WORLD TRADE WT/MIN(96)/ST/114
12December 1996
ORGANIZATION(96-5298)
Original: English MINISTERIAL CONFERENCE
Singapore, 9-13December 1996
SOUTH AFRICA
Statement byH.E. Mr.AlecErwin
Minister ofTrade andIndustry
TheDirector-Generalstartedhisopeningremarksbysayingthatthisisaveryimportantmeeting.
Mycountry would liketostartourstatement withthesame words.
Iamsurethatourgracious andverywellorganized hosts, theGovernment ofSingapore, will
understand thisandaccept thatourthanks fortheir hospitality follow thisstatement. Asanew
democracy, asaneconomy andsociety inprofound transition andasanAfrican country, thismeeting
isveryimportant. Thefuture ofourdemocracy, theprocess ofreconciliation tobuild onenation and
theyearning ofourpeople forabetter lifedepend onoursocio-economic success.
Thedecisions ofthisMinisterial Conference andthedirection inwhich theysteertheWTO
willhaveaveryrealimpact onthose prospects forsocio-economic success. ThisiswhySouth Africa
haspaidsuchclose attention totheWTO andwhywearedetermined, within thepossibilities ofour
limited capacity, tomake apositive contribution totheoutcome ofthisMinisterial Conference.
South Africa hasbeengiven thehonour andresponsibility ofbeing President ofUNCTAD.
AtMidrand UNCTAD IXwasunder pressure toreform. Itdidthisbyaccepting thattherealities
ofglobalization required aneffective concept ofpartnership between countries atdifferent stages of
development, between North andSouth andbetween governments andthecomponents ofcivilsociety.
Along withthiscame acommitment todialogue, increased understanding ofthediffering conditions
facing nation States andtheneedtoaccommodate suchdifferences.
Thisrequires aneffective andfacilitatory Secretariat thatcanrespond toneeds andenhance
dialogue andpartnership. TheSecretary-General ofUNCTAD isachieving thistask. Inshort we
areattempting -withsuccess, tochange mind-sets, tore-focus activity andtorespond torealities and
notpreconceptions orstatic positioning.
ItisSouth Africa 'ssubmission thatitisnotUNCTAD alone thathastomake thischange.
Itisachallenge forallmultilateral organizations. There arenecessary changes ofmind-sets within
theWTO aswell. TheGATT started outasasmall, self-selected andprobably elitegroup oftrading
nations. Inevitably itgrew insizeandmore developing countries entered theGATT. In1964 the
UNCTAD initiative offered bothgreater scope fordeveloping countries tobeheard butalsothepotential
fortension between GATT andUNCTAD.
Astradeingoods andservices grew, cross-border investment expanded andtechnology unified
ourfinancial services andknowledge basetheemerging realities ofwhatwould becalled globalization
ledtotheUruguay Round andtheWTO.WT/MIN(96)/ST/114
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TheWTO therefore isnottheinitiator ofglobalization butaneffective response toglobalization.
Itisagreat achievement thattheWTO isnolonger anelitegroup butitisthehome forthetrading
nations oftheworld. Moreover, itsMembers havechosen toconduct crucial economic activities within
asetofrules. Thisisanacknowledgement thattradeandtherapidchanges ininitiatives around finance,
services andtechnology, tomention afew,cannot beleftuntomarket forces alone -ruleshavetobe
setandcomplied with.
Thisisanimportant newsituation thatisnowsome twoyears old.FortheWTO Ministerial
Conference thisposes newchallenges astohowweproceed tounfold thebuilt-in agenda andaddress
newissues.
Since globalization increases thelinkages between usthenitfollows thattheconsequences of
ourdifferent abilities toparticipate inthisprocess mustbedealtwith. Trade andinvestment areboth
shaped byandthemselves shape theoverall development ofanational economy. These national
economies differ intheirendowments, historical development andhowtheirgovernments overthe
years havemanaged those economies.
These complexities define thestarting points forhoweasily countries canparticipate inand
comply withtheWTO. Thatthere areverystarkdifferences between economies ismanifestly clear.
