Mauritius Trade Report by Siyaduma Biniza.pdf

7/30/2019 Mauritius Trade Report by Siyaduma Biniza.pdf

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The Republic of MauritiusTrade-Related Intellectual Property and E-commerce Sub-Council

Trade Report from the Cape TownRound of the WTO Negotiations

by Siyaduma Biniza*

* Siyaduma Biniza is a final-year student at the University of Cape Town studying towards a B.Soc. Sci. in Philosophy, Politics and Economics. This Trade Report has been prepared for theApplied International Trade and Bargaining Course (a WTO simulation).


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Table of Contents

Letter to the Trade Minister ....................................................................................................................... 2

Introduction ..................................................................................................................................................... 3

Section One: Economic Context .............................................................................................................. 3

Economic Summary and Objectives .................................................................................................. 3

General Strategy ........................................................................................................................................ 5

Double-Tax Treaties ............................................................................................................................... 5

Small Island Developing State (SIDS) Challenges......................................................................... 6

Food Security............................................................................................................................................ 7

Information Communication Technology (ICT) and E-Commerce ......................................... 8

Legislative Capacity Related to E-Commerce and Intellectual Property Rights .................. 9

Section Two: Agenda Setting and Bargaining Round ................................................................... 10

Challenges, Strategies and Outcomes of Agenda Setting ...................................................... 10

Challenges .............................................................................................................................................. 10

Strategies ................................................................................................................................................. 12

Outcomes ................................................................................................................................................ 16

Assessment of Mauritius Position at the End of Agenda Setting Round ......................... 18

Challenges, Strategies and Outcomes of Bargaining................................................................ 19

Challenges .............................................................................................................................................. 20

Strategies ................................................................................................................................................. 21

Outcomes ................................................................................................................................................ 24

Assessment of Mauritius Position at the End of Bargaining Round ................................... 38

Section Three: Conclusion ........................................................................................................................ 41

Executive Summary and Recommendation ................................................................................. 41

Bibliography ................................................................................................................................................... 43


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Letter to the Trade MinisterThe Cape Town Round of the WTO negotiations began with some challenges for

Mauritius. Firstly, the Republic of Mauritius only had one delegate pursuing all its

national interests at the negotiations. This meant that the rounds success depended

heavily on co-ordinating my strategy with other countries. Moreover, this required

extensive bargaining with other countries for interests in other sub-councils that

Mauritius had no representation in.

Secondly, due to the transitory state of Mauritius small economy and its unique

challenges, it was difficult to position domestic interests within the pre-existing WTO

discourse and the agenda. Mauritius economy is not strictly similar to other Sub-

Saharan African states and other developing countries. Firstly, it is small and highly

liberalised. But at the same time the economy is extremely vulnerable to external

shocks and it does not benefit from economies of scale like other larger developing

economies; because Mauritius is a small island developing economy. Therefore,

pursuing domestic interests required a multi-framework strategy and extensive

planning. Moreover, this meant that Mauritius had to win the trust and support of all its

alliances, and rely on good faith due to limited room for bargaining power, even

though every alliance was made with strategic pre-emptive commitment devices.

Lastly, due to limited representation, I had the challenge of getting all the important

information need to adjust my strategy at every milestone during the negotiations.

Therefore, I had to overcome the challenges of positioning Mauritius interests within

the World Trade Organisations discourse, maintaining useful alliances and strategically

co-ordinating to secure national interests. However, as this report will illustrate, the

efficacy of my strategy and its efficient implementation resulted in overall success in

the Cape Town Round of WTO negotiations.


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Introduction

The recent history of the Republic ofMauritius economy shows that it has performed

well above average in comparison to other Sub-Saharan African countries. But the

country faces new challenges as the world recovers from the 2008 global recession and

more recent Eurozone crisis. Furthermore, as a small island developing state (SIDS),

Mauritius faces unique vulnerabilities related to its location, size, and both its human

and natural resources. Therefore Mauritius faces vastly different challenges to those

faced by developing countries (DCs) and less developed countries (LDCs). Thus, this

report assesses the performance and the success of Mauritius strategy during the Cape

Town Round of World Trade Organisation (WTO) negotiations; paying special attention

to the unique vulnerabilities and challenges faced.

This report is divided into three sections. The first section is a brief summary of the

economic context in Mauritius and the general goals that were pursued at the WTO.

The second section deals with the challenges, strategies and outcomes during the

agenda setting and bargaining stages of the negotiations; and an assessment of

Mauritius position at the end of each round. Finally the report concludes with an

executive summary and recommendations.

Section One: Economic Context

Economic Summary and Objectives

The Mauritian economy has shown resilience against the 2008 global recession, and

the most recent European downturn; mostly due to a resurgent textile industry and the

strong performance of its financial sector1. The resurgence of the textiles industry has

1 See (Sobhee 2009) Structural transformations and macroeconomic reforms for a brief background onMauritius economy in The economic success of Mauritius: lessons and policy options for Africa.


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ameliorated the resilience of the Mauritian economy. However, tourism has taken a

slump after the 2008 global recession even though it still forms an integral part of the

services trade2. Furthermore, the economy has lost ground in international economic

rankings even though it remains high amongst other African countries. For example,

Mauritius is still the highest African country in the World Banks Ease of Doing Business

rankings and the Ibrahim Index of African Governance3.

The economy has maintained relatively high growth mostly due to economic

restructuring that has been effective at mitigating exogenous shocks and global

economic changes whilst allowing diversification of the economy4. This has allowed

Mauritius to exploit new opportunities that offer higher returns; and thus diversifying

remains a strong interest of the economy. For example, new opportunities in

knowledge economics, information and communication technology (ICT) and financial

services have become the most important; thus government has focused on

developing Mauritius into a cyber hub and a gateway between Asia and Africa 5.

Thus, improving the strength of Mauritius financial services industry and expanding

the services sector by developing opportunities in ICT and other high-return services

has been the core of my focus during the Cape Town Round of WTO negotiations.

Furthermore, mitigating the challenges related to isolation of Mauritius from

international markets, the economys smallness, and human and natural resources has

also been a high priority during the negotiations.

