Technical, tactical and strategic challenges facing the South African government in the multilateral trade system and in relation to the WTO
This strategy paper and urgent policy intervention is based on various engagements with SA policy-makers and strategic analysts in the specific circumstances of the lead-up to the Sixth WTO Ministerial Conference in Hong Kong, 13-18 December 2005.
Faced with questions and critical analyses by independent non-governmental analysts with regard to the general approach and specific positions adopted by the South African government in this country's external trade relations and negotiations, overburdened trade officials in the Department of Trade (DTI) are known to reply that they are "merely doing their jobs as trade negotiators". Some respond defensively that they are "simply technical personnel" focusing on the immediate legal or practical trade issues at hand, and that they are not responsible for the broader economic and political dimensions and strategic frameworks for SA's international trade relations.
Whereas, of course, no analyses are neutral and 'merely technical'. Nor are they formulated in intellectual/theoretical vacuums. South African 'technical' officials at all levels regularly make what are political statements in their public presentations and arguments about the international trade system and the global economy. And these arguments are - consciously or not - based on certain theoretical assumptions and specific political interpretations and judgments … but presented as self-evident facts. Furthermore, these legal and technical trade experts undoubtedly provide such assessments and related recommendations to the higher strategy levels of trade planning and broader economic policy-making.
The (sometimes exaggerated) 'complexities' of trade issues and the 'extreme delicacy' of trade negotiations - and the dependence of politicians on the information of their technical experts - make the political judgments and theoretical positions of these technical advisors particularly significant. Thus, in any discussion of South Africa's trade policies, all theoretical assumptions and political judgments need to be put on the table and critically interrogated. In the current processes of the lead up to the 6th WTO Ministerial in Hong Kong the following are key.
1. Merely 'technical' and simply 'trade' negotiations ?
As all trade officials and negotiators know full well, trade negotiations are not simply technical/legal processes. They are certainly complex combinations and interpretations of technical details and legal terms, together with the presentation and interpretation of trade and other economic data marshaled by both sides. And these are all deployed as skillful bargaining 'ammunition' within shifting negotiating tactics. But 'trade' negotiations are seldom, if ever, solely about straight commercial relations; the exchange of goods, the lowering of tariffs, the 'opening of markets' etc. Trade negotiations are highly charged processes driven also by broader economic aims and national strategic interests.
- On the economic front, international trade agreements are increasingly designed to include 'trade-related' matters such as investment terms, property guarantees and intellectual property rights, access to government procurement and to the privatisation of public assets, and many other crucial and even highly sensitive areas of all national economies.
- On the political front, developing country governments know to their chagrin how the more powerful governments employ not only financial and economic levers but also political power plays (and even psychological ploys), directly and indirectly, overtly and covertly, within and around the formal negotiations, including skillful media and public relations campaigns.
It is necessary to underscore these points in order to put term to any suggestions, by our side or others', that trade negotiations basically involve the tabling of the respective countries' views and proposals, and are somehow objective and diplomatic - if occasionally tense - discussions. These supposedly aim for mutually acceptable aims to secure fair outcomes and 'win-win scenarios' between so-called trade 'partners' …. or, to put it more accurately, adversaries. (1)
Even the purportedly 'mutually beneficial' relations and negotiations between relatively more cooperative partners - for example between South Africa and its fellow members in SACU and SADC - are shot through with demands and defenses, claims and counter-claims, self-serving positioning and self-justifying arguments. All 'trade' negotiations are highly charged political processes.
2. Trade negotiations before and without - or within - economic strategies?
Despite the necessity to be highly technically skilled and mentally agile, trade negotiators on the front line cannot conduct their engagements on the basis of mere tactical responses to immediate negotiating demands, or in terms of narrowly defined trade needs. To respond effectively to the strategic aims of trade 'partners', national trade negotiations and policies have to be located within a consciously worked out and comprehensive strategic trade framework. This, in turn, has to be based on assessments of the relative weight or role of external trade in relation to each national economic sector and to the totality of broader national economic aims.
