LABOR LEADER WARNS ON DOHA

UNCLAS PRETORIA 003650 SIPDIS SIPDIS DEPT PLEASE PASS TO USTR FOR P.COLEMAN E.O. 12958: N/A TAGS: ECON ELAB ETRD SF SUBJECT: LABOR LEADER WARNS ON DOHA ¶1. Summary. Congress of South African Trade Unions (COSATU) General Secretary Zwelinzima Vavi criticized the Doha Round trade negotiations in a recent speech. Vavi said that developed country trade negotiators only pay "lip service" to development issues, and he praised the South African Government (SAG) for joining the Group of 11 and standing up for the rights of developing countries in the Doha talks. While warning that Doha poses a threat to industrial jobs in South Africa, Vavi acknowledged that a multilateral trading system is important for developing countries, since bilateral negotiations would always favor stronger nations. End Summary. -------------- DEVELOPMENTALLY CHALLENGED -------------- ¶2. Congress of South African Trade Unions (COSATU) General Secretary Zwelinzima Vavi provided labor's perspective on the SIPDIS Doha Round during remarks at the South African Institute of International Affairs on October 9. Vavi complained that Doha was intended to be a "development round" but had turned into a traditional trade negotiation, with development issues being placed at the "bottom of the list" of priorities after agriculture, non-agriculture market access (NAMA) and services. According to Vavi, developed country negotiators are only paying "lip service" to development issues. ¶3. In Vavi's view, a "terrible trade-off" is being offered to developing countries: they are being asked to lower their tariffs on industrial goods in exchange for lower subsidies and more liberal trade in agriculture. The COSATU boss admitted that reductions in agricultural subsidies would be good for the developing world, but he insisted that the price being asked in return was too high. He warned that current Doha proposals would "deindustrialize" South Africa and reduce the economy to tourism and primary products. "We will have to put on animal skins and dance to entertain tourists," he said. ¶4. Vavi said that the Hobson's choice being presented to developing nations would "have a devastating effect on employment in South Africa and seriously restrict South Africa's capacity and policy space to be able to industrialize and move up the value chain." Vavi also warned about any commitment that could bind South Africa. Without offering details, he said that the GATS agreement was hindering the SAG's ability to "remedy past injustices" in the health care system. -------------- WTO OR BUST -------------- ¶5. Despite Vavi's lurid Doha rhetoric, he emphasized the importance of multilateral trading rules and the need to support the WTO system. Bilateral trade negotiations would always favor the stronger nation, he said, asking, "Can you imagine how a trade negotiation between Germany and Lesotho would come out?" He praised the SAG for joining the Group of 11, which had helped developing countries "avoid being steamrolled by the U.S. and EU." According to Vavi, it is "better to be in the WTO and fighting battles and aligning positions there, then to be on one's own." (Comment. Vavi failed to recognize the willingness of large countries to provide unilateral trade benefits, such as AGOA. End Comment.) -------------- COMMENT -------------- ¶6. The large bulk of COSATU's 1.8 million members work in mining or manufacturing. COSATU, like most trade unions, has had a rough time trying to unionize farm workers, who could be among the beneficiaries of the Doha round. Vavi's comments reflect his membership's concern in protecting their jobs not only from casualisation and outsourcing but also from competition with cheaper labor in China and India. The South African textile industry has been in decline since the expiration of the multi-fiber agreement, and the loss of tens of thousands of textile industry jobs has made trade unionists leery of the benefits of free trade. Teitelbaum