Please sir may I have some more’: Multinational enterprises and regional integration in an African context Abstract
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ConclusionThe Lesotho-South Africa garment value chain highlights the potentially significant impact which regional integration may have in impeding or promoting regional value chains. The Duty Credit Certificate played a vital role in sustaining the Lesotho clothing industry; while the duty-free market access which SACU provides was essential to enabling the benefits of proximity to be utilized by South African firms. Proximity has shown to be especially useful given the potentially relational nature of aspects of the value chain. On the other hand Regional integration has possibly impeded the expansion of the garment chain through overly restrictive rules of origin, non-tariff barriers, and preference erosion arising from harmful inter-state competition for clothing and textile FDI. The policy implications of this for governments, intra-state institutions, and private sector actors are several. Intra-state institutions such as SACU and SADC need to come up with consistent rules of origin with each other and coherent in and of themselves. Part of the decisions must involve an evaluation of the implications of aligning their ROO with AGOA’s and the EPAs. Ideally the decision should not be a capitulation to any short-term protectionist needs of individual states but based on a coherent and mutually agreed upon regional plan for the clothing and textile industry. An analysis by the SADC secretariat on the effects of national industrial policy on the erosion of final preference margins needs to take place. The results of this should inform the orientation of policy makers towards these issues, with an eye to making regional submissions on the issue once sufficient consensus has been reached. Further research is required to assess the optimality of the continuation of a DCC like scheme in the future for the garment industry or any other sectors identified by the secretariat as requiring intervention and coordination. The various costs and benefits as well the distribution of these need to be properly weighted before any conclusions are reached. For this to occur national governments need to garner consensus from their own constituencies on the role of regional industrial policy in policy making, as well as on the specific points which are being suggested for the industry. National governments need to refrain from engaging in harmful financial, fiscal, and regulatory competition for foot-lose capital and FDI and perhaps explore many of the useful recommendations made by the IFC at the World Bank on this matter.9As stated indirectly in the SADC model bilateral investment treaty (BIT) template, tax competition between states should be minimized. Private sector actors need to focus on upgrading production, investing in sustainable business practices, and working with governments and regional institutions to develop business models which are sustainable and competitive for the region. Business plays a vital role in engaging with government. Government in turn must have appropriate consultative forums where both business and labour can make submissions and recommendations to be integrated into national industrial policy and where necessary, recommended for discussion in regional forums. Intra-state institutions need to properly monitor and communicate with national governments on these issues. The case study of the West African cocoa value chain (UNCTAD, 2008) governed across Côte d’Ivoire, Ghana, and Nigeria by Archer Daniel Midland (ADM), Barry Callebaut, and a few other MNEs will be explored further in the final paper once company interviews have been completed. As illustrated here, there is significant potential for cross pollination between regional integration and value chain studies. In contrast to the European context, this demands a focus away from an emphasis on complex regionalism, and towards an attempt to understand the very basic country and regional preconditions required to engage successfully in regional integration at a more essential level. BibliographyAfDB (2013b). Regional Integration Activity Report. African Development Bank: Tunis (forthcoming). Balassa, B. (1961). The Theory of Economic Integration. Greenwood Press. Baldwin, R. (2012). “WTO 2.0: Global governance of supply-chain trade”, CEPR Policy Insight No.64, December. Baldwin, R and J Lopez-Gonzalez. (2013). “Supply-chain trade: A portrait of global patterns and several testable hypotheses”, NBER WP 18957. Bayoumi, T. and B. Eichengreen.(1992). “Shocking Aspects of Monetary Unification”, NBER Working Paper, No. 3949.
Dalberg. (2009). Franchising in Frontier Markets: What’s Working, What’s Not, and Why. Online: http://www.templeton.org/newsroom/in_the_news/docs/091215_frontiers_markets_summary.pdf Ernest and Young (2013). Ernst & Young's 2013 Attractiveness Survey: Africa. Financial Times (2013a). The fDi Report 2013: Global Greenfield investment trends. Fukunishi, T. and Ramiarison, H.A. (2011). ‘Export-Orientated Garment Industry in Madagascar: Implication of FDI to the Local Economy’, mimeo. Chiba: Institute of Developing Economies.
