Position Paper for World Trade Organization - NYC Model UN Conference 2009


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Position Paper for World Trade Organization - NYC Model UN Conference 2009

  1. 1. Delegation from Represented by<br />South Africa Amy Gemmel & Beatrice Soler<br />Position Paper for World Trade Organization<br />The topics before the World Trade Organization (WTO) are: Furthering Trade Facilitation based on the 2005 Hong Kong Ministerial Declaration; the Relationship between WTO Rules and Multilateral Environmental Trade Agreements; and the Role of Regional Trade Agreements in the International Trading System. <br />I. Furthering Trade Facilitation Based on the 2005 Hong Kong Ministerial Declaration<br />South Africa strongly disagrees with Annex C of the 2005 Hong Kong Ministerial Declaration, refuting the idea that in order to achieve a progressively higher level of flexibility and liberalization in trade that Member States should be forced into following the unrealistic objectives proposed at the Ministerial Conference. South Africa firmly believes that the guidelines agreed upon for the service sector, in Annex C are biased and discriminates against weaker States that look upon the LDC Modalities adopted by the Special Session of the Council for Trade in Services on 3 September 2003. South Africa’s economy has been driven by the service and industry sectors, which together make-up 97 percent of their Gross Domestic Product (GDP), and has grown at an annual rate of five percent. Recognizing that these sectors are also the livelihood of many of the developing African Union (AU) States, South Africa has actively pursued and negotiated agreements on trade and development in cooperation with the European Union (EU) and the United States (USA) in order to establish strong trade agreements. In order to facilitate greater trade with South America and Asia, South Africa has initiated a greater South Africa to Sub-Saharan African agreement in order to establish trade relations, via a free trade agreement with Brazil and India. South Africa’s participation in the Southern African Development Community (SADC), comprising of 14 sub-Saharan African States, allows access to a market of approximately 140 million people, market growth is projected an annual rate of around three percent. South Africa has negotiated a host of general trade agreements since 1994 as part of the process of normalizing trade relations with international trading partners. South Africa has also negotiated free trade agreements between the SADC and the EU (SA-EU Trade Development Co-operation Agreement) which allows for preferential access and lower tariffs between signatory States for specific products. South Africa actively pursues preferential trade arrangements in which other States unilaterally provide access to their markets through lower tariffs and increased or removed quotas, especially within the AU. The African Growth and Opportunity Act (AGOA), allows Africa States access to market opportunities through the Generalized System of Preferences (GSP) program. The GSP, a program designed to promote economic growth in the developing world by the USA, provides preferential duty-free entry for about 4,900 products from 132 designated beneficiary States and territories, including South Africa. This GSP program, authorized under the Trade Act of 1974 for a 10 year period, was instituted on 1 January 1976 and is currently authorized through 31 December 2009. <br />From the SA-EU Trade Development Co-operation Agreement, South Africa suggests the creation of “Trade for Aid.” Trade for Aid, another branch within the SADC, will act as a liaison between African developing States and all participating economically stable States. Trade for Aid, while maintaining the principles of the GSP system, will become a regionally based program offering aid in healthcare and education in conjunction with the Generation for Change and Growth (GCG) Organization. The program’s design will be regionally based and will assist trade facilitation and social improvement in unison with the African Growth and Opportunity Act (AGOA), the West African Development Bank (WADB), East African Development Corporation (EADC), and use the main principles of the General Agreement on Tariffs and Trade (GATT). With the help of these organizations and developed Member States, representatives from the designated region will work together to help facilitate the program. South Africa is prepared to donate .01 percent of the States’ 278 billion USD (GDP), and provide man power to ensure the creation of the Trade for Aid program. Similar to South Africa’s Reconstruction Development Program, Trade for Aid will improve living conditions which in turn assists expanding trade facilitation. Global cooperation and market access is needed to improve trade facilitation. The agricultural sector is projected as the driving force in SADC’s economic improvements.<br />II. The Relationship between WTO Rules and Multilateral Environmental Trade Agreements<br />South Africa, taking into consideration Article VI of the 1994 WTO Anti-Dumping Agreement, defines dumping according to Article VI of the 1994 GATT Agreement. Through one of the strongest multilateral environmental trade agreements, the African Growth and Opportunity Act (AGOA), imports increased 16 percent in 2006 to 44 billion USD in 2006. South Africa alone was responsible for two billion USD of the total imports. Growth opportunities and trade agreement available through the AGOA, allows South Africa to assert that the strongest proponent of multilateral trade is unlocking the growth and development potential of developing States. South Africa experienced an initial economic growth of six percent after adopting the Reconstruction Development Program (RDP). South Africa’s use of the RDP has successfully sustained or lowered taxes, reduced governmental debt by decreasing the national deficit, liberalized trade throughout the State, increased the 2000 balance of payments between two and three percent, maintained inflation rates less than ten percent, and attracted international interest. Also, in the year 2000, the ratio of Gross Domestic Savings to Gross Domestic Product (GDP) increased to 22 percent, while improving income distribution and reducing the budget deficit to below 4 percent of the GDP. The abolishment of barriers to trade such as tariffs under the General Agreements on Tariffs and Trade (GATT) provides South Africa a confidence that WTO agreements will be able to facilitate more than frustrate the structural adjustments for the developing States. However, both formal and informal solutions are needed to guarantee the growth and evolution process of developing States. Negotiations and discussions on the means of avoiding the marginalization of the many developing States in decision-making are necessary.