Too often, in South Africa, narrowly conceived trade aims - the practical trade needs of specific sectors, or even very specific export interests - are made the basis and main drivers of this countries' trade strategies and negotiations; rather than these being based on and driven by broader and clearly formulated sectoral and national industrial developmental needs and aims. The current pragmatic and rather as hoc approach - before the formulation of framework(s) of clearly defined sectoral and national industrial and agro-industrial development and broader economic diversification strategies - is particularly questionable in the context of South Africa's engagement in WTO negotiations on the General Agreement on Trade in Services (GATS) and the so-called Non-Agricultural Market Access (NAMA) negotiations. The latter will affect not only the manufacturing sector but also the mining, foresty, fisheries and any other national sectors that don't fall directly under agriculture.
Trade policies have also to be made on the basis of clear theoretical interrogation of the role of trade per se. The problem is that, in this historical phase, the dominant notions about the nature and the role of trade are articulated within neo-liberal theory and promoted in the neo-liberal trade paradigm and through powerful neo-liberal institutions, above all the WTO. And this paradigm (still) holds a determinant position in much South African economic policy formulation, even though this theoretical model is rapidly losing credibility nationally and internationally under the impact of accumulated contrary evidence and effective national and international critiques; with the consequent erosion of the tenability of simplistic claims about the 'export-driven growth' model. Clearly, South Africa should also draw on - and contribute to - the important theoretical debates and paradigmatic challenges unfolding internationally. (2) South Africa's 'trade' strategies have to be formulated and located within a more innovative analysis of the respective and interactive roles, the relative weight, and the complex relationship of external trade to the development and diversification of internal productive capacities, and other urgent economic (employment creation), social (poverty eradication) and environmental (sustainability) imperatives within this country.
The fundamental question is not whether external trade 'creates' or purportedly 'drives' economic development. Rather the fundamental reality and practical challenges reside in the fact that it is internal economic development and productive, technological, infrastructural and institutional capacities that make for effective external trade. (3) Under appropriate policy/political and practical/physical national conditions and (less prejudicial) international conditionalities and circumstances, external trade can act as a stimulus to the improvement of internal production forces and related factors. But it is all these internal conditions and capacities that are primary and fundamental, both in themselves and as the basis of effective external trade.
Conversely, external trade has to be evaluated and promoted in the context of - and to the degree that it is important or relevant to - internal economic, social, environmental and cultural aims and needs. Trade, as is now increasingly argued and demonstrated by authoritative analysts (4) has to be a means to other wider, varied and more fundamental aims and ends. Trade cannot be dealt with as an aim and end in itself, from which quantitative 'growth' is presumed to follow and which, in turn, is assumed will produce development…... eventually.
3. Political judgments and choices as 'objective imperatives' ?
At the same time, fundamental though it is, the overall national policy framework within which the South African government should formulate and carry out its trade strategies cannot be based only on national economic, social and environmental policies, and the above national/internal factors. Such national development strategies have also to be located within and related to international forces and factors. However, these in turn, are not 'self-evident' economic factors and 'objective' forces. 'Trade' and economic strategies have to be based many broader international economic assessments and on political judgments about them.
Thus, while strategic policy-making has to deal with the balance of political and economic forces within this country, it has also to be undertaken in the context of South Africa' s external economic and political relations. And the positions adopted and the strategies pursued must be based on consciously made, coherent and comprehensive assessments of the international balance of forces in the current historical conjuncture, about the state of the global economy, about the very nature of globalisation etc.
Until recently, government policy makers were prone to speak about the necessity to 'recognise the realities' of globalisation; the sub-text being - and often the explicit injunction - being that South Africa had 'realistically' to accommodate to this 'reality'. More recently, some high-level SA government spokespersons have begun, in some measure, to publicly question global theorists' claims about the unparalleled and unquestionable benefits of the integration of all countries and all their economic sectors into one open global economy. (5)
The economically uneven, socially and economically polarising and environmentally damaging effects of extensively unregulated corporate operations, and their global expansion and penetration into all economies and all economic, environmental and social sectors, are now producing fundamental challenges to the currently dominant global paradigm and these global forces. There are even various de facto but untrumpeted departures from global orthodoxies within some developed countries. (6) Both internal trade strategy debates and economic policy formulations in South Africa, and the government's international political role and interventions have to draw on and contribute much more or much more directly to these significant paradigmatic debates and changes underway.
