WORLD TRADE
ORGANIZATIONWT/L/317
1 October 1999
(99-4081)
Original:  English
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
SADC Ministers’ Agreed Negotiating Objectives for the
Third WTO Ministerial Conference
Communication from South Africa
The following communication, from the Southern African Development Community, was
received from the Permanent Mission of South Africa with the request that it be circulated to
Members.
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1. Ministers of Trade, representing the Member States of the Southern African Development
Community (SADC)1, met in Cape Town South Africa, 3 September 1999, and agreed on common
negotiating objectives for the third WTO Ministerial Conference to be held in Seattle in
November 1999.  These objectives were brought to the attention of the African Trade Ministers, in
their meeting in Algiers, 24 September 1999.
2. SADC Ministers strongly expressed the view that a key challenge confronting the multilateral
trading system is to ensure that issues of development are addressed decisively. A strategic objective
for SADC, therefore, is that developed countries should also undergo far reaching structural
adjustment in their economies.  Such restructuring requires reducing a range of protective and supportmeasures to inefficient "grandfather" industries and sectors in industrial economies and thereby allow
the relocation of production and investment to developing  countries, including to the SADC region,
which possess comparative advantages in these areas. Such structural adjustment would boost
production and trade in SADC and other developing countries, promote their industrialisation and
development, enhance South-South trade, and provide an impetus to a new round of global economicgrowth. The Ministers,  therefore, called for a fundamental re-thinking of the structure and challenges
facing the world economy as we launch new multilateral negotiations. The specific proposals of
SADC should be seen in this context.
3. SADC Ministers of Trade view the third WTO Conference, and the new multilateral trade
negotiations which are expected to be launched at Seattle, as a significant opportunity to pursue thiscommon objective as well as of integrating the Southern African regional economy into the global
trading system in a more sustainable and beneficial manner. SADC Ministers also reaffirm their
commitment to conclude a SADC free trade agreem ent, which will deepen processes of regional
economic integration and promote regional development. It is recognized that regional economic
integration in Southern Africa would establish the necessary prerequisites to reverse marginalizationand promote the region's integration into the globalizing world economy.
                                                     
1 Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique,
Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe.WT/L/317
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4. In considering the formulation of a common SADC approach, Ministers agree that the new
negotiations must be based on a balanced agenda accommodating the concerns and interests of SADC
Member States. SADC countries, therefore, consider that a broad-based round, which would permit
trade-offs among issues, would be more consistent with its concerns and interests.  SADC Member
States are at varying stages of development, and include developing, least-developed, smalleconomies as well as landlocked and small island states. It was agreed that the new negotiations
should aim to strengthen the rules-based trading system and promote international trade, and that
sufficient attention should be devoted to ensuring degrees of flexibility to accommodate constraints
faced by the developing countries.
5. Agreements, rules and disciplines that emerge from the negotiations should: (i) support efforts
for strengthening supply capacities; (ii) provide flex ibility in the use of appropriate policy instruments
to enhance the process of structural transformation of their economies; (iii) improve market access forproducts of export interest to them; and (iv) advance their regional integration objectives.
6. The meeting took into account technical inputs emanating from: (i) SADC Geneva-based
delegations; (ii) the Ad Hoc Preparatory Meeting of Trade Negotiations for Seattle WTO Ministerial
Conference (Addis Ababa, Ethiopia); (iii) th e Workshop on Developing a Proactive and Coherent
Trade Agenda for African Countries in Support of their Participation in International TradeNegotiations (Pretoria, South Africa); and (iv) the Coordinating Workshop for Senior Advisers to
Ministers of Trade in LDCs in Preparation for the Third WTO Ministerial Conference (Sun City,
South Africa).
Special and differential treatment7. In the view of SADC, Special and Differential Treatment (S&D) should be firmly established
in the Seattle Ministerial Declaration. The objective of S&D is to assist developing countries and, in
particular, least-developed and small economies to overcome inherent handicaps which prevent them
from deriving meaningful benefits from their part icipation in the multilateral trading system (MTS)
and to correct  imbalances in the rights and obligations contained in the Agreements. Best endeavourprovisions in WTO Agreements should be defined  to insert greater clarity and specificity so that their
implementation could be made contractual, and permit verification of their implementation.
Additional elements could be introduced relating to the continuation of non-reciprocal preferences;
transfer of technology; use of economic indicators to replace arbitrary time periods; cultural integrity;
and technical and financial assistance for capacity building.