2 See (Sobhee 2009) op. cit.

3 See (Desai and Tulsidas 2012) The Mauritian Economy: 2012 Outlookan investment outlook report.4 See (Sobhee 2009) op. cit.5See Policy lessons for Africa section in (Sobhee 2009) op. cit.


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General Strategy

Double-Tax Treaties

As part of it economic restructuring to improve global competitiveness, Mauritius has

undertaken significant liberalisation policies to stay keep up with the global trends. But

this this has significantly reduced fiscal revenues. However, the strong financial sector

and efficient tax regime have offset losses to fiscal revenues due to liberalisation6. This

strength has been further improved by Mauritius 33 double-tax treaties7, which take

advantage of Mauritius strong off-shore banking regime and its financial services

industry strength. Therefore, Mauritius has the interest in further improving the

services sector by increasing its set of double-tax treaties.

These double-tax treaties have attracted flows of foreign

direct investment (FDI) through Mauritius due its strong

offshore banking regime and the tax benefits resulting

from these treaties 8 . Furthermore, Mauritius has a

comparative advantage because it is a politically stable

low-tax area; and it is the only International Financial

Centre that is member to all the significant African

regional organisations such as the Common Market of

Eastern and Southern Africa (COMESA), the Southern

African Development Community (SADC) and the African

Union (AU)9. Moreover, in addition to their expansion of Mauritius financial services

industry, double-tax treaties are an important source of tax revenues through resident

based taxation, i.e. taxation of foreign businesses and persons doing business in

6See Shortcomings of reforms in (Sobhee 2009) op. cit.7See Mauritius a report by (AfDB/OECD 2008) inAfrican Economic Outlook.

8 See (Aycock 2008)Anxious to keep a place in the sun, in the Financial Times Special Report on Mauritius.9See Comparative Advantage section by (Balloo and Sood 2012) in Double Tax Treaties in Africa Mauritius and Seychelles.

Source: Positioning Mauritius inthe world Acanchi 2011


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Mauritius. Thus, Mauritius tax treaties are of great importance and I had a clearly

defined interest in expanding the set of double-tax treaties and extending the time-

limit of those which already exist.

Small Island Developing State (SIDS) Challenges

Aside from the global pursuit of double-tax treaties, the Government of Mauritius has

been at the forefront of the SIDS-network. The network of Small Island Developing

States (SIDSs) is a global grouping of Small Island developing economies, which

advocates for the development needs of SIDS pertaining to their size, location,

environment and social composition. The small size of SIDSs means that they cannot

fully benefit from liberalisation through economies of scale10. In addition, their isolated

location means they cannot participate in highly beneficial regionalism. Furthermore,

rising fuel and energy costs hinder the SIDSs integration into global trade as a

consequence of their geographic isolation; whilst environmental degradation has led

to alarming rates of rising sea-levels and natural disasters which are more severe than

previously experience11.

Map of Small Island Developing States

Source: Food and Agriculture Organisation (www.fao.org/sids/map/world.gif)

10 See the (SIDS 2005) report, International Meeting to Review the Mauritius Strategy for the further

Implementation of the Programme of Action for the Sustainable Development of Small Island DevelopingStates of 13 January, 2005, A/CONF.207/CRP.7.11 See (SIDS 2005) op. cit.


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Therefore, SIDSs face severe geographic and environmental challenges. Moreover,

innovation and development in SIDSs is hindered by dwindling human capital and the

lack of scientific and technological education12. As a result the SIDSs have collectively

committed themselves to mitigate the unique challenges they face which can be only

achieved through co-operation and multilateralism 13 . Thus, during the WTO

negotiations, I had an indispensable interest of collaborating with other SIDSs to lobby

for our common interests and overcome the unique vulnerabilities Mauritius faces as a

SIDS.

Food Security

Mauritius is a net food importer with some self-sufficiency in a few meat products but

highly dependent on imports for its demand of staple foods such as rice and grains14. In

the past Mauritius has depended on foreign exchange earnings from sugar exports to

indirectly finance its imports-dependent demand for food15. However, revenues from

sugar exports have declined drastically due to liberalisation and the phasing out of the

preferential market-access agreements (PMAs) that Mauritius benefitted from16. This

means that export revenues can no longer ensure food security to satisfy the domestic

demand; especially in the context of rising food prices. Therefore Mauritius is

challenged by its over-dependence on imports, low-levels of sufficiency, and soaring

food prices. Moreover, Mauritius is also concerned with mitigating economic and

geographic challenges related to its environmentally vulnerable agro-industry and

12 See (Bunwaree 2005) Reversing the Decline-Smallness and Human Capital in Mauritius a paper presentedat the IRFD World Forum on Small Island Developing States of 10-13 January 2005.13 See (SIDS 2005) op. cit.14 See section 2.2 of (Ministry of Agro Industry and Fisheries 2008) Blueprint for a Sustainable Diversified

Agri Food Strategy for Mauritius 2008-2015.15 See section 2.1 of (Ministry of Agro Industry and Fisheries 2008) op. cit.16 See (Bunwaree 2005) op. cit.


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Source: Positioning Mauritius in

the world Acanchi 2011

isolation from larger markets in addition to its small geographic terrain which is not

suitable for certain crops17.

Therefore, Mauritius has an interest in continued governmental support of the agro-

industry in exporting countries as this will reduce the price of its food imports;

especially in the European Union (EU) market where Mauritius imports most if its

agricultural products 18 . Furthermore, since the State Trading Corporation and

Agricultural Marketing Board has the prerogative of importing strategic goods 19, which

includes staples and other vital food products, Mauritius has an interest in securing the

prerogative of state trading enterprises (STEs) in agriculture. Moreover, STEs are vital

because they often have a monopoly on

certain products, which can be used as

an effective mechanism to regulate

demand, supply and prices20. Thus, I had

an interest in securing the prerogative of

STEs and finding diverse means to

ensure sustainable food supplies as an

integral domestic interest for Mauritius.

