07 May 2004, Business Report

Johannesburg – South Africa, India and Brazil, all key members of the Group of 20-plus (G20+) developing countries, were vital parts of an emerging “third axis” in world trade that was trying to balance the negotiating power of the US and EU, a top Indian non-governmental organisation has said.

Pradeep Mehta, the secretary-general of the Consumer Unity and Trust Society, which has taken strong positions to try to prevent the abuse of developed countries’ trading strength, said this week that while India and South Africa shared common positions on many aspects of the World Trade Organisation (WTO) talks, there were some key areas where their positions diverged.

South Africa has a flexible approach to incorporating negotiations on the so-called Singapore issues – which include government procurement and investment – in the current round of WTO talks.

India is opposed to them being discussed at all until outstanding problems with the agreement struck during the Uruguay round are dealt with.

South Africa’s “flexible negotiating strategy” meant it often faced ‘awkward’ situations in the Africa Group in the WTO.

He gave the example of Doha in November 2000, when it was agreed that a new round of trade talks would be launched. “The entire African Group was against the new round and Singapore issues but South Africa supported both.”

In Doha, South Africa was not part of the Like Minded Group of developing countries, which was opposing a new round but had started coming round.

“At Cancun … the situation was different,” Mehta said. “South Africa not only led the G20+ alliance but also supported the cause of west African cotton growers.”

One of the reasons behind the difference in the positions of the two countries was that domestic political pressure meant India, the world’s largest democracy, had to take a “hardline stance”.

“Unlike South Africa, India has always given more importance to political diplomacy rather than its trading interests.”

Mehta said the emergence of closer three-way ties between India, Brazil and South Africa was important in light of the fact that there had been such poor progress in the multilateral trade talks under the WTO and the “growing problem of market access in North”.

“It is very essential to enhance the South-South trade,” he said, adding this would not only reduce the South’s dependence on North for its exports but would also help diversify exports and increase their negotiating power in trade talks.