*{The New Trade Round - Leveraging International Trade Agreements [http://www.weforum.org/site/knowledgenavigator.nsf/Content/The%20New%20Trade%20Round%20-%20Leveraging%20%20International%20Trade%20Agreements?open&topic_id=300350000&theme_id=300]

            07.06.2001

            Southern Africa Economic Summit 2001}

            The realities for Southern Africa and the continent as a whole are straightforward, Cedric M. L. Savage, Executive Chairman, The Tongaat-Hulett Group, South Africa, told the plenary session on leveraging international trade agreements. In 2000, world trade grew by 12%. This year, in the face of economic slowdown, it is growing by 7%. At the same time Africa’s GDP growth is only 3-4%.

            The logic of that, Savage said, is that Africa could increase its GDP growth through exports, but success depends on access to world markets. This, in turn, will depend on the countries of the sub-region getting the best possible results from the coming multilateral round of WTO talks in Doha.

            J. Denis Bélisle, Executive Director, International Trade Centre UNCTAD/WTO (ITC), Geneva, pointed out that free trade proponents are hoping that the WTO will launch a new round of multilateral negotiations at Doha. Members are already engaged in implementing agreements on agricultural products and services from the Uruguay round. But if Southern Africa wishes to promote its agendas, the region’s countries cannot delay preparation of their combined agendas.

            Favourable regional trade agreements alone are insufficient. Three additional requirements for success are:
            consistently putting the sub-regions business capacities to work;
            refining regional and national export strategies on the basis not only of what the region can do best, but also on the basis of world demand for imported goods;
            harnessing public and private sector partnerships around export strategies.
            These three tracks, Bélisle believed, would allow Southern Africa to emerge from the next WTO round in better export shape and ensure lasting benefits.

            Alec Erwin, Minister of Trade and Industry of South Africa, was in full agreement with Savage and Bélisle. But he pointed out that while agreements to continue talks on agriculture and services remain a “built-in agenda” from Marrakech, progress is “non-existent”. Should Southern Africa try to extend the Doha agenda?, Erwin asked. If not, only existing agenda items would be discussed. And an emphasis on developmental needs of the developing world has to be introduced.

            Southern Africa cannot afford to be locked out of any agreements, for example the Free Trade Agreement of the Americas. Nor can it afford regression to the complex and multitudinous agreements that developed under GATT. The developmental approach has to extend to issues such as persuading the EU to reduce its current US$ 315 billion annual level of agricultural subsidies, subsidies that help support inefficient sugar beet production to the detriment of efficient sugar cane production in Southern Africa.

            A joint approach with other developing countries such as Brazil, Egypt and India seems to offer the best approach to winning the developing world’s demands at the next WTO inter-ministerial meeting, Erwin concluded.

            Niall FitzGerald, Co-Chairman, Unilever, United Kingdom, was in broad agreement. He pointed out that while countries with developing and transitional economies make up four-fifths of the WTO membership, they receive nowhere near four-fifths of its attention. 

            Sub-Saharan countries suffer an annual trade loss of US$ 20 billion because of tariff and quota barriers. And this is US$ 6 billion more than those countries receive in aid from those that discriminate against them. Adding colour to his thesis, FitzGerald put forward the fact that the European dairy herd receives a daily support of $1 per cow. This is equal to the $1 daily income of each of the one billion people in the world’s poorest countries.

            Distorting trade regimes in the EU, US and Japan continue to restrict developing countries to a low level in the production chain. However, FitzGerald said the developed world is ready to listen to the developing world’s point of view.

            Responding to a question from Caroline Southey, Editor of Financial Mail, South Africa, FitzGerald defended his position. He pointed out that developed countries are increasingly aware of the economic realities that 85% of the world’s people live in the developing countries and that 60-70% of the world’s GDP growth over the next 15 years would come from these countries. He added that there is also an intense debate taking place within the EU over the gross stupidity of agricultural policies in the light of the BSE and foot and mouth outbreaks. This is particularly so in Germany, which country will be crucial in determining any shafts in the EU’s Common Agricultural Policy.

            Also responding to a question, Erwin cautioned that trade negotiations are intensely political events. Unless Southern Africa has something to offer, American and European governments will find it difficult to sell trade liberalization to their voters. He suggested that environmental or labour issues might be introduced, issues that are central concerns of major political constituencies in the US and EU.

            David W. Hasluck, Director of the Commercial Farmers Union of Zimbabwe, questioned whether Southern Africa should wait until it has developed capacity before entering into WTO talks. Erwin responded by pointing out that South Africa’s bilateral trade talks with the EU had given a wake-up call. Since then, South Africa has developed significant trade expertise, with experts now located throughout government as far as the president’s office. He remains convinced that Southern Africa and the rest of the developing world cannot risk avoiding participation in the next WTO round. South Africa’s own interests dictate that it should participate vigorously in Doha even if other countries from the sub-region were not there.                  

                  *{Contributors:       Bélisle J. Denis
                  Erwin Alec
                  FitzGerald Niall
                  Savage Cedric M. L.}