More specifically, with regard to South Africa's external trade strategies, SA trade officials have to locate their planning within a host of political judgments, and undertake thoroughgoing economic and political assessments, such as
- Is the US economy as strong as it is perceived to be? Or is it actually dangerously imbalanced and a potentially destabilising factor in the global economy? If so, what can/should be done about this ?
- In this light, should South Africa be reinforcing its trade orientations towards the US (7), or towards the EU ? Or towards the EU per se, independently of what is happening or might happen in the US ? And if so, within what national or regional frameworks?
- Or should SA be refocusing and redirecting its trade strategy (ever) more towards the South, and especially towards the rapidly expanding 'emerging' economic powers, China, India and Brazil? And, if so, under what terms and conditions?
- Or should SA be diversifying its trade orientations and relations (even) more widely towards Africa, where it has both comparative and competitive advantages? If so, within what policy frameworks and agreements?
- Or should South Africa be re-orientating selected sectors of its production towards its own domestic markets, …..and actually reduce its (excessive) external trade orientation and international exposure?
- Or should South Africa's trade-and-development strategy be a skillful coordination and combination of various or all of the above? And, if so, with what respective weight(s) and emphases?
The above questions do not purport to be a comprehensive survey of the kind of political and policy challenges facing South African trade-and-economic policy analysts. Such questions are noted simply to illustrate the complexity of the kind of options they face and the difficult strategic assessments that South African trade policy-makers are having to make.
The fundamental point is that both SA's bilateral and regional trade negotiations and its positioning in multilateral trade negotiations do not take place in a political vacuum. They are located within challenging and changing economic and political perspectives …and differing interpretations of these. Such political interpretations may be consciously made or not, coherently formulated or otherwise, based on 'self-evident truths' or questionable judgments …. or on the basis of emerging and more questioning insights. Furthermore, trade policy analyses have also to consciously interrogate a number of other policy positions and political assumptions still informing SA trade analysis and policy development; for example - in the context of this present paper - on the supposed nature of the 'multilateral trade system'.
4. The Multilateral Trade System (MTS) as an essential 'given' ?
A broad and commonly articulated assumption amongst South African government trade officials and institutional trade 'experts' - and the business press - is that we have to shape and orientate our policies to maximise our gains or opportunities in the 'multilateral trade system'. This entails getting 'improved market access' into other countries, and especially the rich markets of the North. For most developing countries such opening-up has been accompanied by the enforced opening up of their own markets, in return, and the (re)inforced heavy external orientation of their economies on the basis of the 'export-led growth' model.
This model has been 'autonomously' implemented in SA over the past decade - with increasingly questionable effects upon the broader production economy, on internal policy decisions, on employment generation and on tackling the growing poverty in this country; which have all been complicated and exacerbated by these trade policies. Yet SA trade officials, and others, continue to refer routinely to South Africa's commitment to 'the multilateral trade system' as if it is a self-evident fact and almost an objective and largely immutable given.
In this way, rather than subjecting the MTS to rigorous interrogation, and rather than producing creative innovations as part of new strategic thinking, South Africa could find itself merely operating pragmatically within the status quo. This entails focusing on trying to promote its 'offensive trade interests' in both the North and the South, finding its own export niches with specific products in specific markets, furthering its competitive trade 'opportunities', and pursuing the reduction of external trade barriers etc. Whereas, SA should be prioritising the necessity to challenge and change a system which,
- is based on questionable theoretical notions and trade frameworks deliberately structured to serve the aims and interests of the more developed economies and their companies, as reflected in the biased and imbalanced current multilateral trade agreements; while
- at the same time, this system of 'rules' is characterised by the tendentious utilisation, evasion, or opportunistic adjustment of these very rules, and even their driving 'theories' (or rationalisations), as and where required by the more powerful countries and corporate interests.
Despite growing public awareness worldwide of these highly questionable features and negative effects of the MTS, the pragmatic argument put forward by SA trade officials, and many neo-liberal analysts, is that South Africa and all developing countries must, nonetheless, operate with due caution and must carefully nurture the current multilateral system of trade agreements. The argument goes that 'without the MTS, the situation would be even worse', and therefore we have to ensure that we take up issues in such a - gradual or accommodating - way as to ensure that the majors are kept within the game and do not withdraw away from the MTS altogether. If this were to happen, the argument goes:
- the developing countries would be picked off, one by one, by the powerful countries and subject to even more disadvantageous bilateral and regional agreements; and/or
- the weaker countries of the world would be exposed to unilateral trade discriminations and overt and covert pressures and threats by powerful governments, as in the past; and/or
- the world could descend into a new mercantilism or trade wars, a global free-for-all and even economic 'anarchy'.
