Doha Round status of negotiations; Working Group's Interim Report on Gambling

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Trade and Industry

24 November 2011
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Working Group on gambling presented its Interim Report on Gambling to the full Committee, having considered the conclusion and recommendations of the Gambling Review Commission Report. The Working Group had engaged with regulators and the Department of Trade and Industry, had undertaken a site visit to Gauteng to acquaint itself with the various forms of legal gambling in South Africa and had identified some of the challenges, including legislative issues, that the gambling industry was facing. Its interim Report noted a need to amend the gambling and National Lottery legislation, in order to protect minors and regulate all forms of gambling. The Working Group still wished to consider the feasibility of having a single, consolidated gambling regulation body, and the structural arrangement of the National Lotteries Distribution Fund. It would also be doing further investigations into the National Responsible Gambling Programme and curbing of problem gambling. The Working Group would continue its investigation, in consultation with other role-players. It recommended a study tour visit to Italy to investigate that country’s regulatory framework for gambling, particularly online gambling. The final report of the Working Group would be presented in March.  

The Department of Trade and Industry briefed the Committee on the current status of the Doha Round negotiations. The 8th Ministerial Conference of the World Trade Organisation (WTO) would shortly be held, where South Africa would take the policy position that multilateralism was a necessary intergovernmental response to manage globalisation and interdependence of national economies. South Africa advocated for multilateral global governance institutions to fully accommodate developing countries’ voices and development interests. The current WTO Doha Round had witnessed repeated attempts to erode the developmental mandate, with developed countries only being prepared to offer moderate reductions to distortive subsidies that undermined the development in developing countries, , and that although the United States of America was making increased demands, it was unable to make offers in return. The Doha Round had stalled and it was unclear when it could be re-started. Although the 8th Ministerial Conference would not be a negotiating session for the Doha Round, it would discuss how the negotiations could be re-started. A limited number of WTO members were trying to advance negotiations between themselves only, in a pluri-lateral approach. The Ministerial Conference would be taking decisions on extending waivers for e-commerce and TRIPS non-violation complaints, and possible accession by Russia to the WTO. South Africa remained committed to concluding the Doha Round on the lines of the developmental mandate agreed to in 2001. It also remained committed to the principles of multilateralism, transparency and inclusiveness, and felt that the pluri-lateral negotiations would undermine those principles and marginalise developing countries.

The Committee asked what South Africa’s position was on plurilateral approaches and the extent to which South Africa was acting in line with other African countries in the WTO. They asked for an explanation of the distinction between multi-lateral and pluri-lateral negotiations. Members also asked if the trade gains made through the Africa Growth Opportunity Act (AGOWA) were likely to materialise in the Doha Round, whether South Africa considered itself a developing or developed nation, and the advantage of classification as a developing country, and how the new approaches were likely to impact on the Conference of Parties and trade approaches to climate change. The delays in the accession of Russia, and the implications, were discussed. Members also enquired at what stage the drawn out process in this Doha Round would be regarded as being excessive.

The Committee adopted its minutes of 28 October, 01 November, 02 November, 09 November, 11 November and 16 November 2011 without amendments.


Meeting report

Interim Report on Gambling: Working Group on Gambling
Mr N Gcwabaza (ANC), Chairperson of the Working Group on Gambling, presented the report of the Working Group, noting that its terms of reference were to advise the full Committee on matters pertaining to its consideration of the conclusions and recommendations that were outlined in the Gambling Review Commission’s (GRC) Report in relation to the purpose of the legislation. The Working Group had engaged with regulators and Department of Trade and Industry (dti). In addition, on 20 and 21 October, the Working Group visited Gauteng to acquaint itself with the various forms of legal gambling in South Africa and identify some of the challenges the gambling industry was facing, particularly in terms of existing legislation.

The Working Group noted that there would be a need to amend gambling and lotteries legislation, protecting minors and regulating all forms of gambling. There was also the need for a discretionary fund, which the National Lottery Board should be able to distribute for national priorities, as well as disaster relief. There was also need to set up a Gambling Regulatory Framework, where norms and standards should be developed and published, to set minimum standards for licensing conditions, limitations on forms of gambling activities and their associated ceilings, advertising principles and implementation of measures to address problem gambling. In addition, it had recommended that the number of casino licenses should remain at 40. Horse racing should be regulated.

The Working Group also identified areas for further investigation. This included a study into the feasibility of having a single, consolidated gambling regulation body, and into the structural arrangement of the National Lotteries Distribution Fund. Other areas for further investigation included the National Responsible Gambling Programme and curbing of problem gambling. In addition, the North West/Gauteng dispute regarding the relocation of the gambling licence lost due to demarcation issues should be resolved. 

Mr Gcwabaza concluded the presentation by highlighting that the Working Group needed to continue its investigations into the areas identified, in conjunction with any relevant role-players, should hold a study tour visit to Italy to investigate its regulatory framework for gambling, particularly online gambling, and prepare for submission of a final report to the Committee in March.

Discussion
The Chairperson thanked the Working Group for a thorough report.

Mr T Harris (DA) asked about the implications of the broad reforms being proposed by the Report.

Mr Gcwabaza replied that the amendment of the existing gambling and lotteries legislation would suffice. There was no need to generate an entirely new bill.

Mr B Radebe (ANC) asked what consideration was made when increasing the Miscellaneous Fund of the National Lotteries from 2% to 5%. He wondered why this Fund was not increased to a larger percentage. South Africa needed money from this Fund to assist communities, some of whom were affected by natural disasters, and there was no other money to help them.

