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Speaker 1: The Clement my Natsila Show Live from the National Transport Conference,

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Speaker 1: brought to you by the Department of Transport on seven

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Speaker 1: o two.

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Speaker 2: It's ten thirty six and now we continue our series

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Speaker 2: that we started two weeks ago looking at the role

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Speaker 2: of multilateral institutions. We're focused on the United Nations. We've

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Speaker 2: looked at the World Bank Organization and today we are

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Speaker 2: looking at the World Trade Organization. It's an important organization

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Speaker 2: that sets global trade rules.

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Speaker 3: You know, how countries trade with one another.

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Speaker 2: In fact, I think it's rules and regulations, if I'm

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Speaker 2: not mistaken, govern approximately what over ninety five percent of

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Speaker 2: all world trade as of twenty twenty four, that's the

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Speaker 2: last I checked. But international trade shapes everything, as you know,

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Speaker 2: from the price of food in our supermarkets to the

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Speaker 2: opportunities that are available to South African export US. But

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Speaker 2: behind the scenes, there is this global body that's responsible

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Speaker 2: for setting the rules that govern trade between the countries.

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Speaker 2: It was established in nineteen ninety five. It provides a

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Speaker 2: framework for negotiating trade agreements and resolving disputes between countries

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Speaker 2: when trade conflicts arise, and even US as South Africa,

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Speaker 2: we've been a member of the World Trade Organization since

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Speaker 2: its formation, and we rely heavily on global trade, particularly

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Speaker 2: for exports, whether it's our minerals, agricultural products, or they

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Speaker 2: our manufactured goods. But the organization is also often criticized

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Speaker 2: for how it handles trade disputes, development issues, the balance

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Speaker 2: between power, the powerful and the developing countries. Because at

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Speaker 2: the core, I would imagine it aims to create economic

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Speaker 2: peace and stability in the world right through a multilateral

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Speaker 2: system based on consenting member states, But then it also

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Speaker 2: fail as significant challenges, especially in recent years. I mean,

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Speaker 2: global trade tensions have increased, particularly between major economies like

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Speaker 2: the United States, States and China, and that has raised

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Speaker 2: questions about whether the organization is still capable to effectively

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Speaker 2: manage disputes and maintain a rules based trading system. So

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Speaker 2: for developing countries like US and South Africa, this organization

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Speaker 2: remains important because it offers smaller economies sort of a

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Speaker 2: rules based system where disputes can be settled through legal

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Speaker 2: mechanisms rather than economic power. But when you look at

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Speaker 2: when Donald Trump announces things on Liberation Day, how does

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Speaker 2: that affect the rest of the world, And where does

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Speaker 2: the World Trade Organization come in. So we've invited s

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Speaker 2: Busy Sonyati, who is a sustainability practitioner at Ubuntu Nomics,

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Speaker 2: who's going to guide us through this conversation, and I'd

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Speaker 2: like you to also join this, Chad on Oh one

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Speaker 2: one eight d eight three oh seven oh two. You

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Speaker 2: can call us or send us a what'sup voice note

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Speaker 2: on oh seven.

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Speaker 3: To seven oh two one seven o two. So, which

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Speaker 3: is so thank you so much for making time for us.

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Speaker 4: Good morning, move one, Clement, Thank you for having me.

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Speaker 2: Yeah, I've tried to explain from my limited understanding what

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Speaker 2: the World Trade Organization is all about.

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Speaker 3: How do you see it? Why was it formed?

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Speaker 2: And has it been able to live up to its

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Speaker 2: mandate and expectations.

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Speaker 4: Well, the WTO was formed to help numbers use trade

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Speaker 4: as a means to raise living standards in their respective countries. So,

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Speaker 4: as you said earlier, it came up with global rules

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Speaker 4: for trade and the main the main objective is to

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Speaker 4: make sure that trade flows smoothly and pre predictably between

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Speaker 4: nation states who are members of the WUTY. Oh, of

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Speaker 4: course them, and one of the ways in which they

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Speaker 4: try to do that is by lowering trade barriers through

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Speaker 4: negotiations between countries and the w t O and by

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Speaker 4: breaking other barriers, other barriers will or to trade. So

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Speaker 4: so they try to be to have an inclusive trading

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Speaker 4: system because that will give members and assurance and stability

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Speaker 4: that if they work within the rules, everything will go smoothly.