Even without the last threatening scenario - which defenders of the status quo often deploy in their negotiating arsenals - there is much justification for the other fears. However, these threats and active pressures by the major powers are not new, are not some future threat should the current multilateral negotiations stall or the WTO be challenged and changed. Despite the intemperate threat to developing countries by the US Trade Representitve Zoelick, in Cancún 2003, that henceforth the US would deal with them bilaterally (8) - the fact is that the US and EU have always utilised their own geo-strategic approaches. They follow both differing and similar approaches to selected countries as they judge necessary. Both the EU and the US have recourse to their own unilateral GSP (Generalised System of Preferences) offers to specific countries. Both of them have their own unilaterally-devised 'discriminatory' trade schemes. (9) Furthermore, even within the all-inclusive so-called multilateral rules based system, the majors consistently utilise all sorts of 'informal' and illegitimate backstage inducements and offers, or pressures and threats, against targeted countries, both the stronger and the weak.
Of course, a multilateral system of rules must be devised in order to try to contain such abuses by the powerful. And, of course, it if infinitely preferable for developing countries to be negotiating together to deal with the stronger powers. The advantages of multilateralism are clear. The disadvantaged or dangers arise, however, when the developing countries do not face up together to the powerful countries, and when the multilateral rules that are produced out of profoundly imbalanced negotiations are themselves heavily biased and prejudicial against the needs and dinterests of developing countries.
The even fuller reality within the multilateral trade system is that the most powerful countries, the US and the EU, have also always utilised bilateral and regional strategies in furtherance of their global(isation) strategies. Before and even while they were negotiating the ground-breaking Uruguay Round Agreements (URAs) - to open up and (re)regulate all economies and all sectors according to the requirements of their global corporations and national economic interests - both the EU and the US were simultaneously busy consolidating their regional economic power bases; the former as the European Community/Union and the latter through the North American Free Trade Agreement/Area (NAFTA). Conversely, to this day - even as they both continue to deepen and expand their regional economic power blocks and spheres of operation - they energetically continue, at the same time, to work and argue in the WTO about the necessity for 'one integrated open global economy' and a single system of global rules applicable to all.
5. The World Trade Organisation (WTO) as 'open negotiating platform' ?
The WTO is the most significant expression and instrument of the MTS. The expansionary nature international outreach of the highly industrialised countries' national economies and the global operations of their corporations require an open or so-called 'integrated' global economy. This can be achieved piecemeal through dozens of bilateral FTAs and thousands of BITs (bilateral investment treaties). However, the more efficient and effective means for the major economies and their companies to get the required access and on desired terms and conditions is through binding multilateral rules created through the WTO and supported by other related international neo-liberal institutions such as the IMF and World Bank. And, while powerful governments and corporations can - and do - resort to all sorts of other less 'legitimate' or even illegal means to secure their interests, it is nonetheless more effective to do so, as far as possible, under the cover of some sort of 'legality'.
Hence the importance to the major powers of being able touse the WTO 'rules', in conjunction with the standing threat or actual employment of its quasi-judicial Dispute Settlement processes. Hence also the utility for the majors of the 'legal' application of WTO-sanctioned enforcement measures when necessary - whether against each other in their own trade wars, and/or against other countries when needed. The risk for them - as with any half-way decent system of national laws - is that on occasion the poor are able to use the judicial system to protect themselves against the rich, although the legal spaces and their respective means are always extremely uneven.
Fundamentally, however, the multilateral system of rules under the WTO constitutes an essential universal 'hold-all' for all economies and all companies, even while the majors create and use other specific bilaterals or regionals as they judge necessary. The US and the EU are also politically shrewd in presenting these other agreements as being based on 'compliance with' WTO rules; although these are interpreted and used very selectively. They also often go beyond the WTO rules to enforce the acceptance of 'WTO+' terms that are not (yet) enshrined in the WTO, and are actually being resisted in the multilateral processes. In fact, bilaterals and regionals are often deliberately employed to divide developing and weaken their unity within the multilateral processes. Once targeted countries have already 'signed up to' certain commitments in their bilateral agreements there is little point in resisting the same demands from the majors in the multilaterals.
