VZCZCXRO2090
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #3650 2901523
ZNR UUUUU ZZH
R 171523Z OCT 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 2302
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUCPDC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS PRETORIA 003650 
 
SIPDIS 
 
SIPDIS 
 
DEPT PLEASE PASS TO USTR FOR P.COLEMAN 
 
E.O. 12958: N/A 
TAGS: ECON ELAB ETRD SF
SUBJECT: LABOR LEADER WARNS ON DOHA 
 
 
¶1.  Summary.  Congress of South African Trade Unions (COSATU) 
General Secretary Zwelinzima Vavi criticized the Doha Round 
trade negotiations in a recent speech.  Vavi said that 
developed country trade negotiators only pay "lip service" to 
development issues, and he praised the South African 
Government (SAG) for joining the Group of 11 and standing up 
for the rights of developing countries in the Doha talks. 
While warning that Doha poses a threat to industrial jobs in 
South Africa, Vavi acknowledged that a multilateral trading 
system is important for developing countries, since bilateral 
negotiations would always favor stronger nations.  End 
Summary. 
 
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DEVELOPMENTALLY CHALLENGED 
-------------------------- 
 
¶2.  Congress of South African Trade Unions (COSATU) General 
Secretary Zwelinzima Vavi provided labor's perspective on the 
 
SIPDIS 
Doha Round during remarks at the South African Institute of 
International Affairs on October 9.  Vavi complained that 
Doha was intended to be a "development round" but had turned 
into a traditional trade negotiation, with development issues 
being placed at the "bottom of the list" of priorities after 
agriculture, non-agriculture market access (NAMA) and 
services.  According to Vavi, developed country negotiators 
are only paying "lip service" to development issues. 
 
¶3.  In Vavi's view, a "terrible trade-off" is being offered 
to developing countries: they are being asked to lower their 
tariffs on industrial goods in exchange for lower subsidies 
and more liberal trade in agriculture.  The COSATU boss 
admitted that reductions in agricultural subsidies would be 
good for the developing world, but he insisted that the price 
being asked in return was too high.  He warned that current 
Doha proposals would "deindustrialize" South Africa and 
reduce the economy to tourism and primary products.  "We will 
have to put on animal skins and dance to entertain tourists," 
he said. 
 
¶4.  Vavi said that the Hobson's choice being presented to 
developing nations would "have a devastating effect on 
employment in South Africa and seriously restrict South 
Africa's capacity and policy space to be able to 
industrialize and move up the value chain."  Vavi also warned 
about any commitment that could bind South Africa.  Without 
offering details, he said that the GATS agreement was 
hindering the SAG's ability to "remedy past injustices" in 
the health care system. 
 
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WTO OR BUST 
----------- 
 
¶5.  Despite Vavi's lurid Doha rhetoric, he emphasized the 
importance of multilateral trading rules and the need to 
support the WTO system.  Bilateral trade negotiations would 
always favor the stronger nation, he said, asking, "Can you 
imagine how a trade negotiation between Germany and Lesotho 
would come out?"  He praised the SAG for joining the Group of 
11, which had helped developing countries "avoid being 
steamrolled by the U.S. and EU."  According to Vavi, it is 
"better to be in the WTO and fighting battles and aligning 
positions there, then to be on one's own."  (Comment.  Vavi 
failed to recognize the willingness of large countries to 
provide unilateral trade benefits, such as AGOA.  End 
Comment.) 
 
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COMMENT 
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¶6.  The large bulk of COSATU's 1.8 million members work in 
mining or manufacturing.  COSATU, like most trade unions, has 
had a rough time trying to unionize farm workers, who could 
be among the beneficiaries of the Doha round.  Vavi's 
comments reflect his membership's concern in protecting their 
jobs not only from casualisation and outsourcing but also 
from competition with cheaper labor in China and India.  The 
South African textile industry has been in decline since the 
expiration of the multi-fiber agreement, and the loss of tens 
of thousands of textile industry jobs has made trade 
unionists leery of the benefits of free trade. 
Teitelbaum