<br />South Africa believes that developing entities need to pursue industrialization by processing natural resources, utilizing human resources, and by using their comparative advantage within each developing State. South Africa suggests the creation of a new committee: Modalities for Instituting New Trade (MINT). The MINT Committee will contribute to structural change in the geographic allocation of global production, establish the disciplines that level the playing field, address concerns and imbalances in existing multilateral agreements, extend and elaborate more effective provisions on special and differential treatment, extend disciplines to new forms and dimensions of trade in recognition of the increasingly integrated nature of the global economy. South Africa desires to achieve improvement on market access for all agricultural products with export potential. Moreover, improvements on fair trade conditions for import and export products, and a guarantee in rural development regulations are accommodated within the allowable range of WTO disciplines. South Africa encourages tariff reductions through viable market access quotas and the reduction in tariffs from bound rates. Substantial reductions of domestic tariffs and export supports by major developed countries along with retaining an adequate space for developing countries are needed. South Africa calls upon member states to take into consideration the technicalities of the MINT and to make commitments in capping production-related support measures, and eliminating export subsidies or any subsidization as part of an export credit, in the hopes of aiding the development of transparent and coherent disciplines for export credits. In order for a reduction in protective and supportive measures to occur, South Africa asserts that further aid is needed; moreover, assistance with developing States is needed in order for said States to undergo a restructure in economy allowing for a relocation of production and investment to developing States. Structural adjustment will boost investment, production and trade, promote industrialization and allow North-South, and South- South trade. New negotiations must be based on a broad and balanced agenda which accommodates the concerns and interests of all WTO Members. Broad-based negotiations, which would permit trade-offs that best serve the developing States’ interests, South Africa supports the creation of the MINT, and believes that said adaption by member States will yield a beneficial result to all members.<br />III. The Role of Regional Trade Agreements in the International Trading System<br />South Africa believes that this topic is by far the most essentially important topic brought before this WTO Committee. South Africa along with the members of the Southern African Customs Union (SACU) – Botswana, Lesotho, Namibia, and Swaziland, participated in negotiations with the United States to create a free trade agreement (FTA) in Pretoria, South Africa on 2 June 2003. Building upon the success of the African Growth and Opportunity Act (AGOA), SACU-FTA is the first of its kind in sub-Saharan Africa. Since the adaption of the SACU agreement member States have experienced a growth of 27 percent increase in trade arrangements between states. The SACU-FTA creates a comprehensive infrastructure for trade and investment bringing new opportunities for prosperity to the southern African states, further driving regional growth and development, and providing for a prosperous common economic future. For South Africa, the SACU-FTA presents an opportunity to build on the success of the AGOA by moving toward a jointly beneficial bi-lateral trade agreement/partnership with the United States. The SACU States have experienced 47 percent increase in non-fuel imports and as such are the leading AGOA beneficiaries in net trade. In particular, Botswana, Namibia, and Swaziland have reported increases in total apparel exports from 40 to 75 percent. Realizing that free trade is an opportunity to improve South Africa’s commercial competiveness and better position the nation on the global market, the SACU-FTA has also helped the country attract much needed new foreign direct investment (FDI). The SACU-FTA can also help drive economic integration into the southern African States and promote the goals of the New Partnership for Africa’s Development (NEPAD). The NEPAD offers an opportunity to further link trade, undertake poverty alleviating strategies and promote economic growth opportunity, intraregionally. The SACU States have established a special cooperative group designed to increase trade capacity, specifically for these negotiations. The U.S. Agency for International Development has allocated 2 million USD in start-up funds and as sign of mutual cooperation and commitment to increasing trade capacity in South Africa as well as the States in the SACU. <br />In a reversal of previous governmental policies aimed solely at benefitting only South Africa, South Africa now commits to cooperating in the needed agreements to foster increased regional, continental and international trade. Following the to the success of the SACU, South Africa believes that a continental trade organization, the African Customs and Trading Organization (ACTO) will promote all West, East and South African states to focus on lowering trade tariffs and assist developing countries. The ACTO board of directors will be comprised of an elected official representing each State. These officials will create a bi-annual forum for all States to discuss economic matters, such as, high tariffs, starving people resulting from agricultural insufficiencies, the current economic state, and the rapidly decreasing Gross Domestic Product plaguing all nations. South Africa calls upon fellow Member States to fully assist with the formulation of ACTO by fostering a FTA and by offering trade incentives to all participating States. South Africa has benefited from the FTA and NEPAD, in particular a six percent decrease in poverty and an eight increase in net exports. Furthermore, South Africa has joined The African Group Proposal and advocates the need to indentify trade facilitation shortcomings, decreasing transportation emissions, lowering communication costs, and increasing revenue collection. Integrating African enterprises is a key element in promoting the prosperity of African States (some of poorest in the world). South Africa urges all Member States, especially those African Member States, to recognize the benefits of the SACU and pursue whatever actions are necessary to become a member of ACTO. <br />