In sum, the major powers operate in such a way as to make the multilaterals, bilaterals and regionals complementary and mutually reinforcing. The constant underlying aim and common denominator to all these instruments and approaches is the unrelenting promotion of their economic/strategic interests.
When SA trade analysts refer to 'the multilateral trade system', they are essentially referring to the World Trade Organisaton. The argument is that the WTO provides the open and level platform for the negotiation and the guarantee of a "multilateral rules-based system". As such, this system of rules must be carefully protected and promoted. The first question, of course, is whether the WTO is in fact a 'level' platform for countries of such vastly different size and economic/political weight. Or whether it can only be made less skewed, or slightly more level, through the creation and exercise of countervailing combined power of as many as possible of the other member states through tactical and strategic alliances amongst themselves. This is what has been building up over the past decade of intense formal and informal, backstage and frontline struggles in the WTO between the developing and the developed countries. Contributing to these combined and counterbalancing developing country efforts is the fundamental political challenge also facing South Africa in the WTO.
At this stage, however, the point to be taken on board within South Africa is that, while a global rules-based system for all international relations - and beyond only trade - is undoubtedly preferable, the WTO as is often pointed out is power-driven. It is a power-based rather than a straightforward 'rules-based' institution. But, the equally important point and challenge lies in the very nature and content of WTO rules. The basic problem is that these are deeply biased, inconsistent and inequitable. And, therefore, the outcomes and effects of such rules are inherently imbalanced. Above all, these rules are based on the assumptions of the trade-and-growth paradigm:
- on the necessity to encourage an ever-greater - and exponential - growth of global trade
- on the inevitability and self-evident necessity for universal trade liberalisation.
So pervasive are the assumptions about the desirability and inevitability of trade liberalisation that even even developing country governments that have experienced the negative effects of trade liberalisation and are resisting further liberalisation, nonetheless routinely refer to the ultimate importance of -eventual - trade liberalisation. It is not always clear whether these are tactical positions or stated with genuine conviction.
But the WTO's trade regime includes a host of other so-called trade-related agreements. The most notorious of these are Trade-Related Investment Measures (TRIMs) and Trade-Related Intellectual Property rights (TRIPs). These, in turn, are actually not only about trade (and investment) liberalistion They aim to secure the (re)regulation of international economic relations and the external determination domestic policy-making within all countries in the interest of the transnational corporations. These require an open integrated global economy and appropriately organised national economies conducive to their trade, investment and production operations.
So profoundly biased and intrusive are these rules, and so dangerous are their immediate effects and further implications, that even 'resistant' developing country governments in the WTO have to be challenged
- whether such a system of rules can be effectively modified so as to be rather less negative in their impact; or
- whether such a system of rules can be 'improved' so as to allow slightly wider policy 'spaces' and time frames for developing countries; or
- whether these intrinsically tendentious agreements and rules have to be definitively blocked and in many cases rescinded altogether.
6. The cautious diplomatic stance, and 'trade-off' approach?
Whether or not the SA government agrees with all the details of WTO rules and agreements - and it certainly does question some, such as the egregious Agreement on Agriculture and some aspects of TRIMS - the problem is that, in its concern not to upset the majors and destabilise the whole fragile 'rules-based' system, South Africa's positions and engagement in the WTO have hitherto tended to be contained within, conditioned and constrained by this fear.
This is not to suggest that 'trade diplomacy' is not necessary. The main question, however, is: to what purpose, and to what extent does 'diplomacy' drive any country's international engagements? Or: how much and when should such engagements also be proactively challenging…. and on occasion even confrontational? South Africa's positions in the WTO have mostly been characterised by a notable cautiousness, a general concern not to challenge, but rather to persuade and re-assure the majors. The naivete and futility of this appraoch have been repeatedly demonstrated in the failure of the SA government to 'win over' the major powers in key global forums, such as the G8, in support of Africa's needs.