Information Communication Technology (ICT) and E-Commerce

Because we are in the phase out stages of its PMAs in textiles and sugar the

Government of Mauritius has had to various strategies to diversify the economy

through expansion of its services sector, which accounts for most of the domestic

17 See paragraph 5.0 (Ministry of Agro Industry and Fisheries 2008) op. cit.18See Mauritius section of(World Trade Organisation 2003) World Trade Profiles.19 See (Ntagungira 2008) Development of National AGOA Export Strategy (Mauritius 2008-2012) a report on

the African Growth and Opportunity Act of the United States.20 See (Mitra and Josling 2009) Agricultural Export Restrictions: Welfare Implications and Trade Disciplines aposition paper in the International Policy Council Agricultural and Rural Development Policy Series.


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production, by pursuing new opportunities in developing an information economy21.

Therefore I had an interest in pursuing a strategy to develop Mauritius into an

information and business hub thus expand its services sector, which depends mostly

on financial services and tourism as previously discussed.

Since these interests require heavy investment I also have an interest in utilising

existing trade ties to attract FDI. Furthermore, I had an interest in attracting FDI from

India to setup call-centres and other business process outsourcing-specific factors of

input attracting FDI from China to develop its computer production industry.

Moreover, I had an interest in attracting FDI to develop Mauritius ICT infrastructure

that is necessary to increase E-Commerce activity which can be integral to expand

services in Mauritius economy.

Legislative Capacity Related to E-Commerce and Intellectual Property Rights

The Government of Mauritius has committed itself to reviewing the existing intellectual

property rights (IPR) legislation and establishing an Intellectual Property Office and a

National Intellectual Property Council22, which is intended to strengthen the domestic

framework for IPR and harmonise domestic legislation and legislative capacity with the

international standards. This is also vital to facilitate e-commerce which is largely

challenged by global piracy. Therefore, I had an interest in ensuring that Mauritius has

all the necessary financial and technical assistance to improve its legislative capacity

and the existing legislation towards this end.

Furthermore, the legislative capacity of countries has implications in their ability to

utilise E-commerce which is affected by compliance with legal frameworks guiding

21 See (Sobhee 2009) op. cit.22 See (Ministry of Foreign Affairs, Regional Integration and International Trade 2011) Mauritius a foreignpolicy document for The Republic of Mauritius.


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acceptable transaction methods like the Electronic Transaction Act (ETA)23. The ETA

deals with security challenges and combats cyber-crime in various ways to ensure a

safe and regulated environment e-commerce; this is important for facilitating E-

commerce. Moreover, although e-commerce is an effective way to diversify the

economy and strengthen the tourism sector, Mauritius needs to take steps to ensure

consumer and business security to facilitate further investment and utilisation in e-

commerce. Therefore Mauritius security measures need to be harmonised with global

standards for greater consumer and investor confidence in its E-commerce.

Section Two: Agenda Setting and Bargaining Round

Challenges, Strategies and Outcomes of Agenda Setting

The strategy I took during the Agenda Setting stage of the negotiations was focused on

the abovementioned interests and ensuring that Mauritius diplomatic strengths were

evident to all delegations present at the Cape Town round. Furthermore, my motions

had a strong emphasis on the Doha Development Agenda calling for full cognisance of

the developing world in international trade. This was going to be my position so as not

to isolate Mauritius and to ensure that I had the backing of the majority who were DCs

and LDCs. Thus, although there were initial challenges with articulating Mauritius

interests within the WTO discourse and garnering support for my motions, I was able to

positively contribute towards the agenda; and I had a resounding success at making

my presence felt during the agenda setting round.

Challenges

Alliance-formation was of vital importance for securing Mauritius interests because

Mauritius only had a delegation in the Trade Related Aspects of Intellectual Property

23 See the Information and Communication Technologies Authority (2004) The ICT Sector in Mauritius, anoverview of the state of ICT in Mauritius.


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Rights and E-commerce Sub-council (hereinafter referred to as the TRIPS sub-council).

But my attempts at alliance-formation with Mauritius traditional trade partners in the

EU such as France, the United Kingdom and Netherlands were ineffective because the

EU members cannot undertake any bilateral actions without the whole EUs support.

This made co-ordinating with these traditional trade partners almost impossible and

unrealistic. Furthermore, alliance-forming difficulties were exacerbated by the absence

of India from the TRIPS sub-council. But this became an opportunity to further

Mauritius interest in other sub-councils where India had a delegation.

Map of Mauritius Export Partners

Source: International Trade Centre (www.intracen.org/mat/)

Nevertheless, the presence of China, and Antigua and Barbuda in the TRIPS sub-council

was an opportunity that I embraced fully because these countries were best suited for

alliance-formation for various reasons. Firstly, China is one of Mauritius major trading


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partners. Secondly, Antigua and Barbuda is a SIDS with similar, if not common, interests

to Mauritius. Therefore this was an opportunity for co-ordinating with these

delegations and collectively bargaining to lobby for an agenda in our interests.

Furthermore, the active role played by Estonia as a poorer member of the EU, also

offered me a chance to align Mauritius with the EU; albeit limited due to the virtually

inexistent trade ties between Estonia and Mauritius.

I also had the challenge of articulating Mauritius interests in the context of the vaguely

developmental agenda established in the Doha Round for the TRIPS sub-council.

However, as mentioned earlier, I was intent on ensuring that delegations were

cognisant of the Doha Development Agenda at every step of agenda setting across all

levels of negotiation. Moreover, since I was the only representative Mauritius had, this

required highly extensive co-ordination with allies in other sub-councils to ensure that

the developmental agenda was being recalled within the various discourses of each

sub-council.

Strategies

Therefore, within the TRIPS sub-council, I decided to focus on three important interests

that were: promoting e-commerce, increasing legislative capacity to advance IPRs

protection, and TRIPS-related public health issues. This allowed me to narrow down

and refine the extensive agenda within the TRIPS sub-council so that I could articulate

Mauritius interests within the pre-existing discourse. Furthermore, this allowed me to

align Mauritius with the three aforementioned countries that were in the TRIPS sub-

council. This is evident in the motions forwarded by Mauritius some of which are:

1. We agree to discuss liberalization of all sectors related to e-commerce in developingcountries and LDCs, specifically telecommunication and banking; to attract FDI in

infrastructure to promote e-commerce.


