No hope for Doha this year: Davies

1 June 2011

The stalled Doha round of trade negotiations is “in intensive care” and won’t be concluded this year, although a plan B to support trade to least developed countries is on the cards, Trade and Industry Minister Rob Davies said on Monday.

Addressing a media briefing in Pretoria on Monday ahead of a meeting of the World Trade Organisation (WTO) trade negotiation committee in Geneva on Tuesday, Davies said that although the bulk of WTO members were not willing to declare Doha dead, the view was that it is “in intensive care.”

He added that South Africa would be a net-payer and not net beneficiary if the current Doha round were to go ahead, and that at a recent WTO ministerial meeting in Paris last week, members had decided not to set a time limit on the current Doha round.

Davies said at the beginning of the year that 2011 had been defined as a “window of opportunity” to conclude the Doha round, but that this now looked unlikely, given that the year was halfway through.

Smaller ‘plan B’ package mooted

He said there was a sense among WTO members that carrying on as normal wouldn’t work, adding that trade ministers at a ministerial conference in December last year had mooted a plan B, part of which could be delivered by the end of the year.

This would be an attempt to deliver results in a “smaller package”, but would leave out more controversial trade measures such as agriculture, services and industrial tariffs.

The smaller package would include trade facilitation measures such as customs co-operation, as well as measures in export competition in agriculture, non-tariff barriers in industrial tariffs, rules about regional trade agreements and fishing subsidies, Davies said.

The primary focus would be to deliver trade benefits to countries from the least developed world, he said, adding that these had been promised for delivery in 2008, but had yet to come about.

This would take the shape of some form of duty-free access into economies of the developed world, such as a package of aid for trade, assisting in particular cotton growers in countries of the Sahel region, such as Burkina Faso and Chad.

He said there was a perception from some WTO members that large developing nations such as India, Brazil, China as well as South Africa, should no longer be referred to as developing countries.

But Davies said this was “not factual” and that even though some countries have had good gross domestic product (GDP) growth, they were effectively still developing nations.

The so-called Swiss formula

He said the most recent approach to the Doha trade round was the use of the so-called Swiss formula, where countries affected cuts in tariffs on products, line-by-line.

But he said what was proposed by the WTO on April 21 was not enough.

The idea was that after these formula cuts had been made, further cuts would be then made in the form of “sectorals” – which South Africa has viewed as voluntary cuts.

But Davies, who indicated that South Africa would not be participating in any sectorals, pointed out that other WTO members had argued that unless the organisation made it compulsory for all members to make tariff cuts quid-pro-quota, there was no point in having sectorals.

African free trade area

South Africa, he said, would rather focus on deepening trade on the African continent and by doing so, help to open up trade to more least-developed countries.

The conclusion of a grand free trade area between the Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (Comesa) and the East African Community (EAC) would go some way to achieving this, Davies said, especially as the three communities had a combined gross domestic product of $833-billion (R5.7-trillion) and a combined population of 530-million.

The three regional economic communities will hold a meeting in South Africa in less than two weeks’ time.

South Africa’s membership of the Brazil, Russia, India, China, South Africa (BRICS) grouping also offered the African country “huge opportunities” to develop itself along a different pattern of relationships, Davies said.

He said though he believes a multilateral trade system would not disappear any time soon, he believed the world was perhaps not ready at this stage to deliver a multilateral developmental round.

Source: BuaNews