Such diplomatic and negotiating caution seems also to have been motivated
- by the SA government's decision to project itself, in the WTO and more generally, as a 'responsible' , 'reasonable' and reliable 'partner' in international relations;
- by its expectation of receiving due recognition and possibly even concessions and rewards in return, both economic (trade and investment) as well as political (a seat in the councils of the powerful); but also
- by an abiding concern, on the above rationale, not to antagonise the majors.
Over and above this cautious diplomatic approach, South Africa's stance in the WTO hitherto has also been characterised by a predetermined preparedness to enter into negotiations with the expectation of making compromises. This predisposition limits the defense of this country's interests and has, from the very outset, constrained SA's willingness to participate in most of the more proactive developing county initiatives and alliances in the WTO. (10)
Even where SA has become part of a significant developing country tactical alliance in the WTO, namely the G20, the indications are that it continues to play a very cautious role within it; with a diplomatically 'reassuring' approach towards the majors, and a very evident eagerness to find a compromise settlement. This seems to be SA's approach even before testing the outer limits or fuller strategic potential in the G20s' own proposals. Similarly, while participating in African and other developing country initiatives for the protection of their urgent health and medicine access rights under the WTO's notorious TRIPs agreement, South Africa played a similarly persuasive and cautiously conciliatory role towards the majors and their pharmaceutical corporations.
The fundamental strategic mistake is that South African trade negotiators start out technically, politically - and psychologically - from a 'realistic' preparedness to make 'trade-offs'. They also make this willingness very evident to their negotiating adversaries and therefore play straight into their hands and make themselves very vulnerable to pressures towards early, undesirable and unnecessary compromises in the negotiations. Thus, this accommodating 'trade-off' mentality is hardly the most effective starting point for the successful promotion or even effective defense of South Africa's interests, and is certainly not conducive towards the united and determined countervailing force of the developing countries.
Once again, an even more significant challenge has to be posed to the South Africa's government. This relates to the 'trade-off' of immediate, short-term and merely quantitive export gains - for very specific business interests within South Africa - against fundamental policy rights and spaces, and long-term transformative perspectives and possibilities.
7. The so-called Doha 'Development' Round of the WTO ?
The trade-off of long-term national development needs for immediate sectoral interests is even more contradictory in the context of the so-called Doha Development Round. South African trade negotiators and the DTI are very active promoters of the so-called Doha Development Agenda of the WTO, drawn up during the 4th WTO Ministerial in Doha in November 2001. The South African media routinely refer to the vital importance of 'the development commitments' to Africa and other developing countries within the Doha Round. The South African media to refer to the great significance of the 'development commitments' to Africa and other developing countries within the Doha Round. It is one matter for the SA media to emphasise and attempt to utilise the supposed 'developmental' aims of the current WTO roundas part of their defense of the WTO and the neoliberal project in general. However it is a very different question if South African trade negotiators persuade themselves that the package of apparent quid pro quo undertakings that emerged from the Doha ministerial are anything but highly problematic. (11)
On the one hand, the Doha text itself is full of caveats and evasive formulations inserted by the majors to protect their interests. Furthermore, in the period immediately following Doha, the majors exposed their real intentions and the true character of their 'undertakings' in Doha by evading even the agreement that had been made on health issues under TRIPs. And, since then, the majors have consistently and persistently done everything they could and can to avoid the undertakings that they had seemingly made in Doha in relation to their legally and morally questionable agricultural production supports, export subsidies and international dumping. And there are many other evasions of their 'development' promises made. These are not only in Doha but ever since their undertakings to the LDCs and to the Net-food-Importing Developing Countries (NFIDCs) which they promised in the Marrakesh Agreement in order to clinch the Uruguay Round in 1994.
On the grounds of these long-standing promises and disappointing experiences, it is significant to note that most African governments, separately and together, seem to be avoiding calling this the Doha 'Development' Round ….. and refer rather to 'the Doha agenda'. On the other hand, together with the Caribbean countries, they are insisting very firmly on the prioritisation of their development rights and needs in this round of negotiations.
It is most welcome that the South African Minister and Deputy Minister of Trade have both publicly made the 'development' aims of this round of WTO the sine qua non of progress in the negotiations. Of course, it is also useful for the SA government to employ the development aims and claims of the Doha agreement as a negotiating lever in its WTO engagements. However within this commendable tactical and broad strategic approach, South Africa's negotiators must also be wary of allowing their own negotiating stance to lure them into relying on the detail of the Doha text which - like all such 'negotiating texts' - is full of flaws, compromises and limitations. South Africa may also be lured into defending, instead of just using, the Doha document because of a certain sense of 'ownership' of the Doha agenda, due to the leading role played by the then-SA Minister of Trade in formulating and promoting its endorsement at Doha in November 2001.