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Speaker 4: So yeah, it is a way in which markets get

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Speaker 4: opened and and and markets get open for producers and

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Speaker 4: for consumers. It secures that supplies are readily available whenever needed. Yeah,

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Speaker 4: that's not highly I see.

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Speaker 2: So Ken, can the World Trade Organization intervene in, for instance,

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Speaker 2: the US trade war?

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Speaker 3: How does it work?

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Speaker 1: So?

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Speaker 2: How does the an organization like this process and facilitate disputes?

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Speaker 3: Uh?

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Speaker 4: Can it's intervene? I mean when Donald Trump came in

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Speaker 4: the World Trade Organization went into a spin. I mean

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Speaker 4: I don't think the current leader, Miss Gozie or Conjo

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Speaker 4: is on top of things because what was Donald Trump

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Speaker 4: did was just was just unprecedented because basically he rewrote

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Speaker 4: trade rules. And after Liberation Day, we saw other countries

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Speaker 4: rushing around. We saw global leaders like Modi going to

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Speaker 4: various places to secure trade deals, to secure for India

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Speaker 4: new markets, and we saw other countries from the EU

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Speaker 4: going to China individually. I mean Germany, we went to China,

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Speaker 4: France went to China, et cetera. So so so countries

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Speaker 4: suddenly came to realize that they were on their own. Basically,

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Speaker 4: what Donald Trump had done was to nullify existing global

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Speaker 4: rules of trade.

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Speaker 2: Yeah, so how does how do how do our decisions

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Speaker 2: made within the World Trade Organization? And and do all

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Speaker 2: member countries have and equal say, Because what we've seen

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Speaker 2: with these multi lateral organizations is that the more powerful

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Speaker 2: you are, the more rich you are as a country,

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Speaker 2: the more influence you have in these organizations. So how

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Speaker 2: does it work with with this one?

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Speaker 4: Yeah, well this one. What happens is that countries try

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Speaker 4: act the WUTY or try to reach a consensus. They

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Speaker 4: they go through issues on a pissmeal, a type of

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Speaker 4: a scenario, and and once they've they've reached that consensus,

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Speaker 4: then those decisions have to be sent to sovereign states,

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Speaker 4: to to to various governments, and those various governments will

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Speaker 4: take their decisions, those beauty or decisions to the various parliaments.

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Speaker 4: And it is those parliaments in the very countries which

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Speaker 4: remember members of the WTY, who will also thrashed out

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Speaker 4: those particular issues in their respective parliament and reach an

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Speaker 4: agreement to say, as countries and so we will ratify

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Speaker 4: WTY or rules. So basically what it all means is

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Speaker 4: that it boils down to member states eventually agreeing to

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Speaker 4: those particular decisions which have been made.

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Speaker 3: Oh I see.

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Speaker 2: So to use a practical example, when there were some

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Speaker 2: proposals for some higher tarriffs on the Chinese made vehicles,

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Speaker 2: that's not a decision that South Africa can just take

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Speaker 2: on its own and implement. That must still be sent

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Speaker 2: to the World Trade Organization first. Then there must be

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Speaker 2: consensus reached today before that decision gets implemented.

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Speaker 4: Yes, before that decision gets implemented, and the South African

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Speaker 4: parliament has to ratify that decision. Even if governments can say,

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Speaker 4: even if say a cabinet minister of trade can say

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Speaker 4: this is what we want, a parliament still has to

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Speaker 4: treash out that issue and reach it in an agreement

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Speaker 4: and say we also believe that we should increase tariffs

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Speaker 4: on Chinese on Chinese goods, and and then the Chinese

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Speaker 4: also have the right to say, okay, this is how

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Speaker 4: you're working. South Africa will also increase carriers on certain

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Speaker 4: products that which would get from you. So basically what

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Speaker 4: has happened is that there is a proceed prosity. Now

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Speaker 4: if you do this to me, I'll do the other

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Speaker 4: to you. Uh. It's that's why I'm saying that liberation.

