Egypt-South Africa initiative for new round, with investment

by Chakravarthi Raghavan

Geneva, 5 Apr 2001 - - Egypt and South Africa appear to be trying to persuade and lineup key developing countries to agree to launch a new round of multiliateral trade negotiations at Doha (Qatar), and - including investment, government procurement, trade facilitation, industrial tariffs.

A meeting of trade ministers from 25-30 countries has been convened to meet in Egypt next week.

Several of the developing country delegations at the WTO have the impression that like the earlier WTO sponsored initiative for an African trade ministers meeting last year in Gabon (where the efforts to endorse a new round failed), in relation to whose preparations the African Geneva trade missions were bypassed, the Egyptian-South African initiative for next week’s meeting is also attempting to bypass the developing country trade missions here, in trying to mobilise support for a new round at Doha and with some of the new issues that the EC and Japan have been promoting.

No clear picture is available here of the countries invited and attending, developing country trade diplomats who are normally active at the WTO, said Thursday.

An African country said that though Zimbabwe is the coordinator for the Africa Group at the WTO, it does not figure in the list of invitees, nor some of the leading Caribbean countries, while several of the Arab countries who have not been conspicuous in their active participation at the WTO have been.

According to the information available (in Geneva) with some of the invited countries, the list of countries invited include: Egypt, Gabon, Kenya, Nigeria and South Africa (in Africa); Hong Kong China, India, Indonesia, Korea, Malaysia, Singapore and Thailand (in Asia); Argentina, Brazil, Chile and Mexico (from Latin America); and Bahrain, Djibouti, the United Arab Emirates, Kuwait., Mauritania, Morocco, Oman, Qatar and Tunisia (from the Arab countries).

Several of the leading countries from the Latin American region however will not be at the meeting at ministerial level, and not even immediate no. 2 levels, because of the ministerial negotiations on a Free Trade for Americas Agreement (FTAA) at Buenos Aires.

Egypt and South Africa have formulated a draft paper for the meeting.

While the paper follows the positions and views of South Africa and its Trade Minister, in the run-up to Seattle and after, on several points the positions in the paper are contrary to the positions that Egypt has so far taken at the WTO General Council and elsewhere. In particular, the Egyptian position hitherto has been similar to that India, Pakistan and Malaysia and other members of the like-minded group on the new round and on the inclusion of socalled new issues - that were brought into the WTO for study.

Some developing country delegations said that there were references to the Egyptian-South African initiated meeting and the draft paper, at the EC-Japan hosted meeting of capital level officials in Geneva last week, and that the EC and Japan were ‘encouraging’ Egypt and South Africa to publicise their paper.

The Egyptian-South African draft (Fifth draft), with the title “An Egyptian-South African Approach to New Multilateral Trade Negotiations in the World Trade Organization”, envisages negotiations in the new round on investment, government procurement, trade facilitation, and continuance of the work programme on electronic commerce as well as the continuation of a moratorium or standstill on customs duties on electronic transmissions (a standstill that ceased with the collapse of the Seattle meeting), and for continuance of the ‘study programme’ on competition policy. It also views as ‘premature’ to include trade and environment in the forthcoming negotiations, but cautions against labour standards being included in the negotiations.

Several of the formulations and positions reflect the viewpoints that were sought to be advanced at Seattle by Erwin as a compromise, namely for continuing the ‘study programme’ on the Singapore and Geneva ‘new issues’, but for an automatic upgrading of these issues into negotiations 2-3 years later.

At a recent meeting in Kuala Lumpur (jointly sponsored by the WTO and UNCTAD’s division on investment), of Asian countries, participants said the opposition to any investment negotiations at the WTO from capital - based officials who attended the meeting, was much stronger and louder than at WTO here.

The Egypt-South Africa draft for next week’s meeting, presents the WTO as at the centre stage in an evolving system of global economic governance and global governance being at the heart of ensuring the progrssive development of the global economy as a whole, and of globalization and rapid technological development establishing new dynamics for trade and investment not foreseen or well understood during the Uruguay Round and that the new challenges require further strengthening of global economic governance to manage the diverse consequences of globalization.

In terms of modalities for new multilateral negotiations, the Egyptian-South African draft calls for a “broad and balanced agenda” (code words that the EC has been using since before Seattle), and repeats the argument of a broad-based agenda permitting trade-offs that would serve the developing country interests and supporting the principle of “single undertaking” that would force all participants to adopt the results of all the negotiations.

On the ‘so-called implementation issues’, the draft says, some may be addressed through clarification, while others would require renegotiation.

It also speaks of pursuing the ‘democratic future’ of the WTO through the ‘one-country, one-vote’ system, but “this principle must not be allowed to affect the efficiency and effectiveness of the negotiating process” - a set of code words for the continuance of ‘green room’ consultation processes (that the Africans repudiated at Seattle).

The Egypt-South Africa draft says: “Both formal and informal solutions must be found to guarantee the ‘ownership’ of the WTO growth and evolution processes by developing countries and, parallel to negotiations on substance, discussions on means of avoiding marginalisation of many developing countries in decision-making.

The Egypt-South Africa paper calls for strengthening the anti-dumping agreement to reduce the scope and potential for abuse and harassment, but that it is necessary “politically” and for genuine dumping reasons to retain anti-dumping as an instrument of trade policy.

It also stresses the subsidies agreement as highly prejudicial to the interests of developing countries, and calls for a review of the appropriate Uruguay Round Agreements

Under TRIPS, it calls for clarification to ensure protection of bio-diversity, food security and access to essential drugs, precise modalities for non-violation complaints.

On the mandated negotiations, the Egypt-South Africa paper views the mandated GATS negotiations in terms of developing countries not being demandeurs, and thus looking for trade offs in other sectors, such as agriculture.

In Agriculture, it seeks tariff reductions, viable market access quotas, substantial reductions of domestic and export support by developed countries, commitments to reduce production-related support, S&D for developing countries, elimination of export subsidies and any subsidization as part of export credits.

Among the new issues, the paper calls for negotiations on investments, with a GATS-type approach (of a positive list of investment commitments), transparency, investor protection through inter-governmental dispute settlement procedures, flexibility to countries to limit and set conditions on right of establishment, MFN, market access and national treatment, permit appropriate performance requirements, and discipline incentives that distort investment flows.

On competition policy, it wants continuation of ongoing ‘educational’ process, and for its intensification. It supports an agreement on transparency in government procurement, with a multilateral agreement in the form of non-binding guidelines not subject to dispute settlement mechanism.

While favouring trade facilitation, and improving security and predictability for traders, the paper suggests that these not be addressed by binding WTO commitments subject to dispute settlement.

It calls for the continuation of the standstill on customs duties on electronic commerce and continuation of the work programme. – SUNS4871

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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