TRALAC - Trade Law Centre

Rich states alter WTO agenda – SA trade minister Davies

Tuesday, 29 November 2011

Source: Business Report (South Africa)

The debate between developed and developing countries over the way forward for global trade has taken a new turn. Trade and Industry Minister Rob Davies told journalists yesterday that advanced economies had shifted the focus off the World Trade Organisation’s (WTO’s) developmental agenda.

He was speaking during a consultative conference with representatives of labour and business in Boksburg, ahead of the eighth session of the WTO ministerial conference (MC8) in Geneva next month.

Davies identified two recent developments that are bedevilling negotiations.

One is that the advanced economies, burdened by debt, are arguing that the dynamic emerging markets, with their much stronger growth, should no longer expect the concessions allowed in the past to compensate for their developing status.

Davies countered that, given the relative size of advanced and emerging economies, this argument was not valid.

He said the major disadvantages developing countries still experienced was most evident in the agricultural trade regime. And he described reforms in this area as “the touchstone” for the Doha round of trade talks.

The second problem Davies identified is that advanced economies are introducing new issues to the agenda, including climate change and competition policy. South Africa and other emerging markets argue that, while these are important, the failure of the Doha round has left unfinished business – the Doha developmental agenda.

Davies said: “It is important that a Doha mandate guides the negotiating process and that we have a developmental outcome.”

Another accusation levelled by Davies was that the US had torpedoed an attempt earlier this year to put together a package to assist the least developed countries (LDCs) by demanding concessions in return from other WTO members.

The US embassy was unable to respond in time to meet Business Report’s deadline.

Peter Draper, a senior research fellow at the SA Institute of International Affairs, cautioned that the issues around the LDC package were complex. He said the US was “stalling” because it wanted to maintain its existing preferential schemes. These included the African Growth and Opportunity Act (Agoa) programme, which provides preferential access to imports from many African countries.

He pointed out that if Agoa fell away, South Africa’s neighbour Lesotho for instance would lose out. Its textile exports would face competition from countries like Bangladesh.

But he said the US and Europe had been calling for emerging economies to reduce their tariffs on industrial imports but had not been prepared to deliver on agricultural reforms in return.

Policies that protect and support US and European domestic farmers at the expense of their counterparts in developing countries have long been contentious. Though limited reforms have been made, they have not been enough to satisfy emerging market negotiators.

Draper said the debate was influenced by US domestic politics. “There is no way the (US President Barack) Obama administration could convince its trade union and other lobbies to accept the reforms.”

And he agreed with Davies that it “made no sense to enlarge the Doha round” at this point by introducing new issues. The Doha round of talks, which started in November 2001, has been on hold since 2008. And a conclusion is nowhere in sight.

Davies said there was a “high level of consensus on the issues” among business, labour and the government. And South Africa and other emerging markets would go to Geneva with “a clear message that the developmental mandate remains central and we need to deliver on it”.