8. The effective implementation of WTO commitments by SADC countries continues to be
hampered by the lack of adequate financial, institutional and technical capacities, and thesedifficulties would  be exacerbated by the need to divert resources to participate in multilateral trade
negotiations. The transitional periods in the multilateral trade agreements (MTAs) should be
extended. Due restraint should be exercised by developed countries in initiating disputes against
developing countries while the negotiations are underway. In addition, developed countries should
maintain current access conditions, including preferential access, for the duration of the negotiations(standstill).
9. There is a need to highlight the importance of technical cooperation. In this regard, SADC
countries emphasize the need to  renew the commitm ent to technical cooperation, increase the regular
budget, increase dedicated human resources for technical assistance, and improve the coordination in
the delivery of technical cooperation.WT/L/317
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Agriculture
10. The development of the agricultural sector in S ADC countries is crucial to their trade growth,
employment, social cohesion and environmental protection. The continuation of the reform process
must lead to improved access to world markets for all SADC agricultural exports (primary andprocessed products), which can be achieved through an elimination of tariff escalation and reduction
of tariff peaks; increases in tariff rate quotas which preserve and enhance the access rights of SADC
countries including under the commodity protocols of, or appended to, the Lomé Convention;
reductions in domestic support in the developed countries; and the elimination of export subsidies
which displace agricultural exports of SADC countries or impact negatively on their domestic
production.
11. The obligation to formulate disciplines on export credits, as stipulated in Article 10 of the
Agreement on Agriculture is unfulfilled. Members should agree in Seattle to fulfill this commitment.
12. The specificities of small economies, including small and land-locked and island states,
should be given due attention and accommodated in new negotiations in agriculture.
13. SADC notes the wide diversity of agricultural systems obtaining in the Member states and
recognizes the importance of addressing those issues which are vital for developing countries,especially LDCs, small developing economies and small island developing countries which
encompass, inter alia , food security and the development of rural areas taking into account inherent
difficulties and constraints to diversification.
14. The existing imbalances in the Agriculture Agreement should be corrected by allowing
developing countries greater flexibility in domestic support commitments to increase production so asto ensure food security, and to introduce targeted measures to protect the livelihood of small farmers.
This could be achieved through, inter alia , the possibility of producer funded schemes being covered
by Annex II; flexibility in the use and extent of de minimus provisions; and broadening of the scope
of Annex II.
Fisheries
15. Fisheries products are exhaustible natural resources which can be depleted without proper
management. There is also a need to address the negative impact on SADC countries of subsidies,
sanitary and phytosanitary standards and other technical barriers to trade raised by the developed
countries in the  fishery sector. The sustainable utilisation of marine resources should be carried out,
in the main, by those developing countries in their waters.
SPS and TBT
16. Sanitary and phytosanitary standards (SPS) are becoming increasingly significant barriers to
the agricultural exports of SADC countries. Exports from developing countries should not be required
to meet standards more stringent than internatio nal standards. The technical assistance and S&D
provisions of Article 9 and 10 of the SPS agreement should be made fully operational and given
contractual status.  A decision to this effect should be taken at the Seattle Ministerial Conference.
LDC issues
17. SADC countries remain deeply concerned over the marginalization of LDCs and certain small
economies, compounded by chronic foreign debt.  SADC countries seek to highlight these concerns as
they shape the context within which forthcoming multilateral trade negotiations take place.WT/L/317
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18. Developed countries should extend bound, duty free treatment to all products originating from
LDCs. Applicable rules of origin under these arra ngements should be simplified and tailored to the
industrial capacity of LDCs. A Decision to this effect should be taken at the Seattle Conference.
Developed countries should also make the necessary financial commitments for the Roundtables to
effectively implement the integrated initiative for LDCs, including promotion of foreign investment in
LDCs.
19. Developing countries in a position to grant market access to LDCs should state their intention
to do so at the Seattle Conference.
20. A further decision should be taken at the Seattle Conference to translate the Ministerial
Decision concerning the possible negative effects of the reform programme on LDCs and net food
importing developing countries (NFIDCs) into concrete measures. A mechanism should be
established to ensure that whenever food prices exceed a particular ceiling or whenever domestic foodproduction drops below a certain threshold, the required food imports are made available at
concessional prices. WTO Members, particularly major agricultural exporters, should make technical
and financial assistance available to NFIDCs to improve agricultural productivity.  Improved market
access for exports from NFIDCs should be given priority in future trade liberalization.
Small developing economies
21. The SADC region consists a number of small developing economies which are either islands
or land-locked states.