Gereffi, G. (1999). A commodity chains framework for analyzing global industries. Unpublished draft. Duke University. Gereffi, G., Humphrey, J. and Sturgeon, T. J. (2005). ‘The governance of global value chains’. Review of International Political Economy 12(1): 78-104.
Humphrey, J. and Schmitz, H. (2002). ‘How does insertion in global value chains affect upgrading in industrial clusters?’ Regional Studies 36(9): 1017-1027. Kaplinsky, R. and Morris, M. (2001). ‘A handbook for value chain research’. Online: http://asiandrivers.open.ac.uk/documents/Value_chain_Handbook_RKMM_Nov_2001.pdf Kaplinsky, R. and Morris, M. (2008). ‘Do the Asian drivers undermine export-oriented industrialization in SSA?’ World Development 36(2): 254-273. Kaplinsky, R. and Wamae, W. (2010). ‘The determinants of upgrading and value added in the African clothing sector: the contrasting experiences of Kenya and Madagascar’. Unpublished draft. Krüger, R. and Strauss, I. (2013). ‘Regional integration and foreign direct investment attractiveness in Africa’. Background note for the African Development Report 2013. African Development Bank (AfDB) Economic Research Department. Krugman, P. (1993). “Lessons of Massachusetts for EMU” in F. Torres and F. Giavazzi (eds.) Adjustment and Growth in the European Monetary Union, Cambridge University Press, New York.
Morris, M. and Reed, L. (2009). ‘Clothing and textiles’. In Kraak, A. (ed.), Sectors and Skills – The Need for Policy Alignment. London: HSRC Press. Munakata, N. (2004). Regionalization and Regionalism: The Process of Mutual Interaction. RIETI Discussion Paper Series 04-E-0060. Mundell, R. (1961). “A Theory of Optimum Currency Areas”, American Economic Review, pp. 657-665. OECD. (2008). Guidelines for Multinational Enterprises. OECD. Online: http://www.oecd.org/corporate/mne/1922428.pdf Orbis. (2013). Orbis Database. Online: http://www.bvdinfo.com/en-gb/products/company-information/international/orbis-%281%29 Oya, C. (2012). ‘Contract Farming in Sub-Saharan Africa: A survey of approaches, debates and issues’, Journal of Agrarian Change 12: 1–33. Overseas Development Institute (ODI). (2013). Supporting African Value Chains: How they can be used to help develop countries and increase intra-African trade. By Stevens, C., Keane,J., and Kennan, J. Porter, M.E. (1985). Competitive Advantage: Creating and sustaining superior performance. New York: The Free Press
SACU. (2013). Study to develop a SAC position on the SADC rules of origin for trade in textile and clothing products. Tender proposal. Shoprite. (2013). Shoprite Holding Ltd South Africa. Company Website: http://www.shoprite.co.za/Pages/home.aspx. Staritz, C. and Morris, M. (2013). ‘Local embeddedness, upgrading and skill development: global value chains and foreign direct investment in Lesotho’s apparel industry’. Capturing the Gains 2013. Working Paper 20. Staritz, C. and Morris, M. (2013b). ‘Local embeddedness and economic and social upgrading in Madagascar’s export apparel industry’. Capturing the Gains 2013. Working Paper 21. Sturgeon, T.J. (2008). ‘From Commodity Chains to Value Chains: Interdisciplinary theory building in an age of globalization’. MIT Industrial Performance Center Working Paper Series. Tax Justice Network-Africa & ActionAid International. (2012). Tax competition in East Africa: A race to the bottom? Online: http://www.actionaid.org/sites/files/actionaid/eac_report.pdf Te Velde, D. W. and Bezemer,D. (2006). Regional Integration and Foreign Direct Investment in Developing Countries. Online: http://unctad.org/en/docs/iteiit20062a3_en.pdf. USAID. (2011). Technical Report: SADC Rules of Origin in Textiles and Apparel: Review and Policy