Following South Africa’s fourth post-Apartheid election, the country’s former deputy minister of trade Dr. Rob Davies was promoted in the new Cabinet to be South Africa’s new Minister of Trade and Industry. Davies comes to the position with an impressive record of experience in international trade, where he is known for his strong developmental outlook to trade policy and trade negotiation.
This week Davies made his first official remark on the Geneva scene, providing some key insights into South Africa’s stance for what lies ahead in what is hopefully the final phase of the Doha negotiations in the months ahead. The following interview with Davies is relayed to our readers with the kind permission of the Washington Trade Daily who obtained an exclusive interview with Davies this week. In the interview Davies called for a fresh approach to address the developmental contents and the overall balance in the Doha Development Agenda. The interview provides the first glance as to what the private sector might expect from a near future South African trade policy. The interview was reported by the Washington Trade Daily as follows:
Members need not adopt a “pressure-cooker” approach to have a ministerial meeting, Mr. Davis said. “I don’t think such an approach is the right one because it would not address the developmental concerns of the Doha round.” “Ultimately, what matters is content and substance – not deadlines which fail to address the fundamental imbalances in the agriculture and market-opening for industrial goods,” Minister Davies reiterated.
“Our idea about a new approach is that we need to look at the question of developmental contents of the round and examine the overall balance – which is woefully missing at this point,” Minister Davies said. “There has to be a truly multilateral response to overcome the current economic crisis.”
“What is on the table in Doha agriculture and market access proposals are tilted against developing countries, including South Africa,” Minister Davies continued.
Setting out his new government’s multilateral trade priorities, Minister Davies said, “We want an ‘early harvest’ in the Doha negotiations for the least developed countries” since they are most severely hit by the current economic downturn. “Any developmental journey in the global trading system must begin first with the LDCs.” In addition, there must be a solution to the “cotton” problem in accordance with the Hong Kong Ministerial Declaration that called for an “expeditious, ambitious and specific” agreement.
When asked to comment on new US Trade Representative Ron Kirk’s demand for “changes” in the Doha trade negotiations, the South African minister said he “welcomes the approach adopted by the new US administration and its intense engagement with members.” Mr. Davies said he did not meet with the new USTR when he led the US delegation to new President Zuma’s inauguration a week ago. But, he said he looks forward to meeting him in Bali in late July on the sidelines of this year’s annual Cairns Group meeting, where an informal WTO trade ministerial is expected to take place.
On the stated US approach – which calls for ambitious market access in the big emerging countries like China, India, Brazil and South Africa – Minister Davies said it is imperative that countries build “multilateral solutions to the current economic crisis as their top priority since developing countries and LDCs are mostly severely hit even though they are not responsible for this meltdown. … Consequently, we are not just interested in mechanisms but the right multilateral solutions,” he stated. “The US stance not to rush into modalities and take a step backwards for quiet reflection is the right approach,” Mr. Davies argued. He urged Washington to reflect on the “developmental imperatives” of the negotiating round.
As regards skipping “modalities” and moving directly into product-specific request/offer negotiations, the new trade minister said “there was never any agreement on several elements in the packages discussed in July and December last year. … For example, what are we going to say about the ‘special safeguard mechanism’ in agriculture or sectoral tariff elimination if we jump over these elements and move to scheduling,” he asked. “The answer is ‘no’,” Minister Davies said.
“I would argue that we need to take a step backwards and examine the overall balance in agriculture and market-access for industrial goods,” Mr. Davies said, pointing that “South Africa is not going to benefit from the Doha deal as we will largely pay without commensurate gains. … In agriculture, South Africa will not gain much because of the existing bilateral agreement with the European Union as well as the impact of the African Growth and Opportunity Act. “There is limited access from the current proposals on tariff-rate quotas in either the EU market or the US as the level of ambition is diluted,” he maintained.
“When it comes to market-opening for industrial products, we pay directly and excessively, leading to a situation where we will be affected disproportionately by the NAMA proposals,” Minister Davies said. “What we see now is that the deal in agriculture is modest, while in NAMA we are directly and disproportionately affected,” he argued. “South Africa has all along maintained that the very carefully constructed package in agriculture by the previous chair, Ambassador Crawford Falconer, provides lots of concessions and flexibilities to the developed countries, while the one on NAMA does not provide the same flexibilities for the developing countries as it includes anti-concentration conditions and sectoral tariff elimination,” Mr. Davies said. Consequently, the level of ambition in NAMA is much higher than what is provided in agriculture. It undermines “paragraph 24” of the Hong Kong Ministerial Declaration, he argued. The minister underscored the need to “revisit paragraph 24 and we would urge all members, especially the new US Administration, to address the issue of balance on a beneficial footing.”
South Africa, Minister Davies continued, is genuinely concerned about the onward march of insidious “protectionism.” He said the recent Group-of-20 meeting in London clearly stated that bailout packages must be assessed in regard to their protectionist underpinnings. Mr. Davies said developing countries are not in a position to provide such aid. He suggested the only instrument they have at this point is to raise their applied tariffs. South Africa, however, has not done so; in fact, some tariffs have been lowered. “If we now raise a few marginally to help our domestic industry, this cannot be finger-pointed as a protectionist response,” the minister maintained. [End of interview].
We take the opportunity of wishing Dr. Davies well in his efforts in negotiating the conclusion of the Doha Development Agenda in a development friendly fashion, not only for South Africa, but indirectly also for the African continent more widely.