A Rules-based Trading System: Multilateral, Regional and Bilateral Developments Opportunities and Challenges for Business and for South Africa Trudi Hartzenberg Trade Law Centre for Southern Africa

2 Introduction and Overview  Paradigm Shift in International Trade Regime and Institutional Architecture  World Trade Organisation (institutional anchor for multilateral trade rules)  Regional and Bilateral Trade Arrangements and Agreements  Trade Regulation: new generation trade barriers (challenges and opportunities)  Trade Policy and Trade Negotiations (how does this work in South Africa)  Implications of the new international trade regime for Business  Conclusions

3 Paradigm Shift: The World Trade Organisation (WTO) and Beyond  Towards freer trade: liberalisation within a rules-based framework  Trade liberalisation and economic liberalisation: deregulation and re- regulation  Why do we need trade rules? Developments at Multilateral Level  Establishment of the WTO in 1995  WTO Agreements and Negotiations  Redress within the Rules-based trading system  Expanding WTO Agenda – what about domestic policy space?  Cancun and now?

4 Institutional Anchor for Multilateral Trade Rules: WTO Structure and Principles  Member-driven organisation (147)  Ministerial Conference  General Council (Trade Policy Reviews and Dispute Settlement Body)  Council on Trade in Goods, Council for Trade in Services, TRIPS Council  Committees on Trade & Environment, Trade & Development..  Working Groups  Non-discrimination  Binding Market Access  Transparency  Exceptions  Special & Differential Treatment

5 Regional and Bilateral Trade Agreements and Arrangements (part 1) Substantive shift in North-South trading relations - from non- reciprocal preferences to reciprocity  European Union (from Lomé to Economic Partnership Agreements) – South Africa’s Trade and Development Cooperation Agreement with the EU  US (from AGOA to a free trade agreement – negotiating with the US, as SACU)

6 Regional and Bilateral Trade Arrangements and Agreements (part 2) Multilateral (WTO) Agreements, Customs Unions and Free Trade Areas creating a complex network of trade rules for international business  SADC (Trade Protocol – towards a free trade area)  SACU (New SACU Agreement and a new era for the customs union)  New Regional Configurations (influence of Economic Partnership Agreement negotiations on southern and eastern Africa) Note: any trade agreement presents at best a collection of potential benefits – there is no guarantee that these benefits will be realised. Market access is necessary but not sufficient for the potential benefits of trade to be realised either by firms, consumers or countries

7 Trade Regulation: New generation trade barriers From tariffs and quotas to a new generation of trade barriers – recent developments in international trade regulation  What are the new barriers to trade (from tariffs to technical barriers, standards...)  Implications of technical barriers to trade for business – cost, technical sophistication – capacity for effective implementation (what are the implciations for business, especially small business?)

8 Trade Policy and Trade Negotiations  Trade Policy Process – how does this work in South Africa?  DTI and business: articulating the interests of business in trade negotiations  DTI’s role in trade negotiations (what about other government departments?)  How to balance competing interests (eg services vs agriculture) – who makes these decisions?  Compare with the US example (SACU-US negotiations, AGOA)

9 Implications of the new international trade regime for SA business  Transaction costs of engaging in international trade (knowledge of trade barriers for specific markets..)  Compliance with trade regulation (interface with govt departments, standards authorities)  Dispute settlement (business cannot bring a dispute to the WTO – only govt can)  Consumer preferences and new barriers to trade – what can business do?

10 Conclusions  Rules-based system vs power-based system: what has changed?  New generation trade barriers: closer interface between business and government required  Dispute settlement: what is necessary for this process to work for business?  What can we do to facilitate trade within the rules-based system of international trade, and how can trade contribute to the achievement of broader economic policy objectives (job creation, economic growth, poverty reduction)?