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2. We agree to discuss the technical assistance for developing and LDCs to establishbetter understanding of Intellectual property protection and rules of engagement.

3. We would like to discuss adjustments to the quota requirements on the production ofgeneric pharmaceutical under compulsory licensing for exports to developing

countries and LDCs.

4. We agree to discuss ensuring that any e-commerce regulation and law is in line withstandard environmental procedures and the developmental agenda already finalized

within the WTO.

Firstly, all these motions dealt directly with some the interests outlined earlier in this

report. These include Mauritius interests in expanding its services sector through

development of ICT and e-commerce and mitigating Mauritius SIDS challenges and

legislative capacity-building. Secondly, these motions also allowed me to develop

alliances primarily with Antigua and Barbuda, China and Estonia and other

delegations by aligning our interests within the negotiations. The promotion of e-

commerce was in line with the interests of China, Antigua and Barbuda, the United

States of America (US) and Estonia. In addition, increased respect of IPR was important

to send signals for further co-operation between Mauritius, Estonia and Germany;

which was intended to allow me to develop an alliance relationship with the EU. Lastly,

TRIPS-related public health concerns were in the interest of SIDS, and other DCs and

LDCs in general, because public health challenges exacerbated their human capital

problems24. Thus, my strategy was intended to articulate Mauritius interests within the

current TRIPS sub-council discourse whilst allowing for strategic alliances. However,

these were not the only interests that I needed to secure.

So I had to extend my strategy beyond the TRIPS sub-council to secure Mauritian

interests in other sub-councils. Therefore I decided to rally all the other SIDSs in the

Cape Town Round so that we could lobby our interests across all sub-councils and also

increase the lobbying power of SIDSs through collective bargaining. This was

extremely useful because of highly converging interest of all the SIDSs. So I contacted

24 See (Sobhee 2009) op. cit.


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the delegations from Cuba, Fiji, Papua New Guinea and Singapore who the only other

SIDSs in the Cape Town Round outside the TRIPS sub-council; and I established a SIDS-

network.

I established the SIDS-network for the purpose of co-ordinating strategies with allies

with common interests as well as securing Mauritius interests outside the TRIP sub-

council 25 . I therefore prepared an agreement amongst the SIDSs to facilitate

information-sharing and co-ordinating strategies26. In addition, the SIDSs signed an

agreement at the onset of the agenda setting stage of negotiations, which guided the

SIDSs throughout the Cape Town Round of WTO negotiations. This agreement was a

commitment device for all SIDSs to ensure that each SIDS shared information and kept

SIDS-specific information confidential to facilitate the pursuit of each members

interests in alignment with other SIDSs. Moreover, this was intended to consolidate the

bargaining interests and lobbying power of all SIDSs.

Thus, the SIDSs met regularly and shared information and developed strategies to

forward SIDSs interests across all sub-councils where we had representation. This left

the SIDSs without representation in two sub-councils. Moreover, because of

converging interests and the fact that each SIDS faced the same challenge of being a

lone-delegate, my strategy to pursue Mauritius interests in other sub-councils was

ameliorated by the consolidated strategy of all SIDSs27

ensuring greater creativity and a

larger network of influence. Furthermore, because I drafted the rules and I was in

control of the administrative documents, I alone explicitly knew the rules set out in the

25 See Reminder: SIDS Meeting, Bargaining Round and SIDS Meeting announcements in the Diplomaticinfluence section of the Annex.

26 See the SIDS Agreementin the Non-Trade Related Agreements section of the Annex.27 See the Summary of Small Island Developing State (SIDS) Interests and Strategies in the DiplomaticInfluence section of the Annex.


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SIDS agreement and their exact implementation; so I could manipulate the rules and

use them to my advantage if the need arose as a strategic move.

Lastly, Mauritius is also a member of the African Union (AU). Therefore, during the Cape

Town Round of WTO negotiations, I was also part of the AU grouping of countries

present at the negotiations which was established by the delegations from Botswana

and Ghana. The AU also signed an agreement, similar to the SIDS agreement, which set

out rules of engagement and confidentiality. In addition, the AU group had delegations

from other delegations that SIDSs had no representation in and each sub-council had

an AU representative reporting on the developments on a weekly basis. I was

appointed as one of the AU delegates reporting on the TRIPS sub-council28. Therefore,

each member was committed to sharing the information that they were privy to in

good faith hoping that other delegations would have the same commitment as

outlined by the AU agreement. This was necessary for ensuring that each members

interests were sought after by consolidating the similar, yet sometimes diverging,

interests of the AU states.

28 SeeAfrican Union Meeting in Diplomatic Influence section of the Annex.


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Moreover, because all AU delegations except Egypt and South Africa had lone-

representation, the AU depended on extensive and committed co-ordination. Thus,

the AU offered an opportunity to have Mauritius interests sought after, especially in

the Agriculture and the Services, Labour and Environment (SLE) sub-councils; in return

for my commitment to ensuring that other AU members interests were secured in the

TRIPS sub-council. As a result, through extensive co-operation, Mauritius was able to

ensure that all of its interests were sought after.

Outcomes

The Agenda Setting Round ended with Mauritius having made a considerable mark in

the negotiations. I had gained prestige amongst other countries for advocating for

Doha Developmental Agenda which won the support of the many LDCs and DCs that

were in the majority within the negotiations. Moreover, I had not only been able to

steer the agenda towards greater cognisance of the DC and LDC needs but, I was also

able to articulate Mauritius interests within the pre-existing WTO discourse of the Doha

Round whilst introducing more recent developments in world trade.

In addition, I had established a highly effective and efficient network of co-operative

ties with the SIDSs that represented considerably strong voting leverage through

scattered regional blocs in the Caribbean, Australasia, Southeast Asia and Africa.

Moreover, through my co-operative strategy with the SIDSs, Mauritius was able to

ensure that its interests in expanding its service sector were articulated by Singapore in

the SLE sub-council. Furthermore, Mauritius interests in expanding market access

represented by Cuba in the Non-Agricultural Market Access (NAMA) sub-council; and

general international trade interests were secured by Papua and New Guinea and Fiji in

the sub-council in-charge of Harmonisation of Regional Trade Agreements sub-council.