8. 'Fast-track' in the USA …. and therefore in the WTO?
A more specific political judgment made by South African trade officials is that the current Doha Round of negotiations in the WTO must be held together and carried through to a conclusion before the end of 2006. This is six months before the date for the termination of the current 'fast track' trade negotiating mandate of the US President. The repeated warning made by US trade negotiators and others is that it would be seriously disadvantageous to other countries, and to 'the global free trade system', if the negotiations within the Doha Agenda are not finalised before the end of 2006, in order to allow US trade officials six months to get their WTO undertakings implemented before the 'cut-off' date for US Presidential fast-track powers. According to this argument, the external trade policies directed thereafter by the US Congress will be far slower, more complicated, more unpredictable - and possibly very protectionist - than under the present dispensation. This is another typical example of the many political ploys that US negotiators utilise in their trade negotiations.
The counter-argument, however, is that the complexities and uncertainties - and protectionist tendencies -within US policies are already a given. At the same time, within these uncertainties, the constant and long-established characteristic of US international interventions is their unrelenting self-serving nature. And this holds true whatever the internal political arrangements are within the US at any particular juncture. This is a permanent problem facing all countries in dealing with the US in all sectors and on all issues. Developing country strategic assessments cannot be based on reliance on the rapid, or otherwise, decisions of the current or any other US President.
Developing country strategic assessments cannot be based on reliance on the rapid, or otherwise, decisions of the current or any future US President. Whatever the fine differences of emphasis or method between one US administration and another, South Africa together with the rest of the world, cannot allow themselves to be manipulated and held hostage by the United States, and precipitated into unsatisfactory and dangerous inter-locking agreements within the Doha Round simply on the basis of what a future US administration 'might' or might not do.
South Africa and other developing countries have to engage in the Doha Round, and within the WTO more generally, on the basis on their own assessments of their own fundamental interests and needs, and they have to form alliances on these bases wherever possible and act firmly 'whatever it takes'. And if this principled stand results in an impasse in Hong Kong and even the 'collapse' of the Doha Round…the answer must be: so be it !! This is the challenge facing the developing countries in the forthcoming WTO ministerial in Hong Kong…. and beyond
9. The 'failure' or the 'success' of the Hong Kong WTO Ministerial?
All the indications are that the current negotiations are not advancing towards agreement or even minimal 'convergence' on the many issues at stake. This is hardly surprising given the deliberate defensive manipulations by the EU and US in the agricultural negotiations and their offensive counter-demands for improved agricultural market access into the developing countries, together with their insistent demands for vast market access into the services sectors and all other sectors in all other countries under the GATS and NAMA negotiations.
The warnings by key players, including the EC Trade Commissioner and even the WTO Director General, and in mainstream media reporting, are that the Hong Kong meeting could be 'a failure'. The further interpretations are that this could be a 'catastrophe' for SA… for Africa… for the developing world…. for the credibility of the WTO… and for the maintenance of the multilateral trade system. These alarmist threats - and disguised defenses of the status quo - must be unpacked and seen for what they are.
The immediate 'trade' stakes may be high for specific export sectors and economic interest groups (such as commercial farmers). But the long term developmental and more fundamental economic implications for the whole country and thus the political imperatives are very much greater.
The strategic necessity now is that the various existing and emerging alliances of African and other developing countries must stand firm on their identified positions and agreed demands. And, if their principled stands cause a deadlock, they must not allow themselves to be blamed for 'the failure' of Hong Kong or brow-beaten on this by the majors and their media agents. They must place the blame squarely where it lies: with the maneuvers and resistance by the majors to make real adjustments in their own economies that would be the bare minimum to make this a more developmental round.
To the contrary, the developing countries should welcome the impasse, remain firm, reinforce their positions and the organisational and political gains that they have made since Cancún, and towards Hong Kong. And they must continue to defend and utilise these gains to shape whatever ongoing processes emerge from Hong Kong, or are planned for 'the rest' of the Doha Round ….. if there is to be 'the rest' of this round.