TheUnited States, Canada, European Union, Japan, China, Hong Kong, Chinese Taipei, Republic
ofKorea, Malaysia, Singapore andThailand between themaccount forabout 80percentofbothexports
andimports in1995. Itis26countries thataccount forthislargeproportion ofworld trade. Formany
ofthem theirtrading prominence isrelatively recent. There willbeshifts inthetrading patterns and
there isparticular growth inLatin America.
Thequestion thatarises outofthisquantitative domination oftradebyrelatively fewcountries
iswhether thereisariskoftheWTO becoming adefactoselect group oftrading countries onceagain.
Thismustnotbeallowed tohappen. Iftradeliberalization istobenefit growth anddevelopment
thenitmust beaninclusive process andnotexclusive either forcountries orforparticular citizens
within acountry.
How dowe,therefore, balance theclear needforrules withthefactthattheplayers areof
unequal strength? Thiscanonlybedone byacknowledging andclearly understanding thatthere is
bothgreatpotential inglobalization forgrowth anddevelopment andpotential dangers ofmarginalization
formany. Wemust jointly evolve ways toaddress thisreality.
Wewillnotdothisifourmultilateral organizations, working intheirclearly defined areas
ofcompetence donotwork together. IftheWTO becomes theterrain ofthestrong andUNCTAD
thedefensive shield oftheweak thenwedestroy apartnership forgrowth, development andtrade.
Thereality isthatthese twoorganizations canwork together andindoing soenhance their
work. Distrust bydeveloped countries ofoneandbydeveloping oftheother isnotuseful. Itonly
encourages lessthanfrank negotiations. Itinevitably iscause foraself-fulfilling prophecy. Mutual
distrust leads toconduct thatconfirms inpractice thebasis fortheoriginal mistrust.
Wecannot afford thisandaconcerted effort mustbemade andmade continuously toencourage
thecooperation between WTO, UNCTAD, theILO,UNDP andtheBretton Woods institutions. This
doesnothavetobedonebythecreation ofelaborate organograms andstructures ofcooperation. It
must bedoneonthebasis ofneedandthecomplementarity ofavailable resources.WT/MIN(96)/ST/114
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ForSouth Africa, themassive human expenditure indebating "core labour standards" is
misplaced. Thebulkofworld trade takes place between countries where labour standards arehigh.
Thereasons fordiffering coststructures inaneconomy arecomplex andtoascribe them tolabour
standards alone willinevitably become protectionist. Forced labour andchild labour arenolonger
thebasis foranynations trade. Where these existtheymustbespecifically addressed. Core labour
standards arethelegitimate aspirations ofworkers andhavebeenwidely endorsed inallsocieties, they
mustbefurther promoted. TheILOdealswiththeestablishment, monitoring andenforcement oflabour
standards anditundertakes alarge amount ofwork related tolabour relations andtheadvancement
ofsocio-economic equity.
TheWTO deals withtrade andinevitably withwider issues ofinvestment andcompetition
thatariseoutoftheprocesses ofglobalization. Theprocesses impact onlabour andgenerates changes
inlabour markets. Thisisaself-evident factthatvirtually every government continually grapples with.
TheIMFtellsgovernmentsasamatterofeconomicorthodoxythatflexiblewages,willattractinvestment,
which willpromote trade which willinturnsolve balance ofpayments problems. DowetelltheIMF
tokeepoutoflabour issues? Nowedonotbecause thelinkisaneconomic link. Butsince theIMF
doesnotreally talktotheILO,theircompetence inlabour markets islowandtheiradvice notalways
good. TheIMFcontinuously advises ontariff policies -isthatnotaWTO concern?
Wemustnotlosesightofpracticalities. Eachmultilateral wasestablished because there was
aneed andacompetence hasbeen built toaddress thatneed. There must becooperation and
consultation. ItisSouth Africa 'sview thatthisfailure tocooperate isaprime reason forthevery
lowsuccess rateofthemultilateral organizations inpromoting development.
However, wemustnotbeunderstood toimply thatthelackofdevelopment iscaused bythe
multilaterals. There arebarriers -particularly inLDCs -thathave tobeaddressed tofacilitate
development. Butnational governments havetoassume responsibility forfacilitating theprocess.
