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Shopsteward Volume 27: Special Bulletin

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Media Centre  |  COSATU Press Statements

COSATU statement on the outcomes of the WTO Hong Kong Ministerial

19 December 2005

COSATU, like many other progressive trade unions, NGOs and governments from the poor nations wishes to express its disappointment at the outcomes of the Hong Kong WTO Ministerial.

The developed countries once again failed to extend a hand of solidarity to the poor. This round was supposed to be a development round building on the foundation laid in the Doha round of negotiations. The developed countries were under pressure to revers e a deeply held view that they have used the WTO to entrench their economic dominance over poor nations of the south.

Indeed many expected that developed countries would use the round to promote development, stop using subsidies that cause havoc in poor nations, and open their markets to the developing countries with a view to dealing with the historic imbalances that exi st.

If measured against these expectations - that this would be a development round to take forward and build on the foundation of the Doha round - the Hong Kong Ministerial of the WTO was an abysmal failure.

The developed countries managed through divide and rule tactics, bullying, using political blackmail, throwing tantrums and using such other intimidating tactics including threatening walk-outs, to frustrate the attempts to make Hong Kong a development rou nd.

The most contentious issues to be addressed as part of the so called development round were the much hated subsidies the rich nations pay to prop up their rich farmers. The final text contains some vague commitments on agriculture that promise the eliminat ion of the export subsidies but only in 2013. However, domestic subsidies and market access in agriculture still remain firmly entrenched. The emphasis on addressing the subsidies paid to exports means that the option still remains for developed countries to shift current export subsidies into subsidies that support domestic industry and production, so that in reality, subsidies for the farmers will continue.

The situation will remain that it would be better to be a cow in Japan being subsidised for $7 per day, to being a human being living in Africa as the COSATU General Secretary pointed in a speech to the march held in Hong Kong. Over a billion of the world citizens live on less than $2 US per day.

And to get this minimal commitment in agriculture, developing countries had to pay a terribly high price. The commitment to negotiating tariff reduction in non agricultural goods (manufacturing, fishing, forestry and minerals) is given impetus - the text a grees that the final formula and details of the formula must be finalised by June 2006. Taking into account the negative balance of forces, it will be hard to resist the pressure the developed nations are going to exact on the poor nations to cut their tar iffs, to compensate for the most minimum commitments they have made on agriculture.

To the South African workers who have seen their secure jobs being replaced by insecure, temporary, low-paid jobs and homework, we say - be afraid - be very afraid!

The text on services shows that the developing countries managed to resist attempts to immediately open potentially all services to GATS. But the developed nations managed to squeeze in a potentially dangerous commitment that opens and fast-tracks negotiat ions on services in the near future. Again taking into account the unfavourable balance of forces, the developing countries will not be able sustain resistance to the big push to open up services to international competition.

The declaration would have been worse if the developed countries had their way. The developing countries put up a brave fight -they held to their alliances to resist pressure from developed countries; they ensured that the NAMA negotiations did not include compulsory sectoral negotiations that would reduce tariffs in those sectors to zero; they ensured that countries were not forced to negotiate services under compulsory plurilateral negotiations. They were also able to make some limited progressive gains - for example the formula in NAMA has to include special and differential treatment (which means that developing countries will not be expected to make the same tariff reduction commitments as developed countries); they warded off attempts to open up servic es to GATS immediately.

We pay tribute in particular to the role played by our government delegation led by Ministers Mandisi Mphahlwa and Thoko Didiza and Deputy Minister Rob Davies. Throughout the week the South Africa delegation became a beacon of hope for progressive forces a s they, through a number of coalitions, led resistance against the powerful interests of the north and rich countries.

The broad based SA delegation became the best example of how the broad nature of the delegation could be used to lobby support for the progressive propositions. This led to unprecedented levels of cooperation between the SA delegation and the international trade union movement, the NGOs and the other progressive governments from the South.

South Africa's strong commitment to the region and continent, helped alleviate previously developed suspicions that South Africa was not allied to the goals of developing countries, the region and the continent but that South but was pursuing a developed c ountry agenda.

However, on the whole, under enormous pressure from developed countries to ensure "a successful Ministerial, and in the spirit of compromise", this exemplary cooperation could not guarantee favourable outcomes for developing countries.

The only way to change the balance of forces in favour of the developing countries lies in building on the foundation laid during the Hong Kong and before this Seattle and Cancun ministerials. The developing countries are only able to resist if they build big, effective and well coordinated alliances - on their own they are far too weak to resist. Secondly the cooperation between SA government's delegation with the trade unions and NGOs from both developed and developing countries holds huge potential to br oaden the frontiers of resistance and pursue a progressive agenda. COSATU will assist to ensure that these alliances are strengthened and coordinated. Without this happening we must begin to count the costs of the failed Hong Kong WTO ministerial in the me dium to long run.

The next challenge is to ensure that we are continually vigilant on how the process is taken forward in Geneva. We can certainly expect the developed countries' tactics of bullying and using coercion to continue. We can also expect the processes in the WTO to continue to favour developed countries with greater resources and opportunity to engage. This means that we have to ensure that we continue to build our coalitions now, continue to mobilise for development and against a narrow market access and that we continue to support our governments' developmental agenda. If we don't do that, any potential future victory we may have gained will be lost, as bureaucrats succumb to pressure.