International Trade Policy and Class Dynamics in South Africa

The Economic Partnership Agreement

Simone Claar

• Publisher: Palgrave Macmillan
• Year: 2017
• Print ISBN: 9783319657134
• eBook ISBN: 9783319657141
• Topic: Politics & International Relations
• Subtopic: International Business
• Index: Politics & International Relations

This book provides an innovative perspective on class dynamics in South Africa, focusing specifically on how different interests have shaped economic and trade policy.As an emerging market, South African political and economic actions are subject to the attention of international trade policy. Claar provides an in-depth class analysis of the contradictory negotiation processes that occurred between South Africa and the European Union on Economic-Partnership Agreements (EPA), examining the divergent roles played by the political and economic elite, and the working class. The author considers their relationships with the new global trade agenda, as well as their differing standpoints on the EPA.

© The Author(s) 2018

Simone ClaarInternational Trade Policy and Class Dynamics in South AfricaInternational Political Economy Serieshttps://doi.org/10.1007/978-3-319-65714-1_1

Begin Abstract

1. Introduction and Theoretical Focus

Simone Claar¹

(1)

University of Kassel, Kassel, Hessen, Germany

End Abstract

Trade is playing a more important role for developing economies. In the last ten years, the global share of merchandise trade in developing economies has increased to 42%; simultaneously, the share in commercial services has increased to 36% (WTO 2016: 14–15). At the same time, the global political and economic order has been challenged by the rise of emerging markets (e.g. Nölke et al. 2015; Nölke et al. 2014; Becker 2013; Kahler 2013; Stephen 2012; Kappel 2011). The rise of the BRICS (Brazil, India, Russia, China and South Africa) has also influenced the shift in the global trade share. In 2013, the BRICS had 18.5% of the global trade share in merchandise trade, which is mainly driven by China (WTO 2014: 12–13) . Although all BRICS markets have experienced national political and economic crises in the last couple of years, they still remain important global trade players, as its containerised trade, which grew 5.8% worldwide in the first half of 2016 (The Times of India 2016). A change of power within the global trading regime in favour of the global South is taking place. For a while, the 1947 signed General Agreement on Tariffs and Trade (GATT) followed a classical liberal trade agenda with a focus on tariffs and quotas. Due to political and economic crises, like high inflation, oil crisis and the demand for new markets, a radical shift took place in the 1970s and 1980s. As Harvey summaries, “there has been an emphatic turn towards neoliberalism in political-economic practices and thinking everywhere since the 1970s” (Harvey 2005: 2). The specific political constellation in the USA with Ronald Reagan as president and in the UK with Margret Thatcher as the prime minister supported this economic shift with answers to the economic crisis through the deregulation of industries, the minimisation of trade union power and the withdrawal of the state. This also had an impact on global economic institutions like the International Monetary Fund, the World Bank and the World Trade Organization (WTO) , as they followed these hegemonic practices (Harvey 2005: 1–4). Besides the political impact on the trading system, the driving forces of this agenda looked for new economic possibilities. Within trade and investment non-tariff barriers like trade in services and intellectual property rights were just some new strategies to meet the capitalist demand for new markets. In 1995, the WTO was founded and the GATT became one agreement among the Trade-Related Investment Measures (TRIMS), the General Agreement on Trade in Services and Trade-Related Intellectual Property Rights (TRIPS). The WTO regulates legal requirements for its members and provides room for negotiations and disputes (Müller et al. 2013: 16–17). According to the WTO, its “goal is to help producers of goods and services, exporters, and importers conduct their business” (WTO 2017). More recently, the focus is much more on non-tariff barriers that are also on the main agenda of the WTO Doha round. On its agenda are trade in tariffs, the abolishment of agricultural subsidies in the European Union (EU) and USA and the implementation of TRIPS as well as opening the markets for services (Müller et al. 2013: 16–17). The industrialised markets, in particular the EU, have pushed for further harmonisation behind the border. This means, for instance, also the “elimination of differences in national production and product standards that make regionally integrated production costly” (Lawrence 1996: 17). Drawing on this definition, the concrete issues of deep integration are very broad, but differ within specific trade agreements. They might include competition policy, investment regulations, trade in services , product standards, public procurement , intellectual property rights (including geographical indications ) and anti-dumping (Claar and Nölke 2012b; Ghoneim 2008; Evans et al. 2004; Lawrence 1996). Deep integration also includes the free movement of capital (Lloyd 2008: 20; Evans et al. 2004: 12–13) and is mainly discussed in the context of economic integration. It mostly draws on the theoretical economic integration conception of Balassa (1961) that sees deep integration as the final stage of political and economic integration (see Gasiorek and Holmes 2008; Ghoneim 2008). While deep integration offers a lot of flexibility with regard to domestic liberalisation objectives, it requires progressive liberalisation and regular renewal of liberalisation agreements in order to prevent backlashes or solidifying of the status quo. It also affects new policy arenas. Up until now, the integration project of the European Union has offered a role model of economic integration in the form of the harmonisation of national regulations (Lloyd 2008: 31; Young and Peterson 2006: 799). Besides the idea that trade in deep integration issues might have a positive impact (Ghoneim et al. 2011: 27), Chang argues that the national political space for trade and industrial policy is limited due to global economic institutions or bilateral trade agreements (Chang 2005: 20–21). It is more than just the regulation of tariffs, as it continues to address more and more policy fields over time to create a good business environment in all areas of life, for instance, in the US and Canadian proposal, even health and security were discussed for further harmonisation and standardisation (Ayres 2004). In addition to economic integration, deep integration is also seen as a political project to inscribe liberal norms and the ideas of the global North in global economic institutions and bilateral trade agreements (Claar and Nölke 2012b: 12; Langan 2009: 421; Young and Peterson 2006: 808–809).