22. The WTO should recognize the specificity of small developing economies and the difficulties
encountered by them in integrating into the world economy.  The WTO should adopt positivemeasures to address the special need of small economies.  As a matter of priority, the WTO should
elaborate a vulnerability index (drawing from the work already done in this context by the
Commonwealth, World Bank, UNCTAD and other international institutions) to determine the
eligibility criteria for classification of small and vulnerable developing economies.
Services
23. The negotiations aimed at progressive liberalization of trade in services should respect both
the existing architecture of GATS and the flexibility provided to developing countries under Article
XIX, including the principle for granting credit for autonomous liberalization since previous
negotiations as provided for in this Article.
24. Article IV of GATS should be strengthened and made fully operational. The commitment to
provide liberalization of market access in sectors and modes of supply of export interest fordeveloping countries should be respected, notably by improving the commitments on the movement
of natural persons. SADC Members would seek gr eater access to technology, distribution channels
and information networks to promote their se rvice sector development and would seek the
establishment of an emergency safeguard mechanism before the end of the next round of services
negotiations.
25. There is also a need to address the problem of anti-competitive practices which affect the
services trade of SADC countries, either throug h strengthening Article IX of GATS or through
specific sectoral disciplines.
26. Electronic commerce, which should be seen as largely a GATS issue, has greatly enhanced
the relevance of the cross-border mode of supply of services, and its impact on the existingcommitments should be examined. The rise of electronic commerce has made the implementation ofWT/L/317
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the commitment under Article IV to provide developing countries with improved access to technology
and information networks vital to their increased participation in world trade in services.
27. SADC countries support the continuation of the work programme on electronic commerce as
defined in the Geneva Ministerial Declaration.  They call for technical assistance for the building of
telecommunication infrastructure and training in orde r to enable SADC countries to participate and
benefit from electronic commerce.  Possible extension of the standstill on the non-imposition of
customs duties on electronic transmissions should be accompanied by the availability of technical
assistance.  Any such extension should be without prejudice to the outcome of the work programme
on e-commerce.
Anti-dumping
28. SADC countries support proposals aimed at strengthening the Agreement on Anti-Dumping
to prevent abuse and harassment. The commitments to take account of the special situation of
developing countries and explore constructive remedies before applying anti-dumping duties should
be framed as specific contractual obligations.
29. Aspects of  particular interest to SADC countries include improving the methodology of
calculation of dumping margins, standing, sufficiency of evidence to initiate investigations andcumulation of injury, and exemption of imports from LDCs  from anti-dumping measures. Simplified
procedures for taking anti-dumping action should be devised for the use of LDCs. When anti-dumping
margin is calculated, the lesser duty rule should be applied in the case of developing countries.
Subsidies30. The imbalance in the agreement on subsidies and countervailing measures (SCM) should be
redressed to take into account the important role subsidies could play in the development process of
SADC countries.
31. Non-actionable categories of subsidies should be expanded to include subsidies for
development, diversification and upgrading of industries (development box). Guidelines contained inAnnex II and Annex III should also be revised to take into account business realities in SADC
countries. The definition of inputs consumed in the production process (footnote 61) needs to be
expanded to include all inputs.
32. SADC countries  support the proposal that the list of countries in Annex VII of the SCM
Agreement should be expanded to include the low and medium income countries as defined by the
World Bank. More flexibility would be required in Article 27 of the Agreement to enable developing
countries to embark on programmes of economic diversification and industrial development (Article27.1 and 27.2) to allow them to apply freight rebate schemes and measures to reduce costs of
marketing exports of industrial products.
TRIPs
33. The review of the TRIPS as foreseen in Article 71.1 should take into account the
implementation experience gained by developing co untries and address imbalances in the rights and
obligations of the users and IPR holders with a view to accommodating technological and public
policy objectives.  However, the review envisaged under Article 71.1 of the TRIPS Agreement will be
taking place before the implementation of TRIPS by developing countries and the LDCs which will
commence in 2000 and 2006, respectively. The review will also coincide with the broader round ofmultilateral trade negotiation in 2000 in which TRIPS issues are likely to form part of the built-in
agenda. Under these circumstances, the review should be delayed.WT/L/317
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34. In order for developing countries to fully im plement the TRIPS Agreement, the technical and
financial assistance foreseen in Article 67 should be provided.  The transitional period should
therefore be extended and its duration  linked to the adequacy of the resources required to meet the
challenge.
