Business Day (Johannesburg)

Africa: Scant Reward for Poor Countries' Efforts At Trade Talks in Hong Kong

Johannesburg — SA had gained "a bit more" from the World Trade Organisation (WTO) meeting in Hong Kong in December than it expected, said the country's chief negotiator yesterday.

The European Union's (EU) commitment in Hong Kong to eliminate export subsidies on farm products was no great feat as the EU had already planned to do this internally, said Xavier Carim.

But the date was now a commitment within the WTO, said Carim.

He was speaking at an Institute for Global Dialogue briefing on the Hong Kong event, where trade ministers from the WTO's 149 member countries met to advance efforts towards a new world trade pact.

Developing countries had also resisted substantial pressure by rich countries to make substantial concessions in terms of further opening their markets to industrial goods and services.

A number of these countries, including SA, India, Brazil, China, Egypt and Venezuela, formed a new grouping, Nama-11, to block rich countries' progress on opening developing markets for industrial goods in the absence of progress on agriculture issues.

It is now documented that the level of ambition in industrial goods talks depends on the level of ambition in agricultural market access.

Developing countries had also averted attempts by rich countries to change the structure of negotiations in Hong Kong to place greater emphasis on services, said Carim.

Better access to poor countries' services markets was important for rich industrialised countries, which typically comprised about 80% of services, he said.

Developing countries managed, for example, to tone down wording documenting their commitment to opening services markets from "shall" to "will consider", said Carim.

Carim said that while SA and some other developing countries had gained more from Hong Kong than they expected, expectations of what could be achieved in Hong Kong had sunk to "unambitious levels" by October, based on the lack of progress in the run-up to the meeting.

Some trade analysts in SA were not convinced of better-than-expected gains for developing countries in Hong Kong.

Institute for Global Dialogue senior researcher Michelle Pressend said many felt Hong Kong was a step back, with poor countries still expected to make "hard concessions" in the areas of services and industrial goods.

International trade commentator Peter Draper, of the South African Institute of International Affairs, said the EU's commitment to eliminate agricultural export subsidies by 2013 was "hardly a concession" and was based on conditions.

Dot Keet, of the Alternative Information and Development Centre, warned that SA and other developing countries would now face more pressure than before to open their markets for industrial goods and services from rich countries.

She said, however, that developing countries should not aim to meet rich countries on middle ground. The vast support that rich countries provided to farmers was "illegal, immoral and unsustainable," said Keet. "They are wrong, we should not comprise," she said.

Developing countries should not have to reduce their tariffs, she said.

SA is unlikely to be required to lower tariffs on industrial goods imports substantially, as it was already substantially ahead of its commitments made to the WTO.

SA was allowed to have an average of about 17% on industrial goods, whereas the average tariff was about 7% at the moment. This was substantially below the average of 20% in 1990, Carim said.

Meanwhile, SA's chief negotiator is not confident that the next interim deadline of April to thrash out details on issues such as industrial goods tariffs would be met in order to complete the talks by the new deadline of "around" year end.

But he said it was "not a foregone conclusion" that there would not be progress by April, he said.

WTO director-general Pascal Lamy and European trade commissioner Peter Mandelson are expected to report on progress in the Doha round of talks when they address a meeting of the Institute of International Affairs at Wits University tomorrow.


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