By IPS Correspondents
GENEVA, Mar 25 2008 (IPS)

The Congress of South African Trade Unions (COSATU) has been an active civil society player in South Africa’s decisions during the current World Trade Organisation Doha Round of talks on non-agricultural market access (NAMA).

COSATU’s labour market policy coordinator Rudi Dicks spoke to IPS's Aileen Kwa about its concerns and the special offer from the EU and U.S. to encourage South Africa to drop its resistance to NAMA and leave the NAMA 11 negotiating group of developing countries.

IPS: Why is COSATU so concerned about the NAMA negotiations? RUDI DICKS: South Africa has one of the highest rates of unemployment rates in the world – about 38 to 40 percent. Thirteen years into democracy, poverty remains a constraining factor.

Many rural households in the former Bantustans (territories set aside for black people under apartheid) do not have the basics – water and electricity – and many households still struggle to meet their food needs, either partially or entirely. Poverty is very present.

When we joined the WTO (World Trade Organisation) in the 1990s, South Africa undertook commitments as a developed country. We took on very low levels of bound tariff rates. (South Africa has an average tariff rate of 17 percent whilst the developing country tariff average is 32 to 34 percent).

Also, as a result of these commitments, the difference between our bound tariff and actual applied tariff rates is very narrow. (The WTO talks start from countries’ bound tariff rates, so that countries with high bound tariff rates and a large gap between their bound and actual applied tariff levels are at an advantage. This is not so for South Africa because of the commitments it made).

In fish products, we will see a 40 percent reduction in applied rates if you use a coefficient of 20. (Coefficients are the numbers to be put into the formula that will determine the depth of tariff cut.)

In consumer goods that are chemical-related, we also see an applied tariff reduction of 40 to 50 percent. In automobiles, where the country has successfully developed the sector, tariff cuts will be around 34 to 50 percent if additional ‘‘flexibilities’’ are not applied. (‘‘Flexibilities’’ refer to lower tariff cuts or a certain percentage of tariff lines to be exempted from tariff cuts).

The clothing and textile sector will be worst hit. We expect textile tariffs to decline by 62 to 67 percent; clothing tariffs by 45 to 50 percent and footwear by 57 to 61 percent. We are also worried about the electronics sector.

All these sectors are labour-intensive. The total formal workforce in manufacturing in South Africa is about 1.19 million people. There are approximately 139,000 workers in the textile and clothing sector; about 10,000 in the footwear sector; and 108,000 workers in the auto industry. The 15,000 in the basic chemicals industry will also be affected.

Today, we have a national industrial policy framework in place. The intention is to promote job creation and especially provide decent employment. The second prong of the policy is redistribution. We have very high levels of inequality. So we want to improve our industrial base and ensure that it serves our objective of greater income equality.

If we agree to the NAMA coefficient, it will prohibit the development of our industrial policy. The sectors affected are key sectors for growth in our national industrial framework. We will lose our policy space. In reality, this means that we cannot implement our national development policy framework, and we won’t be able to create the types of jobs required.

IPS: Have you already experienced large scale retrenchments in the manufacturing sector? RD: Our commitments in 1995 at the WTO as well as the government’s trade liberalisation strategy in 1996 impacted severely on the clothing and textile industry as well as the electronics industry. In the clothing sector, our WTO commitment entailed a tariff reduction of 45 percent by 2006. We carried out reforms in excess of what was required and have lost 126,000 jobs in this sector since the start of the liberalisation process.

We had made similar commitments in the electronics industry which is also labour intensive. The tariff reduction exercise decimated our industry. Now we have television sets, radios and other electronic goods from Korea, Malaysia and China.

IPS: The negotiators are now talking about ‘‘flexibilities’’ for sensitive sectors. Will this alleviate your concerns? RD: We are not happy with the parameters of what is being discussed. Even if we are given a higher coefficient or more flexibility for a few more tariff lines, there will still be a significant number of tariff lines that will be affected. Even with a coefficient of 30, 18 percent of our 2000-plus tariff lines will be affected. With a coefficient of 25, 26 percent of our tariff lines will be affected. We would need more flexibilities than what the U.S. and EU are willing to entertain.

IPS: Have pressures been put on South Africa to concede to a deal? The NAMA draft text specifically mentions additional ‘‘flexibilities’’ for South Africa. RD: Yes, this is being talked about but there are no details as to what additional flexibilities might be on offer. Pascal Lamy (WTO director general) came to South Africa two weeks ago to talk to the constituencies there about the WTO and the possibility of treating South Africa as a special case.

I suspect the U.S. and EU want the country to pull out of the NAMA 11 coalition of developing countries (which South Africa leads) (in return for) greater flexibilities being granted to South Africa in the negotiations.

IPS: If the government succumbs to these pressures, will there be ramifications for them at home? RD: The trade unions and civil society groups are not just sitting there quietly. We have not only supported our government, we have also kept them on their toes and have been critical of them. If they accept a deal that will harm labour, there will be a severe crisis at home. COSATU is an important part of the tripartite (ruling) alliance.

It will result in us looking at a programme to intensify mass action, protests and national strikes. We talk to the ruling party, but when we don’t agree, we make that known.

But this is not a likely route. The South African government remains steadfast in its commitment to develop the country’s manufacturing base. They know that they do not stand alone in their position at the WTO. COSATU is doing research; the business community is supporting their position; and community based organizations are also supporting the government’s NAMA position.

IPS: How would you like to see the Doha Round of talks unfold? RD: We want to see the collapse of the round. This is clearly not a Development Round (as has been purported). In our assessment, there will not be development benefits for developing countries.

*The second in a series of two interviews on the NAMA talks

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