The fact of the matter is that the best and necessary outcome in the interest of South Africa, Africa and the developing countries is for there to be another impasse in yet another WTO ministerial meeting. Each 'failed' WTO ministerial must be seen as a victory and part of the continuing and essential process of incrementally shifting the global balance of power, both within the WTO and more broadly: between the developed and developing countries, and between the North and the South in general, between neo-liberal globalised capitalism and sustainable and equitable alternatives for humanity and our common planetary home.
South Africa's role and responsibility
The overall challenge to the SA government is whether this country has participated and contributed as much as it should have, and could, to the many developing country negotiating interventions and initiatives… over and above its role in the agriculture-focused G20.
South Africa now seems to be moving away from its earlier misconceived decision to "act as a bridge between the developed and developing countries" in the WTO, and rather to be acting now more clearly and publicly within, or with, various other developing country tactical coalitions. If this advances as it should, South Africa will at last be in a position to make the vitally important contribution to developing country resistance in the WTO that is commensurate with its strong democratic credentials, and the political skills within this country.
South Africa also has the very important responsibility, as a relatively stronger 'emerging' African economy, to give active support to the decisions and positions of the rest of Africa, and the world's LDCs (most of which are in Africa). And, in so doing, South Africa - as a developing country with its own deep problems and vulnerabilities in the liberalised globalised system and within the restrictive regime of WTO rules - would also be helping itself. This would be a more effective way than through trying to merely improve some of the details within the existing rules, adopt weak damage limitation positions, and be concerned to appease or 'not antagonise' the dominant powers.
Ultimately, whether governmental actors within or non-governmental actors on the outside of the WTO aim within their various immediate tactics or long-term strategic conceptions to
- 'reform and improve' the rule(s) and the functioning of the WTO; or
- reduce the excessive power and the global dominance of the WTO over all other institutions; or
- 'relocate' the WTO under the UN system and the combination of international agreements; or
- remove' the WTO altogether
…… there is a both an immediate and longer-term shared interest between governments and non-governmental forces in South Africa and the South in resisting the dominance of the governments and corporations of the powerful industrialised countries over the whole world.
And therefore there is a common basis to agree tactically on the need to use the negotiations within the Doha Round and in Hong Kong, and in the WTO more generally, to contribute towards shifting the global balance of power in ways and directions so necessary for South Africa, for Africa, for the rest of the developing world, and for the world.
(1) As one European Commission trade negotiator said in an off-the-cuff remark to this writer during the extended EU-SA trade negotiations, "All this talk about partnership and cooperation is for the politicians. Trade negotiations are about interests. And let us be clear about this: we are all pursuing the maximum advantage for our respective countries".
(2) Within key UN agencies - above all UNCTAD, UNDP and the ILO - as well as by academic analysts such as Ha Joon chang of Cambridge University, and among trade, developmental and environmental and gender rights NGOs. Discussed more fully in D.Keet "South-South Strategic Alternatives", AIDC (forthcoming).
(3) As one example, see Joseph Stiglitz , Prebisch Lecture at the UN Economic Commission for Latin America, Santiago de Chile, 26/08/2002.
(4) See for example Dani Rodrik of Harvard University and Martin Khor of Third World Network (TWN), et al in UNDP, "Making Global Trade Work For People", 2003.
(5) For example President Mbeki and Finance Minister Trevor Manuel in the context of their engagement with the UK's "Africa Commission" and in the build-up towards the 2005 meeting of the G8 in Gleneagles Scotland.
(6) And even de facto national policy departures from, and counters to, global theories and rules - see for example the little publicised case of New Zealand in John Ralson Saul "The Collapse of Globalism", Toronto, 2005.
(7) As it is now in the process of doing through the negotiation of a US-SACU trade agreement
(8) Angered by the successful developing country resistance to the major governments' aims during the Cancún ministerial,
(9) Such the EU's EBA (Everything But Arms) offer to LDCs, and the US' AGOA (African Growth and Opportunities Act ) presented to Africa, and a similar version to the Caribbean
(10) see D.Keet, "South Africa's position and role in promoting the WTO", AIDC, Cape Town, May 2002.
(11) ibid pages 38-43