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Speaker 4: They sort of nullified all wt O gains over the

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Speaker 4: years in that countries. Now it's a kit for cat.

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Speaker 4: You do this, I do that. If this suits you,

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Speaker 4: this will suit me. So that's that's the current scenario.

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Speaker 2: Yes, yeah, which is not is going to lead us

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Speaker 2: through quite a problematic path. I want to touch on

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Speaker 2: the issue of national sovereignty because I know in the

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Speaker 2: past I've heard some people, some opponents of the World

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Speaker 2: Trade Organization argue that, you know, since this organization functions

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Speaker 2: as a global authority on trade and is within its

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Speaker 2: right to review a country's domestic trade policies, then national

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Speaker 2: sovereignty is compromise. And I'm interested in your thoughts on that,

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Speaker 2: because if you take, for example, you know, regulations the

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Speaker 2: country may wish to establish to protect maybe its industry

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Speaker 2: or workers or the environment, those could be considered barriers

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Speaker 2: to the All trade organizations aim to facilitate free trade.

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Speaker 2: So a country may have to sacrifice. It's interesting to

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Speaker 2: to avoid violating WTO agreements.

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Speaker 4: Yes, yes, that happens because the way country trade is

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Speaker 4: on a comparative advantage basis. So so if if if

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Speaker 4: if compared to country B, I can produce a certain

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Speaker 4: product cheaper, then then then then I will concentrate on

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Speaker 4: that on on my comparative advantage. And what happens then

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Speaker 4: is that governments are bound by by by doublty or

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Speaker 4: rules to keep their trade policies transparent. But you know,

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Speaker 4: it's almost like counterintuitive because it's almost like saying company

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Speaker 4: empty and tell us your cost structure and and then

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Speaker 4: reveal that to voter com These two these two countries,

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Speaker 4: these two companies are in competition against each other. So

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Speaker 4: that's what happens with countries too. And since they are

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Speaker 4: in competition against each other, the countries tend not to

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Speaker 4: reveal too much. They don't reveal how much the subsidize.

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Speaker 4: I mean, some subsidies are not transparent. I can I

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Speaker 4: can a counter can say we will subsidize your electricity

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Speaker 4: by fifteen percent for an example, but at the same

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Speaker 4: time won't reveal that your knowledge, which is your transportation,

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Speaker 4: will also be subsidized, so so so countries are not

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Speaker 4: entirely transparent and so and so this is what causes imbalances,

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Speaker 4: trade imbalances, among other things.

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Speaker 2: Yes, yeah, okay, it's going up to ten minutes now

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Speaker 2: before eleven out clock. After the break, if you've got

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Speaker 2: questions for Bussy sonya Ti about the World Trade Organization,

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Speaker 2: you can call us on oh one one eighty three

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Speaker 2: or seven h two and maybe you've got inputs, You've

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Speaker 2: got your own reflections about how this organization has been run.

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Speaker 2: And also, as Busiso has said, what the US did

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Speaker 2: on Liberation Day is to throw out the World Trade

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Speaker 2: Organization rules Book out of the window. They've really redefined

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Speaker 2: world trade. So what do you make of then, where

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Speaker 2: the World Trade Organization finds itself now, given how the

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Speaker 2: US has acted on Liberation Day, your WhatsApps and voice

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Speaker 2: notes after the break.

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Speaker 1: Transpard the Driver of Growth, your Creation, Inclusivity and Sustainability

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Speaker 1: seven Life from the National Transport Conference.