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Lastly, Mauritius interests in the TRIPS sub-council were successfully pursued through

my diplomatic efforts that won over the support of Estonia and China 29 in addition to

Antigua and Barbudas co-operation. Furthermore, some of Mauritius interests in food

security were sought after by the AU. But the AU was dealt an insurmountable blow by

Botswanas violation which undermined the agreement resulting in a unanimous vote

of no confidence. Thereafter, the AU lost much of its legitimacy and many members

lost commitment to the group.

After the AUs diplomatic and co-ordination failure I established a network of all LDCs

and DCs that were present at the Cape Town negotiations30. I established the network

exclusively for information-exchange purposes and so that delegations could lobby for

support of any motions they felt were in the interest of LDCs and DCs before they were

voted on. But I also strategically added Bulgaria in this network. I added Bulgaria

because the delegation, which was a member of the TRIP sub-council, was not actively

engaged in the negotiations but very active in relaying information from the sub-

council to the rest of the EU. Thus, adding Bulgaria in the online LDCs and DCs network

was strategically useful for creating a leak; so that the EU would be privy to the co-

ordinated strategy of LDCs and DCs, which offered a chance for co-operation and

foreign aid offers. This was resoundingly successful and Bulgaria repeatedly consulted

before bringing forward developing world-friendly amendments or motions of

particular interest to the EU31.

29 See the China and Estonia Datasetin the Diplomatic Influence section of the Annex.30 See the Welcome to the DCs and LDCs Tab and WTO Trade Profiles announcements as well as This is a

list of all Developing Countries (DCs) and Least Developed Countries (LDCs) in the Cape Town Round of theWTO negotiationsin the Diplomatic Influence section of the Annex.31 See the RE: MOTION SP5 in the Diplomatic Influence section of the Annex.


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Assessment of Mauritius Position at the End ofAgenda Setting Round

Mauritius was in a considerably secure position at the end of Agenda Setting. I had also

gained enough prestige within the TRIPS sub-council and within the Ministerial Council

(MC). I made Mauritius presence felt through key amendments to motions and

diplomatic efforts to secure Mauritius interests and also rally the support of other DCs

and LDCs. One such occasion was a key amendment to a Irish motion for the

establishment and enforcement of an international labour standard within services

industries, which feature in international trade, with the aim of reducing worker

exploitation and abuse. Mauritius amended this motion to remove the establishment

of a labour standard within services completely, which needed a two-thirds majority

vote but did not pass even though it got a majority vote 32.

Therefore this amendment, which was the only amendment that did not strictly fail,

failed only because the EU and US voted against it and it did not achieve two-thirds of

the votes in its favour. Nevertheless my amendment was successful in drawing the

32 See Irish Labour Motion in Diplomatic Influence section of Annex.

0

20

40

60

80

100

120

20-8-2012 1-9-2012 3-9-2012PercentageofVoteConvergen

cewith

Mauritius

TRIPS Sub-council Weeks

Vote Influence in TRIPS Sub-council

SIDS solidarity

China Solidarity

EU Solidarity


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attention of all LDCs and DCs to this crucial motion that was against their interest,

which might have passed by strict majority otherwise. Thus the motion, and all its

amendments by developed countries, failed outright. Notwithstanding the resounding

success of my co-ordination and diplomatic strategies, more work was required during

the Bargaining Round to further fulfil what was needed to secure Mauritius interests.

Challenges, Strategies and Outcomes of Bargaining

Mauritius position at the end ofAgenda Setting Round meant that its allegiances and

co-operative strategies as well as competitors were blatantly apparent. Thus, my

strategy at the Cape Town Round of the WTO relied heavily on Mauritius diplomatic

influence and co-ordination power. In this regard, at the onset of bargaining, I had

already established Mauritius as an active intermediary between Asian countries and

other African countries which had gained diplomatic headway for Mauritius. Due to my

diplomatic efforts, DCs and LDCs keenly offered their support for Mauritius, because I

had established a perception of Mauritius as an advocate for the developing world;

mostly due to my articulation of the consequences that the negotiations had for DCs

and LDCs33.

This was useful for securing both Mauritius interests as a SIDS and in advocating for full

cognisance of the development agenda thus securing Mauritius developmental

interests as well. In addition, this very co-operative strategy relied on my ability to

consolidate the converging interests of all other SIDSs to lobby their respective

regional groups and ensuring Mauritius interests and those of other SIDSs. Moreover, I

intended on using existing international trade ties to both strengthen Mauritius

33 See Attention GPA Motion, In preparation for MCs, SP5-9-18, In preparation for MC (from SP5), SP5-9-20and Financial Services [Motion 58] by Switzerland announcements and attachments in the DiplomaticInfluence section of the Annex.


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comparative advantage and diversify its economy whilst dealing with some of the

unique vulnerabilities it faces as a SIDS.

Therefore, instead of pursuing Mauritian interests through every action, I separated its

interests according to different frameworks under which they could be pursued.

Primarily, I pursued Mauritius interests through bilateral and plurilateral endeavours

outside of the TRIPS sub-council and the MC. This is shown by the various agreement

concluded as discussed in the outcomes section below. A secondary strategy was

focused on the sub-councils and the MC. Therefore, the greatest challenge, which I met

with resounding success, was co-ordinating this seemingly scattered strategy to secure

national interests and creating an environment for greater co-operation in future

international trade for Mauritius.

Challenges

My biggest challenge during the Bargaining Round was consolidating the scattered

progress, at various levels of the WTO negotiations, and securing national interests.

Moreover, I faced the challenge of a lone-delegation with representation in the TRIPS

sub-council only. Furthermore, I had to stay vigilant of being taken advantage because

I had limited access to vital information at the various levels of negotiation as a lone-

delegation. Therefore, given that there were delegations with up to 22 votes and 11

delegates in all the sub-councils, I was at a great comparative disadvantage. However,

the most aggravating challenge I faced was negotiating with delegations that had little

to no grasp on their countries interests. Furthermore, because Mauritius traditional

trade partners in the EU were weakly co-ordinated making it almost impossible to

conclude any plurilateral agreement, I had to face the challenge by pursuing Mauritius

interests through alternative means.