Options. Iwanow,T. Southern Africa Trade Hub. UNCTAD. (2008). Cocoa Study: Industry Structures and Competition. Geneva: United Nations Conference on Trade and Development (http://r0.unctad.org/infocomm/comm_docs/docs/official/ditccom20081.en.pdf). UNCTAD. (2011). World Investment Report 2011: Non-Equity Modes of Production and Development. Geneva: United Nations Conference on Trade and Development (http://www.unctad-docs.org/files/UNCTAD-WIR2011-Full-en.pdf). UNCTAD. (2012). ‘Towards a New Generation of Investment Policies’. World Investment Report 2012. Geneva: UNCTAD. UNCTAD. (2013). World Investment Report 2013: Global value chains: investment and trade for development. Geneva: United Nations Conference on Trade and Development (http://unctad.org/en/PublicationsLibrary/wir2013_en.pdf ). UNCTAD. (2013b). ‘Foreign direct investment to Africa increases, defying global trend for 2012’. Press Release. Online: http://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=136 UNCTAD. (2013c). ‘Foreign direct investment to Africa increases, defying global trend for 2012’. Press Release. Online: http://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=136 UNIDO & UNCTAD. (2011). ‘Fostering Industrial Development in Africa in the New Global Economic Environment’. Economic Development in Africa Report 2011. Geneva: UNCTAD & UNIDO. University of Pretoria. (2008). Agribusiness linkages in the Southern African region: Small farmer participation. Policy Brief 2. Online: http://web.up.ac.za/sitefiles/file/48/2052/3_%20Agribusiness%20Linkages%20in%20SADC.pdf Vink et al. (2006). ‘Promoting Agricultural Trade and Investment Synergies between South Africa and other SADC Member Countries’. Tralac Working Paper No 20/2006. Wolf, M. (2013). ‘Why China Won’t Buy the World’. Financial Times. July 9 2013. Online: http://www.ft.com/intl/cms/s/0/28d1a4a8-e7ba-11e2-babb-00144feabdc0.html#axzz2dNN8uOX0 World Trade Organisation. (2013). International Trade Statistics 2012. Online: http://www.wto.org/english/res_e/statis_e/its2012_e/its12_toc_e.htm AppendixT  able 9: Shoprite outlets, stores, and services by country and brand, 2012
Source: Shoprite (2013) 1 They were never referred to as ‘stages’ by Balassa. 2 Based on company interviews. 3 This consists of all the franchised units and united managed by the franchisor itself that operate under the same banner and business format, for example the KFC franchise system. 4 Shoprite includes: Shoprite, Checkers, Usave, OK Furniture, OK Power Express, House & Home, Hungry Lion, OK Franchise. 5 Interviews with Freshmark, Shoprites fruit and vegetable first tier supplier. 6 Based on Financial Times fDi data on the number of Greenfield FDI projects. 7 Data to be updated for final draft paper. 8 Data to be updated for final draft paper. 9 See for example: James, S. (2009). Incentives and Investments: Evidence and Policy Implications. World Bank. Directory: uploads uploads -> 587 Return function, r i(X) r i(0) r i(1) r i(2) r i(3) 1 0 2 4 6 Thermal Station, I 2 0 1 5 6 3 0 3 5 6 10 uploads -> Department of science and humanities department of mathematics part-a questions and answers uploads -> The Case Against the nypd’s Quota-Driven ‘Broken Windows’ Policing What Is It? uploads -> For want of a nail uploads -> Ownership Models There are two different types of ownership models uploads -> Police Militarization uploads -> City of rising star regular meting thursday, july 14, 2016 uploads -> Township of winfield uploads -> Stop Militarizing Law Enforcement Act of 2014 uploads -> The Black Panther Party’s Ten-Point Program What We Want Now! Download 113.62 Kb. Share with your friends:
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