THE WTO, SOUTH AFRICA AND THE DOHA

DEVELOPMENT AGENDA

Presentation to the Select Committee on Economic and

Foreign Affairs26 August 2003

PRESENTATION OUTLINE1. Brief introduction to the WTO

2. Context and background

3. South Africa’s objectives in Doha

4. Areas of negotiation and discussion

5. Implications of the Doha outcomes for South Africa

6. Challenges for South Africa

7. Opportunities for South Africa

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)

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

3. South Africa’s 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

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

4. Areas of substantive discussions with view to launch negotiations

• Trade and Investment

• Trade and Competition

• Transparency in Government Procurement

• Trade facilitation (CTG)

5. Implications of Doha outcomesIn 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;

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

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 S&CVMs address protectionism promote market access fair competition

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,

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

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

6. SA’s 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

6. SA’s 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

6. SA’s negotiating positions Cont.

6.4 On TRIPS & Public health• Chair’s 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

6. Challenges for South Africa• Preparing for and participating in a complex set of multi-

layered negotiations

• Developing SA’s ‘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

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)

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 S&DT– 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!