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Strategies

There were three groupings that I used to my advantage in securing Mauritius interest.

The most effective grouping was the network of SIDSs which met regularly, shared vital

information and co-ordinated the strategies of all SIDSs to secure individual interests

which were very convergent. The SIDS network was vital because it gave me

trustworthy representation and security for Mauritius interests in other sub-councils

where Mauritius had no delegation. The SIDS network was trustworthy because all the

SIDSs faced very similar challenges and vulnerabilities as mentioned earlier and thus

most of their individual interests were converging. Furthermore, the group of SIDS was

small enough to overcome co-ordination challenges evident in larger groups.

However, the Singaporean delegation was very inactive. Singapore had the worst co-

operation in all the SIDSs co-ordination efforts. Nevertheless, I directed the progress of

the SIDS network by ensuring that all member countries submitted a summary of their

interests within the WTO34 which was used to create an overall summary of the SIDS

network strategy and interests. The summary of all SIDS interests took into account all

individual interests, and it was publicly available for all SIDSs, which was vital in guiding

all SIDSs actions during the Cape Town Round of negotiations 35 . Thus, the SIDS

network met regularly to deliberate on strategies, important motions and their

consequences for SIDSs, and important treaties that were in SIDSs interests36.

In addition to establishing the SIDSs network, I established a network of all LDCs and

DCs as previously mentioned. I established this network because I had realised the

importance of information to securing its interests; and the declining dependability of

the AU had left me without some vital information. Even though Mauritius was

34 See Individual SIDS Strategies in Diplomatic Influence section of the Annex.

35 See the Summary of Small Island Developing State (SIDS) Interests and Strategies op. cit.36 See SIDS Meeting 10 Mins Before MC, Botswanas Motion on Sugar and SIDS on Services announcementsand attachments in the Diplomatic Influence section of the Annex.


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receiving very useful information from the SIDS network, there were no SIDS in a few of

the instrumental sub-councils which deal with Agriculture and WTO Rules for Dispute

Settlement and Implementation Issues. Furthermore, the inadequate co-operation of

Singapore meant that Mauritius interests in the SLE sub-council were not sought after.

Therefore, I needed to ensure that I was privy to vital information from all sub-councils

so that I could adjust my strategy accordingly to mitigate possible harm or favour that

arose from these sub-councils.

Moreover, the LDC and DC network was extremely useful for lobbying for Mauritius

interests in that it allowed me to gain further support and leverage for any motions I

brought forward by garnering support from the member countries. The way in which I

established the network positioned Mauritius in such a way that it could disseminate

key information on motions with enough rhetoric, whether it was useful or not for all

LDCs and DCs, to gain the support of these countries. This also became very vital

because I now had enough leverage against developed countries.

This was shown by the great support offered by DCs and LDCs for Mauritius motion

that was seconded by Antigua and Barbuda, which sought to establish a working

group that would deal with Intellectual Property infringements in the industries related

to green technology and renewable energy. This motion was amended by Ireland,

which failed, and later Mauritius version of the motion passed with both the EU and US

voting against the motion which effectively showed the voting strength that DCs and

LDCs held in the Cape Town Round37. Thereafter, I had gained considerable prestige

and invigorated the confidence of DCs and LDCs against their fears that OECD

countries had the power to control negotiations.

37See Mauritius 5A Amendment in SP5-9-18 and TRIPS and Environment (Minutes from MC) in theDiplomatic Influence section of the Annex.


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Furthermore, the fact that Bulgaria was privy to DC and LDC-related strategic

information put me in a powerful position. The Bulgarian delegation was not actively

engaged in the negotiations and this information offered the delegate a chance to

engage in the discussion and also offer EU advice on how to deal with LDCs and DCs

that dominated the voting role. But Bulgarias delegate repeatedly consulted me

before structuring an EU counter-strategy, which gave me a chance to see what the

best effort the EU would give against the LDC and DC lobbying power38. Moreover,

because the Bulgarian delegate thought herself to have been accidentally added to the

network she shared the information with the EU offering my correspondence with her

as insider information that she was privy to; without knowing the strategic function

she served.

Lastly, Mauritius was part of the AU group which met to deliberate on sub-council

events and motions that were important to AU members. This group was of primary

importance for its lobbying of Mauritius interests in the Agriculture Sub-council

because most of the active AU members were in that sub-council. In addition to

meeting weekly and reporting on individual sub-council events, the group also had the

right to information on financial incentives offered to individual members. This was

extremely useful for realising competing interests as well as co-operative countries

within and outside the AU at the WTO negotiations.

For example, Mozambique held a motion that I brought forward in the TRIPS sub-

council, after I seconded his amendment to the motion. Thereafter, the Mozambican

delegate was financial incentive agreement to ensure that the motion was rolled back

at the MC meeting when it was mean to be up for a vote. Thus, I was able to utilise

information from the AU group to spot its competitors and co-operator to Mauritius

38 See RE: Services in the Diplomatic Influence section of the Annex.


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interest allowing me to adjust my strategy accordingly. However, co-ordination in the

AU was very volatile due to complex and diverging interests. Nevertheless, I quickly

learned how to deal with the competing interests.

Thereafter I purposefully raised vague motions in the TRIPS sub-council. The motions

were purposefully vague motion with the hopes that other delegates would amend the

motions and add the details that were necessary. Thus, after seconding an amendment

and many further strategic amendments by other allied delegations, which made the

motions clearly what I had in mind when submitting the motion. I would then add a

final inconsequential or clarificatory amendment that would be seconded by most of

the strategic amenders to the original motion resulting in the motion being passed

with Mauritius still holding the motion 39 . Thus my dynamic strategy was vital to

securing some of Mauritius interests.

Outcomes

- Double-Tax TreatiesAs previously mentioned, Mauritius has liberalised it economy extensively to stay

abreast with the global trends in international trade. But, even though this has led to a

loss in fiscal revenues from tariffs and customs duties, Mauritius strong financial sector

and off-shore banking regime has allowed Mauritius to secure 33 double-tax treaties40.