Thisisnotaneasyprocess. Itisaverydifficult process.
Each country charts itsownwayforward. Many developing countries aresucceeding andin
themain through theirownefforts inutilizing outside support andengaging withtheglobal flows of
trade andinvestment.
There canbelittledoubt thattechnology nowplays animportant role. Itoffers suchrich
opportunities sinceitcanbedefused attheknowledge levelmore easily thaneverbefore. Thechallenge
istoharness thisknowledge intotheprocess ofgrowth anddevelopment inthenational economy.
Thiscannot ingeneral bedone from outside, itrequires internal strategies andpolicies thatare
implemented withconsistency. Thetruth ofthematter isthatgovernments cannolonger beonly
regulators orspectators ofeconomic processes. They havetobeintelligent facilitators of,andefficient
participants in,economic efficiency andeffective social delivery. Clean andtransparent governance
iswhattheyowetheircitizens butitwillalsofacilitate trade andinvestment.
These changes willanddorequire investment andFDIplays acrucial role. Whilst theflows
ofFDIarenotdominant inorders ofmagnitude tototalinvestment, inthecaseofLDCs theyareclose
tobeing decisive. FDIbrings technology andmarkets andatpresent domestic resources areinadequate
orconsumed bydebtservicing. FDIisalsocrucial formost developing countries since itaccesses
markets andtechnology evenifagood domestic capacity forresource mobilization exists.
Itwould seemthattoenhance FDIflows themessage isclear-developing countries mustform
theirowneconomic cooperation zones. Thisisnecessary foranumber ofreasons. Thefirstisthat
itwould appear thatacritical massofinvestment possibilities isnecessary todivert significant investable
funds outoftheglobal streams. Secondly, thelowintra-developing country trade andinvestment isWT/MIN(96)/ST/114
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detrimental togrowth anddevelopment inthose countries. Ithastheeffect ofcreating trading enclaves
anddoesnotmaximize comparative advantage, particularly inAfrica, where political boundaries do
notcoincide withgeo-economic possibilities.
LetustakethecaseofthenewSADC Trade Protocol. InthiscasewehaveSouth Africa (an
economy intransition) combined withdeveloping andLDC status countries. Atstake iswhether a
grouping ofsuchcountries cancreate asynergy thatallows thewhole tobegreater thantheparts.
Itisessential thattheWTO assists thiseffort anddoesnothinder itbywayofblind application
ofrules. Wehavetobegin aserious dialogue onhowdeveloping countries linkwithLDCs inmutually
reinforcingregionaleconomiccooperationarrangementswithoutmakingtheWTOaseriesofexceptional
regional agreements.
Current attitudes bydeveloped economies tomarket access forLDCs arewrong. Weneed
torecognize thattheLDCs donotatpresent constitute aneconomically destabilizing factor forthe
developed economies, evenifmarket access weredramatically improved. Itisnotenough fordeveloped
countries topoint tothepolitical realities oftheiragricultural andtheirother sensitive sectors. We
havetriedtoillustrate theimmense socio-economic andeventual political changes thedeveloping world
mustmake totrytoengage withglobalization. Thedeveloped world mustdothesame. Itisself-seeking
andultimately short-sighted forthedeveloped countries toplead allsorts oftechnical andpolitical
reasons fornotdismantling agriculture subsidies orfailing toratify labour standards yetaskthe
developing world toagree tomultilateral agreements thatrequire fargreater socio-economic andpolitical
change bydeveloping countries andinparticular theLDCs.
South Africa hasnotsaidmuch onthespecific issues thatarebeing discussed inthisMinisterial
Conference. Bynowwehavehadoccasion tostatethose views onmany occasions.
However, webelieve thatwe,inSADC, havetaken averyimportant stepinagreeing ona
broad common framework inourapproach tothisMeeting. Tanzania inspeaking onbehalf ofSADC
haveablysetoutthese positions.
Inthisstatement South Africa hasfocused more ontheneedtocooperate andcreate areal
partnership offunctions through pragmatic working relations. Webelieve thiswillhavetheadded
advantage ofsaving timeinfuture meetings sothatwecangetdown torealistic advances inthevital
work oftheWTO.