Trade talks overshadow India, Brazil, SA meeting

The struggling global trade negotiations are looming large over a South Africa-India-Brazil summit this week, after the United States said the developing countries were putting the talks in peril by refusing to open up their manufacturing markets.

The three countries, all regional powerhouses, came together around 2000 to strengthen ties between developing countries and to form a powerful bloc to protect fledgling economies from more competitive ones in the West.

The global trade talks may not be on the official agenda of their summit in Pretoria on Wednesday, said Philip Alves of the South African Institute for International Affairs, “but it’s uppermost in everyone’s minds”.

Efforts to liberalise manufacturing trade have hit a rough patch less than a month after the US breathed new life into the trade talks by agreeing to limit trade-distorting farm subsidies to a range between $13-billion and $16,4-billion.

The round aims to add billions of dollars to the world economy and lift millions of people out of poverty through free trade.

But it has repeatedly stalled since its inception in Qatar’s capital Doha in 2001, largely because of wrangling between rich and poor nations over eliminating farm subsidies, and more recently, barriers to manufacturing trade.

Roberto Azevedo, the Brazilian Foreign Ministry’s top trade official, said Washington was threatening the world’s poorer countries with a “take it or leave it” ultimatum and that it was seeking to divert attention from its unwillingness to accept significant cuts in farm subsidies, six years into the talks.

Dot Keet, a Cape Town-based independent trade and international affairs researcher, said that international trade was still heavily skewed in favour of richer developed countries.

Keet said the US was offering to make marginal concessions in the agricultural sector and in return wanted developing countries to go much further in opening up their manufacturing industries, which were vital to their economies.

“Developing countries have not been offered enough to convince India, Brazil, China and South Africa there will be some reform,” she said.

At a briefing ahead of the summit, Foreign Affairs Department official Jerry Matjila said South Africa and its partners were committed to the talks and that while it was not the focus of the meetings, the countries would discuss ways to ensure they were a success.

However, he said while Brazil, India and South Africa were willing to show flexibility in terms of access to their industrial markets, further concessions were required from the EU and Washington.

“It is really a delicate balancing act,” Matjila said.

Cracks are beginning to appear in the united front of India, Brazil and South Africa as they come under pressure from the US and the EU.

Keet said that in pursuit of their trade interests and the World Trade Organisation agenda, developing countries have been increasingly concluding bilateral and regional agreements.

“They feel that if they tackle countries individually they might have more success,” Keet said. “It is the old-fashioned approach of divide and rule.”

Some developing countries are starting to breaking ranks with Brazil, India and South Africa, making their own proposals that support a reduction in manufacturing tariffs.

Such cuts would affect South Africa and its vulnerable textile and automotive industries, more than India and Brazil because of the way their economies are structured, Alves said.

“South Africa is making a logical sensible argument,” Alves said.

“But the big question is if India starts softening and Brazil does the same, what kind of pressure will South Africa come under in the next couple of weeks?”

Part of the reason the Doha round has sparked such fierce and prolonged debates is that the final treaty must be agreed by consensus and will be legally binding on all countries.

The latest disagreements aside, the talks are troubled.

“Even if you get more movement, it is still a very long way off of getting a final resolution,” said Alves. ‒ Sapa-AP

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