These double-tax treaties and Mauritius strong off-shore banking regime make for a

good mix of policies that attract both FDI and redirected investment into its partner

territories. For example, India and Indonesia received 78% of their collective FDI (which

was the bulk of FDI for India) from investments through Mauritius in 200441. Thus, I

pursued more tax treaties with countries such as Pakistan; and extended existing tax

39 See Motion Holding Strategy (Minutes from SP) in the Diplomatic Influence section of the Annex.40 See (Aycock 2008) op. cit.41 See (Aycock 2008) op. cit.


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treaties countries with countries such as India whilst. This will grow Mauritius financial

services sector and take advantage of its strong off-shore banking regime.

Therefore, I undertook a two-fold strategy in pursuing this national interest. Firstly, I

sought to extend some expiring double-tax treaties for ten years. However, I bargained

with countries to secure this interest in order to pursue other interests. Most of my

rhetoric in this regard was based on the bargaining chip that the greatest beneficiary to

the double-tax treaty is the other signing partner instead of Mauritius using the fact

that these double tax treaties attract FDI through Mauritius and into the other party.

This was central to my ensuring that its other interests were secured since this became

an essential bargaining chip because most countries in the Cape Town Round sought

to secure FDI as their national interest. So I would bargain to establish a double-tax

treaty or extending a pre-existing one in return for an FDI arrangement to incentivise

investment into Mauritius to secure the other general goals mentioned above. But I

used the benefit of asymmetric information to conceal the fact that foreign

governments would lose out on tax revenues from their domestic firms investments in

Mauritius whenever I was negotiating.

For example, I was able to secure Mauritius interest in expanding and diversifying its

services sector. I did this by extending the expiry date on the existing double-tax treaty

in return for concluding an agreement to establish computer software development

and business process outsourcing (BPO) industries after bargaining with India. So the

double-tax treaty was extended for FDI-friendly tax exemptions and staggered rebates

in the abovementioned industries42. Therefore I successfully concluded an agreement

that extends the double-tax treaty by ten years and offers impressively favourable tax

42 See Article 3.2 in the Bilateral Treaty between the Republic of India and the Republic of Mauritius in theTrade Related Agreements section of the Annex.


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concessions for Indian nationals willing to invest in Mauritius computer software

development and BPO industries. In addition to this, the agreement stipulates a work

force requirement in favour of Mauritian nationals43. This is intended mitigate human

resource challenges, such as unemployment and unskilled labour, whilst expanding

Mauritius services sector by establishing computer development and BPO industries.

Moreover, I was able to regain preference for Mauritius waning clothing and textiles by

securing market access into Indias clothing and textiles industry; and offering tax

rebates for Mauritian invests in India44. This is crucial because the phasing out of

Mauritius PMAs needs to be mitigated through a long-term strategy to regain

preference of Mauritius clothing and textiles. Thus, the bargaining outcomes of the

extension of the double-tax treaty with India are exponentially vital for securing more

than one of Mauritius interests.

Additionally, the double-tax treaty between Pakistan and Mauritius was also extended

by ten years. In this extension, Mauritius was able to expand the currently existing

preferential trade agreement (PTA) between Pakistan and Mauritius into a free trade

agreement (FTA), whilst protecting some of its vital goods45. The strategic decision to

expand the PTA into an FTA was justified by the need to expand on the limited scope of

the PTA because of the considerable progress that both Pakistan and Mauritius have

made since the implementation of the PTA in 2007. Moreover, this strategic move was

justified by the success and experience gained from the implementation of the PTA

and the higher potential of an FTA. In addition to this, the FTA is intended to create an

43 See Articles 3.5 and 3.6 in the Bilateral Treaty between the Republic of India and the Republic of Mauritius op. cit.

44 See Article 3.7 in the Bilateral Treaty between the Republic of India and the Republic of Mauritius op. cit.45 See the Bilateral Treaty between the Islamic Republic of Pakistan and the Republic of Mauritius and itsrelevant annexes in the Trade Related Agreements section of the Annex.


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enabling environment for diversifying Mauritius energy sources because of the large

natural gas reserves in Pakistan.

I also pursued new treaties as a second approach to Mauritius interest in double-tax

treaties. Therefore, I was successful at concluding eight vital tax treaties with Turkey,

the Mercosur group of countries, Egypt, and South Korea. Mauritius already has strong

trade ties with Turkey which culminated in an FTA that was signed in 2011. But

Mauritius and Turkey had not yet signed a double-tax treaty, which was neither being

negotiated nor awaiting signature at the time of Cape Town Round of WTO

negotiations. Nevertheless, I was successful in negotiating a double-tax treaty with

Turkey46; to create an enabling environment for further trade. Moreover, this was done

to further strengthen Mauritius financial services industry as mentioned above.

Mauritius has also been able to strategically secure a double-tax treaty with the

Mercosur group of countries which includes Argentina, Bolivia, Brazil, Paraguay,

Uruguay and Venezuela. I pursued this double-tax treaty in a two-fold strategy to

create a catalytic environment for FDI from Mercosur into Mauritius and regaining

preference for Mauritius sugar exports into Mercosur with Brazil in particular.

Firstly, the double-tax treaty is intended to increase FDI flows from Mercosur into

Mauritius specifically into Mauritius sugarcane industry and also establishing a biofuels

and renewable energy industry in Mauritius. Mauritius strategy to diversify the

economy and develop into a regional information hub requires heavy investment,

which should ideally be in renewable and sustainable energy sources to improve

economic growth and environmental sustainability 47 . Therefore this double-tax

46 See the Bilateral Double-Tax between the Republic of Turkey and the Republic of Mauritius in the Trade

Related Agreements section of the Annex.47 See the (Ministry of Renewable Energy & Public Utilities 2009) Republic of Mauritius Long-Term EnergyStrategy 2009 2025 Chapter 5.


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agreement is intended to attract FDI from Brazil specifically, since Brazil is a leader in

biofuels and other forms of environmentally energy sources 48 . Furthermore, this

agreement also stipulates a workforce requirement that is intended to help transfer

technological skills and develop skilled labour in Mauritius49. In addition to this, the

Mercosur group of countries have also pledged to offer tax concessions for

investments by their citizens into Mauritius sugar exporting industry. This is intended

to increase the production capacity and skills in the sugarcane export industry of

Mauritius.

