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TRADE: Rich Countries Apply ‘Double Standards’ in WTO Doha Round

Ravi Kanth Devarakonda

GENEVA, Nov 28 2008 (IPS) - South Africa says the major industrialised members of the World Trade Organisation (WTO) are applying double standards when it comes to their interests and those of African countries in the Doha Round trade negotiations.

The U.S., Japan, the European Union (EU) and Canada, among others, want to secure flexibilities in the ongoing Doha Round trade negotiations to continue with their trade-distorting practices in agriculture, according to Faizel Ismail, South Africa's trade envoy to the WTO.

‘‘But they turn their back when it comes to addressing specific problems faced by South Africa and its partners in the Southern African Customs Union (SACU). These problems stem from commitments accepted by the former apartheid regime,’’ Ismail told IPS in an interview.

‘‘What we are asking is fair treatment in the Doha Round so as to overcome some grave blunders committed by the apartheid regime in the previous Uruguay Round of trade negotiations concluded in 1995,’’ he explained.

‘‘It is an ugly situation in which the industrialised countries like Japan, the United States and the European Union insist on a range of flexibilities for them in agriculture and they get it without paying any price,’’ the South African trade envoy said.

While Japan can continue to have tariffs at well over 500 percent to protect its rice and other farm products, the U.S. wants a special flexibility to maintain its trade-distorting farm subsidies at 15 billion dollars in the Doha Round – despite its actual subsidies last year being between seven and eight billion dollars.

‘‘However, we are being subjected to unprecedented scrutiny and examination from all fronts to justify our developmental concerns in a developmental round,’’ Ismail maintained.

The WTO’s Doha Development Round was launched in 2001 on the promise that developmental concerns of the poor countries will be addressed to enable them to integrate into the global trading system.

After seven years of negotiations, the Doha Round has been transformed into purely market-access negotiations to help the industrialised countries and their lobby groups, according to several developing country trade envoys.

As WTO members are going full-out to establish what are called modalities for the Doha development agenda on agriculture and industrial market access next month, many developing countries in Africa are facing an uphill battle to realise their core concerns in both these areas.

The modalities indicate the level of import tariff and subsidy commitments as well as tariff cuts for industrial products that developed and developing countries will have to undertake as part of the Doha Round.

‘‘The big boys (the U.S., Japan, the EU and Canada) are behaving like gluttons who just want to consume and pocket everything without appreciating that the situation of SACU members demands flexible treatment,’’ Ben Katjipula, Namibian trade envoy to the WTO, said in an interview with IPS.

At issue is whether South Africa and the four other SACU members – Namibia, Swaziland, Botswana and Lesotho – should have flexibilities to address the specific circumstances in which their customs union evolved over the past century.

In 1995, South Africa’s former apartheid regime had agreed to commitments as a ‘‘developed’’ country in the WTO’s Uruguay Round. Consequently, South Africa’s import tariffs are currently at 17 percent while average developing country tariffs are between 30 and 40 percent.

The low tariff profile of South Africa also applies to the other, smaller member states of SACU. It affects them adversely by making it easy for cheap imports to enter the SACU market. This had caused enormous damage to industries in the textile and apparel sectors, automobile and auto parts, furniture and leather products.

Consequently, there are high rates of unemployment in these sectors at present, said Ismail, arguing that without additional flexibilities in the Doha Round to protect certain vital, labour-intensive industries, SACU governments will face even more job losses.

South Africa and its partners say they need at least 23 percent of additional flexibilities to ensure that their sensitive industrial tariff lines are subjected to low or zero tariff cuts.

However, the industrialised countries say they cannot consider more than 16 percent of flexibilities on the grounds that any concession to South Africa and its SACU partners would cause ‘‘systemic’’ problems as well as pave the way for more ‘‘free-riders’’ in the global trading system.

‘‘They want production and employment data from us to back up our demand for enhanced flexibilities while no such examination is done for the carve-outs they are about to secure in the Doha agriculture,’’ said Katjipuka.

Ismail warned Japan, the U.S. and the EU not to undermine an agreement on the flexibilities needed to overcome grave joblessness back home. It seems South Africa is willing to do the same for the extraordinary protections that Tokyo and Washington want in agriculture.

South Africa and its SACU partners have genuine problems because of their peculiar tariff commitments on industrial products. They deserve special treatment, said Ester Busser, a representative of the International Trade Unions Confederation.

‘‘Unlike other developing countries, the five countries in SACU deserve additional flexibilities to ensure protection for some sensitive industries, like clothing and textiles which is vital for employment,’’ Busser told IPS.

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