In the WTO debate, these deep integration issues were called “Singapore issues”, WTO plus or new-generation issues. However, the Southern countries rejected these issues in the multilateral system at the WTO ministerial conference in Singapore in 1996. The EU has pushed the deep trade agenda due to its own experience with its integration project at the WTO meetings in Seattle (1999) and Doha (2001) (Young and Peterson 2006: 803–804). In the Global Europe Strategy , the European Commission demanded a “sharper focus on barriers to trade behind the border” (European Commission 2006: 6), but due to the change in the international balance of power because of the rise of protest in developing countries in Doha and Cancun (in the year 2003), a common negotiation line for deep integration could not be incorporated in the WTO (Young and Peterson 2006: 802–803). This developed into a crisis of the multilateral system and the rise of bilateralism in trade and investment policies (Behrens and Janusch 2012: 33–36). Subsequently, the European Union and the USA have included deep integration issues in their new bilateral and regional trade agreements with the global South (Shadlen 2005). The USA has twenty free trade agreements and negotiates regional agreements like the Trans-Pacific Partnership (TPP) Agreement with Asia and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union (United States Trade Representative n.d.). The USA has failed to negotiate free trade agreements, for example, with the Southern African Customs Union (SACU) (Draper and Khumalo 2008). The EU also has a high number of trade agreements, but not all are free trade agreements (European Commission 2017a). Within the negotiations, the EU and the USA focus on different policy areas, for example, the EU on competition policy and the USA on labour regulations, although both support the harmonisation strategy itself. Both differ in terms of flexible juridical texts (in the case of the EU), while the USA uses standardised legal texts (Ahearn 2011: 13f, 17f; Horn et al. 2009).

In practice, the change in the nature of EU bilateral and regional trade agreements appeared in the EU’s Economic Partnership Agreements (EPAs) with the African, Caribbean and Pacific (ACP) states. With the EPA, the EU changed the nature of its trade agreements from a developmental approach with non-reciprocal trade preferences to a deep trade agenda with reciprocal trade (Elgström 2009: 21–22; Faber and Orbie 2009b: 4). Already in 1996, the EU examined its relationship with the ACP states and als...

Table of contents

• Cover
• Front Matter
• 1. Introduction and Theoretical Focus
• Part I. South Africa’s Political Economy
• Part II. South Africa’s Class Relations in Economic and Trade Policy
• Part III. Reconstructing the Process: South Africa’s Classes and the Economic Partnership Agreement
• Erratum to: South Africa’s Political Elite and Its Political Objectors
• Back Matter