The Committee was presented with a briefing on the structure of the World Trade Organisation and the implementation of the agreements establishing the World Trade Organisation. The presentation was an update by the Committee Researcher on a World Trade Organisation training and assessment course which was held in Japan.
In outlining the basics and structure of the World Trade Organisation, members were presented with a historical background of the World Trade Organisation, features of the WTO as contrasted to the old General Agreement on Tariffs and Trade (GATT), its organization and an outline of the WTO agreements. The Committee was briefed on what the WTO does. The major activities of the World Trade Organisation included tariff negotiation, rule making, dispute settlement and capacity building. The achievements of the rounds were also examined.
In the discussion that followed, committee members asked for clarifications on the complementing role of the World Trade Organisation and the General Agreement on Tariffs and Trade. Further questions were asked about the importance and achievements of the Doha Development Agenda; the role which the Committee and Parliament as a whole had to play; the standing of South Africa in relation to the World Trade Organisation; the disrespect of Intellectual Property Rights by some WTO member and the mechanisms used to combat dumping and trade discrimination.
Technical details of the implementation of the agreements and the content of the agreements were to be covered in subsequent presentations to the Committee by the researcher.
Introduction by the Chairperson
The Chairperson welcomed members and the delegates from the Department of Economic Development and the South African Revenue Service (SARS). The focus of the meeting was to receive a presentation from the Committee Researcher on the structure and implementation of the World Trade Organisation (WTO) agreements. The presentation was going to be the first of an awareness series to keep the Committee members informed of the developments of the WTO.
Implementation of the World Trade Organisation Agreements
Ms Nwabisa Mbelekane, Committee Researcher, made the presentation which provided a synopsis of aspects of the WTO training workshop that Ms Mbelekane had attended in Japan.
In outlining the basics and structure of the WTO, members were presented with a historical background of the WTO, features of the WTO as contrasted to the old General Agreement on Tariffs and Trade (GATT), the organization of the WTO and an outline of the WTO agreements.
Ms Mbelekane said that the WTO had replaced the GATT. During the period of the GATT, there were eight rounds of trade negotiations. The last round was the Uruguay Round, initiated in 1986 and concluded in 1993. The main features of the WTO as compared to the GATT were that the WTO was a much more comprehensive regime which included not only rules on trade in goods but rules on trade in services and intellectual property. The WTO had a more effective dispute settlement mechanism and had 155 members at present.
On the structure of the WTO, the organisation was headed by a Ministerial Conference. The rest of the structural framework was presented to members with emphasis on the technical committees which focus on various areas of trade. In outlining the WTO agreement, members were told that when the Uruguay Round was agreed upon, negotiating parties agreed to adopt a single undertaking approach. This meant that a party who joined the agreement establishing the WTO, became a member of all the WTO agreements. The major components of the agreements establishing the WTO included the Agreement on Trade in Goods, General Agreement on Trade in Services, Agreement on Trade Related Aspects of Intellectual Property Rights, Dispute Settlement Understanding, Trade Policy Review Mechanism, and Plurilateral Trade Agreements.
The Committee was presented with what the WTO does. The major activities of the WTO included tariff negotiation, rule making, dispute settlement and capacity building.
Tariff reduction has been one of the most important means of trade liberalization. The positions of the WTO and GATT towards tariff and non-tariff barriers to trade were outlined. The achievements of the eight rounds under the GATT were considered. It was noted that tariffs had been substantially reduced. Under the WTO, the two major rounds were the Information Technology Agreement (1996) and the Doha Development Agenda (2001). With regards to dispute settlement, there was an institutional mechanism to secure compliance with the rules of the WTO. These mechanisms included the Trade Policy Review Mechanism and Dispute Settlement Procedures. On capacity building, there was the need to enhance capacity and performance as coming up with the rules of the WTO was not an easy task, especially for developing countries. This called for special and differential treatment and capacity-building activities.
The Chairperson said that the technical details of the implementation of the agreements and the content of the agreements were to be covered in subsequent briefings to the Committee by the researcher. The current presentation was meant to give members an overview of the WTO.
Ms S Van der Merwe (ANC) asked what the connection between the trip to Japan and the presentation was. GATT had not been replaced by the WTO. GATT still remained the umbrella body within the WTO and had never been done away with. The General Agreement still existed as the WTO’s umbrella treaty for trade in goods. The Doha Round still remained a round but was informally known as the Doha Development Agenda because it favoured developing countries and was the most crucial of the rounds.
The Chairperson replied that the Researcher went to Japan for a training and assessment summit organized by the WTO and the presentation was a briefing to the members on the summit.
Ms Mbelekane said that the Research Unit of Parliament recommended that she attended the summit. The training course and assessment was meant for government officials from various countries. GATT had not been replaced. It complemented the agreements of the WTO. The details of the Doha Round were to be handled in the next presentation to the Committee but it was true that although it was called a development agenda, it remained a round.
Mr K Mubu (DA) asked what the position of the WTO was on issues of the disrespect of intellectual property rights. He gave the example of China which was noted for manufacturing fake products. What sanction did the WTO have for such members? What was the protection given by the WTO to countries who suffered from trade discrimination? The WTO principle of most-favoured-nation underlying multi-lateral trading was difficult to implement so did the WTO have any enforcement mechanisms?
Ms Mbelekane replied that the WTO had a dispute settlement committee which could hear issues of disrespect of intellectual property rights and trade discriminations. After peaceful negotiations had been attempted and a solution had not been arrived at, parties could declare a dispute at the WTO. This also covered the issues of dumping and rejection of goods. The principle of the most-favoured-nation was a recommendation of the WTO and there was generally a lack of enforcement by the WTO. However, punitive sanctions could be imposed in the form of economic bans and sanctions. The WTO was based on diplomacy and the good will of member countries.
Mr Z Ntuli (ANC) asked what role did Parliament and the Committee in particular have to play in the bigger picture of the WTO and what was South Africa’s standing with the WTO.
The Chairperson replied that the researcher was going to prepare another briefing for members where the role of Parliament and South Africa would be examined. The technical details of the WTO structure would also be covered.
Committee Report on its Strategic Planning workshop; Minutes; Programme
The Committee Report on its March 2012 Strategic Planning workshop was considered and adopted. The minutes of 15 and 29 May 2012 meetings were considered and adopted. The minutes of the 22 May meeting were held over for amendments to be incorporated. The Committee Programme for the third term was considered and adopted.
The meeting was adjourned.
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