Establishment of a Continental Free Trade Area (CFTA)

Comparison with the formation of Regional FTAs

Free Trade Area (definition):

“Region where all tariff barriers on goods are removed”

For the above cases, options with and without Trade Facilitation (TF) measures are considered

• Make customs’ procedures twice more efficient and reduce by half time merchandise spend at African ports

2) Brief description of methodology and statistical data used for the analysis – cont’d

Regional integration is not costless (example: tariff revenues losses; Aid For Trade will need to be targeted to some sectors/countries) but overall gains >> losses

The larger the FTA, the greater trade and real income gains

Reductions/eliminations of tariff barriers are necessary and deliver significant gains but does not considerably improve intra-African trade

Complementary policies (such as trade facilitation measures) are critical and must be of high priority in the negotiations

• CFTA + TF measures could double intra-African trade over a 12 years period (from 11% 2010 to nearly 22% in 2022)

3) Key findings/recommendations from the analysis

Only 20 African countries in GTAP; the other ones being aggregated in 6 heterogeneous groups (need help from statisticians to improve the database!!!)

III. Main data requirements for trade-related statistics – cont’d

GTAP label GTAP label GTAP labelEgypt Central Africa Rest of Eastern AfricaMorocco - Central African Republic - BurundiTunisia - Chad - ComorosRest of North Africa - Congo - Djibouti- Algeria - Equatorial Guinea - Eritrea- Libyan Arab Jamahiriya - Gabon - MayotteCote d'Ivoire - Sao Tome and Principe - RwandaGhana South Central Africa - SeychellesNigeria - Angola - SomaliaSenegal - DRC - SudanRest of Western Africa Ethiopia Botswana- Benin Kenya Namibia- Burkina Faso Madagascar South Africa- Cape Verde Malawi South African Customs Union- Gambia Mauritius - Lesotho- Guinea Mozambique - Swaziland- Guinea-Bissau Tanzania United Republic of- Liberia Uganda- Mali Zambia- Mauritania Zimbabwe- Niger- Sierra Leone- Togo

Obtain Supply and Use Tables or even Input/Output Tables for African countries not available into the GTAP database

Commitment from Member States through the National Institutes of Statistics is critical on that respect

III. Main data requirements for trade-related statistics

Other key statistical data requirements (1/2):

More systematic data to characterize trade in Africa (intra-REC, intra-Africa, intra-industry)

Trade and protection in services (especially those related to trade: transportation, insurance, banking)

Informal trade

Trade and gender

III. Main data requirements for trade-related statistics – cont’d

Other key statistical data requirements (2/2):

Better trade facilitation measures and non-tariff barriers indicators

Employment/Unemployment

Exhaustive household surveys to capture social impacts (such as poverty implications) of trade policy reforms

Need commitment from Member States to sharing their data to enhance trade and regional integration analysis and monitoring.

III. Main data requirements for trade-related statistics – cont’d

Thank you!

Annex: MAcMap-HS6 database and TASTE

Utilization of a free software with user friendly interface: the Tariff Analytical and Simulation Tool for Economists (TASTE)

Average applied protection on African countries imports to the rest of the world

Average applied protection on African countries exports f rom the rest of the world

0% < applied tariff <= 5%5% < applied tariff <= 10%10% < applied tariff <= 15%applied tariff > 15%

Legend

Average applied protection imposed on African countries imports from the rest of the world

Average applied protection faced by African countries exports to the rest of the world

Remark: Tariff aggregation using reference group weights with GTAP scaling

Source: MAcMap-HS6v2 database