THE WTO, SOUTH AFRICA AND THE DOHA DEVELOPMENT AGENDA

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THE WTO, SOUTH AFRICA AND THE DOHA DEVELOPMENT
AGENDA

• Presentation to the Select Committee on Economic
  and Foreign Affairs
• 26 August 2003

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PRESENTATION OUTLINE

• Brief introduction to the WTO
• Context and background
• South Africas objectives in Doha
• Areas of negotiation and discussion
• Implications of the Doha outcomes for South
  Africa
• Challenges for South Africa
• Opportunities for South Africa

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1. Brief introduction to the WTO

• Established 1 January 1995 as successor to the
  GATT
• Deals with the rules of trade between nations
• Three main purposes
• To help trade flow as freely as possible
• To serve as a forum for trade negotiations
• To settle trade disputes
• The main principles
• Trade without discrimination (MFN, NT)
• Barriers to come down through negotiations
• System should be predictable (rules-based)
• Trading system should be more competitive (by
  discouraging unfair practices (e.g. export
  subsidies and dumping)

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2. Context and background

• Addressing the legacies of apartheid
• Uneven development
• Skewed ownership/income patterns
• Appalling poverty in its many ugly faces
• Unemployment
• Job creation
• Attracting investment
• Market access
• Improving competitiveness
• Economic growth

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3. South Africas objectives in Doha

• To ensure that developmental issues are at the
  centre of WTO agenda and the MTS
• To address the imbalances in existing WTO
  agreements
• To strengthen the rules-based MTS vs
  Unilateralism
• To reduce protectionism against products of
  exports interest to SA and other developing
  countries, esp. in agriculture
• To ensure meaningful African participation

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4. Areas of negotiation

• Between 2001 and 2005
• Agriculture
• Implementation of existing WTO obligations
• Services (more than 10 sectors)
• Industrial Tariffs
• TRIPS
• Anti-dumping
• Subsidies (incl. Fisheries subsidies) CVDs
• Relationship btwn RTAs and the WTO
• Dispute Settlement
• Trade and Environment

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4. Areas of substantive discussions with view to
launch negotiations

• Trade and Investment
• Trade and Competition
• Transparency in Government Procurement
• Trade facilitation (CTG)

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5. Implications of Doha outcomes

• In agriculture
• This is a grandfather sector in developed
  countries
• Agreement on comprehensive negotiations aimed at
• substantial improvements in market access
• reduction and eventual phasing out of export
  subsidies
• substantial reductions in trade-distorting
  domestic support
• Implications
• break EU CAP
• unlock developing country potential and
  comparative advantage
• market access opportunities

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5. Implications of Doha outcomes Cont.

• In intellectual property rights and public
  health
• TRIPS Agreement does/should not prevent members
  from taking measures to protect public health
• TRIPS Agreement should support the right of
  countries to protect public health
• To promote access to medicines for all
  (compulsory licensing)
• Implications
• strengthen govt. hand to address public health
  issues
• access to medicines for all

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5. Implications of Doha outcomes Cont.

• Antidumping and other rules
• Agreement to clarify and improve disciplines
  (antidumping, subsidies countervailing
  measures)
• Identify trade distorting practices
• Clarify and improve disciplines on fisheries
  subsidies
• Implications
• Scope to address the abuse of AD and SCVMs
• address protectionism
• promote market access
• fair competition

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5. Implications of Doha outcomes Cont.

• Industrial tariffs
• Agreement to reduce/ eliminate tariff peaks,
  tariff escalation, high tariffs, and NTBs
• Market access particularly for DC exports
• Implications
• address protectionism
• open markets for DC exports
• unlock comparative advantage of SA and other DCs
  
• positive spin-offs on job creation, economic
  diversification, product beneficiation,

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5. Implications of Doha outcomes Cont.

• Services
• Negotiations to be conducted with a view to
  promoting economic growth and development
• Implications
• further liberalisation
• focus on developmental issues
• support economic growth of DCs and LDCs
• market access opportunities for DC services

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6. SA preparatory process

• Two-staged preparatory process
• Domestic consultations with stakeholders, incl.
• Various government departments
• Parliament
• Labour
• Business
• NEDLAC
• Service providers/regulators, etc
• Actual negotiations in WTO Bodies, e.g.
• TRIPS and public health
• Industrial tariffs
• Agriculture

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6. SAs negotiating positions

• 6.1 On rules, e.g.
• Cumulation rules to be addressed
• Negligible margins to be raised
• 6.2 On services
• SA received requests from many countries,
• Mining, engineering construction, telecoms,
  health, education, architecture, insurance, etc
• SA has developed requests to other countries
• Mining engineering, communications, energy,
  financial, etc

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6. SAs negotiating positions Cont.

• 6.3 On agriculture, e.g.
• Domestic support
• Fully support development of historically
  disadvantaged farmers, rural farming
  communities
• Support commercial farmers thru non-distorting
  measures
• Substantial market access for agric products of
  export interest/potential to SA
• Improve fair trade conditions for agric products

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6. SAs negotiating positions Cont.

• 6.4 On TRIPS Public health
• Chairs text of 16 Dec 2002 as basis for
  consensus
• No limitation on scope of diseases
• Members to be allowed the flexibility to decide
  for themselves the grounds for granting
  compulsory licenses
• Domestic market to also include the regional
  market
• 6.5 On geographical indications
• Voluntary system of registration
• No extension of protection to other products

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6. Challenges for South Africa

• Preparing for and participating in a complex set
  of multi-layered negotiations
• Developing SAs negotiating positions thru
  effective consultations with all relevant
  stakeholders
• Providing leadership
• Building coalitions
• Defining what development agenda means in
  hardcore negotiations (NEPAD?)
• Capacity (human institutional) constraints

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7. Opportunities for South Africa

• Relative strength/health of the economy
• Sufficiently developed institutions with memory
• Availability of expertise/ skills
• Better understanding of WTO in govt. and social
  partners
• Position of leadership
• Relative clarity of policy and policy framework
  (e.g. SAGES, NEPAD)

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Road to Cancun

• 5th Ministerial Conference, Cancun, 10-14
  September 2003
• Midterm review
• Take stock of developments to date
• Ministers to provide guidance
• Draft Ministerial Text is out (24 August 2003)
• Very ambitious on investment, competition,
  transparency in government procurement, and trade
  facilitation
• Accelerated progress on services
• Ambitious tariff cuts on industrial products
• Non-committal on SDT
• Offers the recent EU-US deal on agriculture as
  the deal
• Cancun meeting is going to be very tough!

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• KE A LEBOHA!