Chris Gibbons:
Global trade talks have collapsed. The so-called Doha round of World Trade Organisation talks were suspended this morning in Geneva after major trading powers failed in a last ditch bit to overcome differences on reforming world farm trade which of course, lies at the heart of the round.

The Doha round has been underway for five years, stumbling for much of the time over the question of how far rich nations would go to dismantle their huge farm subsidies and open up their markets. After the breakdown, India, the European Union, pointing the finger firmly at the United States saying Washington have been demanding too high a price for cutting into some $20-billion it spends annually on farm subsidies. And experts are saying the collapse of these global trade talks is bad news for Africa.

Let’s get an experts opinion. Free Market Foundation executive director is Leon Louw joining us from Johannesburg. Leon, good evening to you and welcome to the 'World at Six'. These talks were doomed many months ago, weren’t they?

Leon Louw:
Well if not years ago; I attended the talks at Cancun where there was also a so-called breakdown, and then of course, they carried on and it might well do after this. Everyone sees gloom and doom at the time because everyone is holding thumbs and holding their breath that something will come out of it.

But I think what is important for us to understand is in Africa, there was not that much in this for Africa, for example, there would have been a reduction of cotton tariffs, which would have been very useful for East Africa. But I think there is some exaggeration in the comments about the implications for Africa.

Africa was really not a big feature in the current round of talks and what Africa can do is actually more for itself than to worry about Doha; that is simply to breakdown trade barriers within Africa. It is quite interesting and no-one ever talks about that, but the trade barriers between African States, are actually greater than as between Africa and the first world.

Chris Gibbons:
This of course is one of the key points of the United States, which is being cast as a villain in all of this. They are saying they need far more access to global markets especially in the developing world for a cut in farm subsidies to be worth their while.

Leon Louw:
Yes, whether the US is being unreasonable or not is hard to say, I’m sure their reply would be that Europe is being unreasonable because it won’t allow products in and it has trade barriers as subsidies. They amount to the same thing. It makes it very difficult for third world countries to export to either Europe because of trade barriers or America or because of the American subsidies. But in the third world, we don’t have to sit back and thing we have to be victims of what the first world does.

The point is, if the first world wants to send in cheap subsidised food to the third world, we aught to be pleased and not distressed. Of course our farmers will be distressed, but we should get on and do other things then. If somebody gives food to the third world, we call it aid and we are thankful. If they give us cheap food, why aren’t we equally thankful?

What the third world really should do, Africa really should do, and South Africa specifically we should do is what our minister Trevor Manual has been doing over the years; is get on with reforming our own trade policy.

It is quite clear from international comparisons that countries with freer trade, unilaterally, it does not have to be bilateral. It can be of course, what this will be followed by is bilateral trade negotiations, and perfectly ways of opening access to markets. But even unilaterally, you can do a great deal and countries that have unilaterally freed up their trade barriers, as we have done to some extent, have been huge beneficiaries. Highest growth countries in the world are the ones with the least trade barriers. So you don’t really have to, in the third world, wait for Europe and America to get their act together as between them. This is a scrap between them, and where the elephants are; the grass gets trampled if you stand under the elephants, we don’t have to do that.

Chris Gibbons:
Leon, Cosatu would disagree vehemently, they are arguing for much higher protective measures all around our economy to keep their members in work. Do they have a point?

Leon Louw:
They do have a point. Their members would be kept in work, but you must understand that their members are producing uncompetatively and unproductively at the expense of the consumers, namely the poor. What you have to say is the people who, their members compete with, are not, for example, Chinese clothing manufacturers or textile manufacturers, but actually Western Cape Wine farmers and labourers.

What happens is, we put wine on ships and send it out into the Indian Ocean and it returns in the form of clothing and by miraculous bioconversion that happens at sea. The point is that exporters are the ones who are competing with uncompetitive local producers and so Cosatu had in mind that some of its members who are simply in uncompetitive industries should be protected at the expense of the South African consumers, and that is what we need to understand the trade-off is.

The trade-off is, do we want cheap products and a big range of choices for low income and unemployed South African consumers, or do we want to protect relatively small numbers of workers in uncompetitive industries. That is the choice you make as a country. That is a choice we make.

Chris Gibbons:
That is Leon Louw, Free Market Foundation executive director, talking to us from Johannesburg.