THE WTO, SOUTH AFRICA AND THE DOHA DEVELOPMENT AGENDA: THE WTO, SOUTH AFRICA AND THE DOHA DEVELOPMENT AGENDA Presentation to the Select Committee on Economic and Foreign Affairs 26 August 2003


PRESENTATION OUTLINE: PRESENTATION OUTLINE Brief introduction to the WTO Context and background South Africa’s objectives in Doha Areas of negotiation and discussion Implications of the Doha outcomes for South Africa Challenges for South Africa Opportunities for South Africa


1. Brief introduction to the WTO: 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: 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: 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: 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: 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 outcomes: 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;


5. Implications of Doha outcomes Cont.: 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.: 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.: 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.: 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: 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. 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. 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. 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: 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: 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: 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!


.: . KE A LEBOHA!