35. The review of Article 27.3(b) should retain the flexibility and option available to member
countries for the protection of plant varieties including through a sui generis system. The review
process should seek to harmonize Article 27.3(b) with  the provisions of the Convention on Biological
Diversity and the International Undertaking in which the conservation and sustainable use of
biological diversity.  African countries thus co uld propose that the exclusion of patentability of
essentially biological processes should be extended to microbiological processes.
36. The additional protection for geographical indications should be extended under Article 22
and 23 to include products of interest to SADC coun tries.  In this regard, the TNF mandate should be
extended to make an inventory to enable SADC count ries to make full use of the provision of Article
22, and 23.
37. SADC countries agree that Ministers should take a decision at Seattle to extend the
moratorium on the application of the non-violation  provision, under Article 64.3 of the TRIPS
Agreement, which expires 1 January 2000, until members agree by consensus that sufficientexperience has been gained with the application of the Agreement. The provisions for incentives by
developed countries for the transfer of technology to LDCs contained in Article 66.2 are mandatory
and therefore should be implemented.  Developed countries should indicate how they intend to fulfil
the provisions of this Article.
38. SADC countries agreed that there is a need to remove restrictions on the products listed by
WHO as essential drugs so as to realise the objectives of affordable and adequate health care. There is
a need for the relaxation in exclusive rights of the patent holders in respect of the drugs listed as
essential by the WHO.
Rules of origin39. Non-preferential product specific  rules of origin in products of export interest to SADC
countries currently being negotiated in the context of the WTO Agreement on Rules of Origin should
be tailored to promote the SADC participation in global production chains and the marketing of their
products.
Industrial tariffs
40. It is the assessment of SADC countries that industrial tariffs will form part of the new
multilateral negotiations. Therefore, SADC countries should identify those tariffs which particularly
restrict their exports of industrial products so as to formulate requests which would also cover product
specific NTMs.  Agreement to engage in industria l tariffs negotiations should be conditional on a
clear demonstration at Seattle of commitment of developed countries to provide meaningful market
access for exports from developing countries and particularly to eliminate protection for industries forwhich SADC countries possess comparative advantage
Trade facilitation
41. SADC countries recognise the overall benefits of trade facilitation and would seek to improve
customs procedures and administration  to reduce transaction costs. They also acknowledge  that theprocedural and administrative problems  they confront could not be solved by establishing multilateralWT/L/317
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disciplines. A vast effort in technical assistance and capacity building was needed to support national
reform efforts, including institutional, infrastructure and human resource development.
Transparency in government procurement
42. SADC countries support the principle of transparency in government procurement.
Commitments to transparency  should not add to th e already heavy  financial, institutional    and
administrative burdens borne by developing countries. Measures to improve transparency should in no
way compromise the balance of rights and obligations in GATT as a disguised effort to achieve
market access goals. Any multilateral arrangement in this area should be in the form of non-binding
guidelines that are not subject to the dispute settlement mechanism. Domestic or regional review
mechanisms should be employed for any dispute which may arise. On transparency in government
procurement, any decision should not impinge on the freedom of SADC countries to use governmentprocurement practices to address domestic development concerns nor erode their rights under GATT
Article III:8(a).
Investment and competition policy
43. SADC countries can support the proposals  of other developing countries to extend the
transitional period of the phase-out of prohibited TRIMs and the need to preserve policy space for
developing countries in future negotiations.  The Working Group on Trade and Investment should
continue to carry out its mandate with greater focus on the development implications, taking into
account the proposals which have been submitted in the preparatory process,  and the four elements of
a starting point as adopted by the OAU/AEC Conference of Africa Trade Ministers, in Harare in1997. These  include  the development dimension, ex clusion of portfolio investment, use of WTO
mechanisms such as positive list of GATS, explicit linkage to a similar framework on competition
policy, as provided in Article 9 of the TRIMs Agreement.
44. SADC countries have an interest in discip lining the activities of TNCs and mitigate the
damaging effect of mergers.  The Working Group on Trade and Competition Policy should continueits work to examine  such matters as the development dimension and the relationship between TRIPS
and Competition Policy.  SADC countries should give priority to the establishment of legislation and
institutions to enforce competition law and policy.
Trade and environment
45. SADC countries attach importance to the ongoing discussions in the Committee on Trade and
Environment with a view to resolving the issues related to interface between trade and environment
policies.  They are of the view that it is premature to include the issue of trade and environment in the
forthcoming negotiations. They invite Geneva-based SADC representatives to work on the issues in
this area and advise the SADC member States at Seattle accordingly.
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