SA seeks ‘flexibility’ from Doha trade talks

South Africa is resisting further trade liberalisation in the ongoing multilateral trade talks. Tariffs in South Africa are among the lowest for developing countries, and as SA’s chief trade negotiator, Xavier Carim points out, South Africa has taken deep cuts as a result of the 1994 Uruguay round. The US and EU have turned down South Africa’s requests. Carim says that South Africa will not sign a trade deal that compromises industry.

South Africa is asking for 16 per cent of tariff lines to take a half-formula cut and 3 per cent of tariffs to be exempted from changes.

Developing countries are calling for a trade deal in the hopes that it might calm businesses struggling with the current financial crisis.

Ministers will meet December 15-19 before the WTO closes for the year; Carim was sceptical about the likelihood of SA avoiding further trade liberalisation.

But the most effective way to ensure that trade liberalisation leads to efficiency improvements is if a country removes its trade barriers against all countries. Trade is a positive sum activity; both trading partners gain, and the pursuit of the gain provides the motivation for exchange. Trade liberalisation allows goods produced more efficiently in other countries to enter SA to the benefit of all its consumers.

Source: Mathabo le Roux, SA seeks ‘flexibility’ from Doha trade talks, Business Day, December 8, 2008.

For text: http://www.businessday.co.za/articles/frontpage.aspx?ID=BD4A900780

For more issues on trade: http://www.freemarketfoundation.com/issues.asp?id=29

FMF Policy Bulletin/ 09 December 2008