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Speaker 2: It's seven minutes before eleven o'clock. We are in conversation

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Speaker 2: with Bussy Soniati, who is a sustainability practitioner as Ubuntu nomics,

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Speaker 2: and we're talking about the mandate and rolls of the

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Speaker 2: World Trade Organization. We're focusing on this because we're trying

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Speaker 2: to understand the number of the multilateral institutions that we

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Speaker 2: so often speak about, But do we actually know why

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Speaker 2: they were formed, when they were formed, what the mandate

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Speaker 2: has been, and how have these organizations run and have

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Speaker 2: they worked for us as developing countries bussy. So there's

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Speaker 2: a question here from a listener on Twitter about the

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Speaker 2: African Continental Free Trade Area. How does it come in

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Speaker 2: here given that we already have agreement signed at the

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Speaker 2: World Trade Organization? How do how do the two institutions

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Speaker 2: then work hand in hand.

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Speaker 4: Well, what we have in Africa is is like what

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Speaker 4: they have in what we're trying to have like what

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Speaker 4: they have in the EU where goods and services can

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Speaker 4: can can easily go through borders within Europe, and so

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Speaker 4: what we have in Africa, what they want to have

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Speaker 4: in Africa is for goes and services to to to

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Speaker 4: be able to access people, to access markets in the

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Speaker 4: various countries within Africa. So that's sort of like in

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Speaker 4: Africa and in Intra Africa arrangement, but that also still

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Speaker 4: will have to fall in line with WT or rules

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Speaker 4: because everyone is a sicknetary. All the members are sicknestories

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Speaker 4: of all the African members are still signatories of the

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Speaker 4: wt oh so, so basically it's almost like a sub institution.

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Speaker 4: When it comes to global trade rules, the rules that

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Speaker 4: that that that apply in Africa will have to be

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Speaker 4: the same rules that are governed global trade.

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Speaker 2: Yeah, the US president once threatened to withdraw from the

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Speaker 2: World Trade Organization.

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Speaker 3: I mean this was back in twenty eighteen. He was

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Speaker 3: calling it a disaster.

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Speaker 2: What would be the implications if the US moved to

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Speaker 2: withdraw from the organizations? I mean, there are trillions of

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Speaker 2: dollars in global trade. I imagine that would be disrupted.

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Speaker 4: It would be disrupted. But as we have seen with

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Speaker 4: the carbon emissions, with the Paris Accord, the US pulled out,

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Speaker 4: but other countries still carried on with their mandays, with

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Speaker 4: their with their their agreements. So so the US might

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Speaker 4: pull out, but that doesn't really mean much in that

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Speaker 4: basically what what what what? What would basically happen is

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Speaker 4: that countries would trade less in the US dollar. That

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Speaker 4: that that that's what would happen. The countries would trade

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Speaker 4: in sort of like the yuan or the ruby, the

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Speaker 4: Russian ruble or the Indian rookie. That's what is happening

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Speaker 4: already with the sort of we're seeing with the Iran

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Speaker 4: the war in Iran, where Iran is saying, okay, we

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Speaker 4: will let your ships pass through the Strait of Hormus

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Speaker 4: if only you will be paying in yuan. So sort

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Speaker 4: of like trying to force countries to move away from

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Speaker 4: from from from from the pecord dollars from the US dollar.

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Speaker 4: So so if the US did that, if they pulled out,

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Speaker 4: they would be hurting themselves because because uh the head

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Speaker 4: humoney that the US holds over the world is because

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Speaker 4: of the dominants of the US dollar as a reserve

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Speaker 4: currency for for for trade.

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Speaker 2: Makes sense, Yes, it wouldn't wouldn't work for for them

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Speaker 2: as as a country. So it is so thank you

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Speaker 2: so much man, thank you for joining us for this

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Speaker 2: chat and for helping us understand more about the World

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Speaker 2: Trade Organization, how it operates, and uh yeah, what the

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Speaker 2: consequences would be if we continue to have countries operate

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Speaker 2: outside of the rules agreed at the World Trade Organization.

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Speaker 3: It's two minutes now before