Mr Gcwabaza replied that a request had been made to the National Lottery Board to increase the Miscellaneous Fund, which was currently at 5%, to a larger figure.

The Chairperson reminded Members that the Report was not on the agenda for deliberations, but was just a progress report. She asked when the final report would be ready.

Mr Gcwabaza replied that the Working Group would try to complete its final report before March.

Doha Round Negotiations: Current status: Briefing by Department of Trade and Industry
Mr Xavier Carim, Deputy Director General: International Trade and Economic Development, Department of Trade and Industry, briefed the Committee on the current status of the Doha Round negotiations. For the 8th Ministerial Conference of the World Trade Organisation (WTO), South Africa had taken the policy position that multilateralism was a necessary intergovernmental response to manage globalisation and interdependence of national economies. South Africa advocated for multilateral global governance institutions, to fully accommodate developing countries’ voices and development interests. The WTO Doha Round had witnessed repeated attempts to erode the developmental mandate. In agriculture, developed countries offered moderate reductions in distortive subsidies that undermined the development of developing countries, including those in Africa. While the United States was making increased demands, it was unable to make offers. The Doha Round had stalled, and it was unclear when it could be re-started.

Mr Carim noted that the 8th Ministerial Conference was not a negotiating session for the Doha Round but would likely be discussing how to re-start negotiations. There was a new pluri-lateral approach to advance negotiations amongst a limited number of members. Decisions to be taken at the Ministerial Conference included standard decisions to extend waivers for e-commerce and TRIPS non-violation complaints, and possible accession by Russia.

South Africa’s position was that it remained committed to concluding the Doha Round, on the developmental mandate agreed to in 2001. South Africa was committed to the principles of multilateralism, transparency and inclusiveness. It felt that proposals for pluri-lateral negotiations undermined these principles and would further marginalise developing countries.

Mr Carim concluded the presentation by stating that preparations for the 8th Ministerial Conference would involve consultations in the National Economic Development and Labour Council, its Technical Selective Liaison Committee (TESELICO), National Consultative Conference, and IBSA and BRICS meetings in Geneva, ahead of the Ministerial Conference.

Discussion
Mr G McIntosch (COPE) asked if the trade gains made between Africa and America in terms of the Africa Growth Opportunity Act (AGOWA) would also materialise with the Doha Round.

Mr Carim replied that South Africa, together with other sub-Saharan countries, had supported AGOWA as it offered benefits that accrued to these countries and also to the US market. The Doha Round had a different framework, principles and procedures. AGOWA was unilateral, whereas the WTO was more concerned with reciprocity.

Mr McIntosch asked if South Africa should approach the developed countries from the stance of an underdeveloped country or as a developed nation. There seemed to be an expectation that South Africa was developed enough to stand on its own.

Mr Carim replied that not all developing countries were in the same category. There were some least-developed countries, and then a group of developing countries that were tending to do better. South Africa was still a developing country. If it were to be classified as a developed country, this would deny South Africa the flexibility to apply tariffs in the way that it needed to apply them in order to protect the emerging industry.

Mr Harris asked what South Africa’s position was on pluri-lateral approaches.

Mr Carim replied that the advantage with pluri-lateral approaches was that countries who agreed on a particular issue could forge ahead. The disadvantage was that it fragmented the system as it resulted in a patchwork of agreements, on different issues, with different members. These agreements became difficult to manage.

Mr Harris asked to what extent South Africa acted in line with other African countries in the WTO.

Mr Carim replied that South Africa coordinated with the African Group in Geneva. Egypt, Kenya, Nigeria were also important players. The African Group was chaired by Mauritius, which also played an important role.
Mr Radebe asked how the new approaches being proposed within the Doha round would impact on the Conference of Parties (COP17).

Mr Carim replied that the difficulty was that there did not seem to be any forum that wanted to take up the issue of climate change and trade in a direct manner. The WTO was waiting for climate change negotiations to be concluded so that it could then take up issues that related to trade.

Mr G Selau (ANC) asked what the difference was between pluri-lateral and multi-lateral.

Mr Carim replied that in the WTO context, pluri-lateral referred to an agreement that covered some members, while multi-lateral was the term used for an agreement of the WTO that covered all members. There were currently 150 WTO members.

Mr Harris asked what the delay was with the accession of Russia.

Mr Carim replied that Russia was the largest non WTO member. The fact that Russia was joining the WTO was seen as a major development. The terms were that Russia needed to adopt the rules and disciplines of the WTO in their entirety. Part of the accession process also would require Russia to change all its national legislation that dealt with trade-related issues, to bring them in conformity.  

Mr Harris stated that this Doha round had been ongoing for the last ten years. Previous rounds used to take two to three years. He wondered at what point it would be considered as taking too long.

Mr Carim replied that the WTO comprised more than the Doha Round. The Doha Round was simply a negotiating process. The fact that there was an impasse showed how much was at stake. It was clear that progress was not being made, but the Department of Trade and Industry did not have an answer to the question at what point it would be considered to be taking too long. This was a political decision that the whole membership of WTO needed to make. As long as the round was continuing, South Africa needed to participate and shape the outcomes emerging.

Consideration and Adoption of outstanding Committee Minutes
The Committee adopted its minutes of 28 October, 01 November, 02 November, 09 November, 11 November and 16 November 2011 without amendments.

The Chairperson thanked members for their input and hard work during this Parliamentary session.

The meeting was adjourned.


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