South African Minister of Trade and Industry, Dr Rob Davies, attended the National Consultative Forum in Midrand to prepare for the World Trade Organisation (WTO) 11th Ministerial Conference (MC11) to be held in Buenos Aires, Argentina, in December 2017.

The Forum provided an opportunity for the exchange of views between Government, Labour and Business on the possible outcomes in preparation for the upcoming MC11. Dr John Purchase, CEO of Agbiz and the Convenor for Business in the Trade and Industry Chamber of NEDLAC, presented the position of Business.

The Ministerial Conference is the highest decision making body in the WTO and will be attended by 164 countries which are members of the WTO.

Minister Davies said that MC11 will be held at a time of increasing backlash against multilateralism and trade liberalisation due to the lack of inclusive growth.

“There is a need to define a new form of ‘inclusive multilateralism’. The United Nations Conference on Trade and Development (UNCTAD) in its 2017 Trade and Development Report calls for a ‘global new deal’ to enhance growth and development,” said Davies.

Minister Davies said that South Africa’s priorities are aligned to those of the African Group and the Africa, Caribbean and Pacific (ACP) Group. The key priority is therefore to conclude the outstanding work of the Doha Development Agenda (DDA) including in agriculture, to address the trade distorting domestic support subsidies being provided by mainly developed countries.

Minister Davies noted that there were many proposals on the different issues discussed at the WTO but there seems to be very little convergence.

“On the SA side, we are assessing each of the proposed issues, to determine whether they can indeed be delivered, whether they meet SA’s most urgent developmental needs, and whether they involve demands that unacceptably limit our policy space.”

The National Consultative Forum also provided an opportunity for Government and Labour to sign a Pledge not to concede to become a party to the WTO Agreement on Government Procurement. Business undertook to sign the Pledge once the necessary approval has been obtained.

The Pledge is an outcome of the annual NEDLAC Trade and Industry Chamber’s Strategic Session with the Minister of Trade and Industry, Dr Rob Davies, held on 22 September 2017 at NEDLAC House. In the strategic session, a resolution was taken by NEDLAC Constituencies, which include organised labour (COSATU), organised business (BUSA) and Government (the Department of Trade and Industry) not to concede and sign-off on “The World Trade Organisation (WTO) Agreement on Government Procurement”.

The Government Procurement Agreement (GPA) is a plurilateral agreement within the framework of the WTO, meaning that not all WTO members are party to the Agreement. Currently 47 of the 164 WTO members have signed the GPA. The fundamental aim of the GPA is to mutually open government procurement markets among its signatories.

The NEDLAC social partners are concerned that joining the GPA could be to erode policy space available to implement South Africa’s development and employment objectives by constraining local content requirements in government tenders that can be used as a policy tool to facilitate sustainable industrial development. Local content requirements in government procurement are utilised as strategic levers to enhance domestic production capabilities.

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11th WTO MC Consultative meeting with Minister Rob Davies at the DBSA

Statement by Dr John Purchase, Business Convenor in Nedlac’s Trade and Industry Chamber

Business sincerely appreciates the opportunity to raise matters with regard to the upcoming 11th WTO MC to be held in Buenos Aires, Argentina, in December 2017. Business also sincerely appreciates the open and inclusive approach followed by Government with regard to engaging on these matters, and including Business in its delegation to the 11th WTO MC.

• The World Trade Organisation (WTO) Ministerial Conference is the highest decision-making body of the WTO. The 11th Ministerial Conference (MC11) should be used effectively towards developing greater consensus on the Doha Developmental Agenda (DDA) priorities that accommodate the needs of the developing countries and Least Developed Countries (LDCs). Business agrees that the implementation of commitments made at the 10th WTO Ministerial Conference (MC10) in Nairobi in 2015, as well as those made on trade facilitation at the 9th Ministerial Conference in Bali, should remain a priority for South Africa. This was also highlighted by Business at the recent Nedlac TIC Strategic Session. In general, Business requires and is willing to engage in more robust engagement with Government in especially Teselico on substantive trade matters affecting the private sector.

• Fair trading conditions can be instrumental in fast tracking the development of the less developed economies. The fairness can be achieved through the prioritization of resolving the issues that harm the development of developing countries and LDC issues in MC11. For South Africa to get any meaningful gains, the developmental objectives and principles of the DDA should take precedence and remain a priority.

• Trade-distorting support in agriculture continues to be a threat in the global markets and hinders growth and development in both developing countries and LDCs. As a crucial sector in South Africa and the continent as an instrument to expand trade, growth of the economy and attain food security, agriculture remains one of the priority negotiation areas in MC11 for SA. Lack of consensus remains a major concern to both industry and the country as a whole.

• In terms of the proposed transparency on export restrictions, South Africa should support any steps to greater transparency in the management of export restrictions.

• Business is concerned that the proposed agreement on stockholdings for food security purposes (PSH) may hold certain risks and implications for South Africa. We need to first understand these risks and long term implications before Business can support the proposed agreement.

• Special and Differential Treatment for developing countries and LDCs should be a determinant of MC11 outcome. The same goes for the Special Safeguard Mechanism (SSM) provided to developing countries, to provide buffer against import surges and low-priced imports. The implication of supporting the SSM to South Africa’s exports requires further consideration and analysis before South Africa should provide unqualified support to this inclusion.

• While it may be premature to introduce new items, such as e-commerce and investment, into the WTO negotiations, and these could divert the focus of the meetings from the existing developmental agenda, it is also essential that the South Africa government, with its social partners, address these developments as a matter of urgency, and as decided at the recent Nedlac TIC Strategic Session. While the readiness of the developing countries to engage in negotiations in areas like e-commerce remains questionable, we need to understand that these developments are natural developments in business innovation and sophistication, and that many of our trading partners are not going to wait for developing countries and LDC’s. Premature agreement on the rules based e-commerce provisions can limit the development of smaller and least developed economies, but we must be wary of using this as an excuse to growth and development. We run the risk of greater marginalisation if we do not participate in this debate constructively, perhaps using it as a trade-off on specific DDA and other ambitions we may have.

Concluding Remarks

A welcome outcome in MC11 would be the one that reduces the amount of agricultural subsidies and other questionable no-tariff barriers, and offers Special and Differential (S&D) treatment provisions in various areas to developing countries as per the Doha Declaration mandate.

The expansion of the WTO work programme could be to the detriment of the existing developmental mandate, but smart positioning and options can benefit South Africa.

Regional integration and related trade negotiations remain a priority for SA. In the absence of consensus on DDA issues, the priority remains the establishment of the beneficial regional trade partnerships. But we must also not neglect potential and improved bilateral agreements with existing and potentially new major trading partners.