Secondly, the agreement establishes a FTA between the Mercosur group of countries

and Mauritius. This agreement also offers preferential market access for Mauritius

sugar exports into Mercosur50. These arrangements are vital to further increase the

strength and comparative advantage of Mauritius sugar production. Moreover, the

agreement is vital to regain preferences for Mauritius sugarcane exports which have

losing preference due to the phasing out of the Lom Agreement51. However, this

arrangement was concluded through my strategic action during the WTO negotiations.

Before I had amended a motion by China in the TRIPS sub-council, which sought to

create a working group to deal with IPR infringements in industries related to green

technology and renewable energy, I bargained with a few countries that I intended to

add to the working; one of these countries was Brazil52

. Thus on the morning before the

relevant TRIPS and sub-council meeting; I extended diplomatic effort to these countries

48 See (Kogan 2010) Overview of the Copenhagen Conference section in Climate Change: TechnologyTransfer or Compulsory License?.49 See Articles 2.8 and 2.10 of the Plurilateral Double-Tax and Free Trade Treaty between Mercosur and theRepublic of Mauritius in the Trade Related Agreements section of the Annex.50 See Article 2.4 of the Plurilateral Double-Tax and Free Trade Treaty between Mercosur and the Republic of

Mauritius op. cit.51 See (Ministry of Foreign Affairs, Regional Integration and International Trade 2011) op. cit.52 See TRIPS and E-Commerce Lobby (E-Mails) in the Diplomatic Influence section of the Annex


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and offered each country a chance to signal an interest to make a reciprocal deal with

Mauritius which Brazil responded to53.

Then I amended the Chinese motion and managed to lobby enough support for the

motion to pass by strategically adding Germany, the US and Norway to the working

group. Adding these countries allowed the motion to pass because the EU and US have

a combined majority vote in the sub-council. Thereafter, I lobbied for the motion in the

DCs and LDCs network54 . My lobbying was successful because, after a failed

amendment by Ireland at the MC, my version of the motion passed with both the EU

and US voting against the motion55. Thus, I then approached Brazil to negotiate a

double-tax treaty as a reciprocal benefit of adding Brazil in the working group.

But since I knew that Brazil cannot get into any unilateral agreements; the arrangement

with Brazil was extended to include all the Mercosur member countries. Thereafter, I

had to convince the rest of the Mercosur member that this agreement was also in their

favour. But this was eased by the confidence of the Brazilian delegation which has

greater influence within Mercosur. Moreover, since the relationship between Mauritius

and Brazil was established on environmental consciousness ground; Brazil was willing

to advocate for an FTA between both parties, which allowed for preferential market

access for Mauritius sugarcane exports into Mercosur primarily for the production of

biofuels. Furthermore, Brazil was willing to make an agreement that would allow FDI

into environmentally-friendly energy research to establish biofuel and renewable

energy production in Mauritius56.

53 See TRIP an Environment Lobby Response (E-Mails) in the Diplomatic Influence section of the Annex.54 See TRIPS and Environmentop. cit.

55 See Working Group Lobby Influence (Minutes from the MC) in Diplomatic Influence section of the Annex.56 See the Plurilateral Double-Tax and Free Trade Treaty between Mercosur and the Republic of Mauritius op.cit.


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Thirdly, Egypt and Mauritius are both members of the COMESA with an FTA existing

between both countries; and other members of COMESA. However, Mauritius has not

reaped the full benefit of this regional trading bloc as a result there has been little trade

between Mauritius and other member states57. Therefore, in order to take advantage of

Mauritius comparative advantage in services, more specifically financial services, I

concluded a double-tax treaty with Egypt58. Furthermore, this double-tax treaty is

intended as a mechanism to attract more FDI into Egypt that is recovering from the

economic consequences of the Arab Spring and its dramatic regime change. Moreover,

this is intended to allow more trade between Mauritius and other African countries.

Lastly, following a failed extension and FDI arrangement between Mauritius and China,

I pursued a dual agreement with South Korea. This agreement establishes a double-tax

agreement with South Korea in return for an FDI arrangement to attract FDI into

Mauritius and develop a computer manufacturing industry59. This agreement has been

concluded establishing a double-tax treaty between South Korea and Mauritius as well

as extensive tax concessions and exemptions for South Korean investment into

Mauritius computer manufacturing industry60. The agreement also includes workforce

requirement ensuring skills and technical transfers61. Furthermore, this is intended to

allow Mauritius to fully utilise its comparative advantage to other African states.

- Small Island Developing State (SIDS) ChallengesAside from these treaties, I pursued a strategy in attempt to overcome the unique

vulnerabilities and developmental challenges Mauritius faces as a SIDS; which pertains

57 See (Sobhee 2009) op. cit.58 See the Bilateral Double-Tax between the Republic of Egypt and the Republic of Mauritius in the Treatiessection of the Trade Related Agreements section of the Annexs.59 See Article 3.1 in the Bilateral Double-Tax between the Republic of South Korea and the Republic ofMauritius in the Trade Related Agreements section of the Annex.

60 See the Bilateral Double-Tax between the Republic of South Korea and the Republic of Mauritius op. cit.61 See Article 3.3 in the Bilateral Double-Tax between the Republic of South Korea and the Republic ofMauritius op. cit.


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to its size, location, environment and social composition as mentioned above. In this

regard, I also signed onto a Trade Facilitation62 treaty drafted by Fiji. This treaty, which

established a bureaucratic customs union, also has provisions that state a commitment

by developed countries, and some developing countries, to assist the implementation

of this bureaucratic customs union through skills transfers, training and funding to DC

and LDC party countries. Therefore, with the signing of this treaty, which is intended to

harmonise bureaucratic customs process for party countries, allows for trade

facilitation between party countries, reducing inefficiencies and promoting trade flows.

Thus, Mauritius will be able to overcome the challenge of isolation and economies of

scale.

Further challenges Mauritius faces relate to innovation and development being

hindered by dwindling human capital and the lack of scientific and technological

education. In this regard, I finalised each new double-tax treaty with an FDI

arrangement that requires FDI to be accompanied by technical assistance. In addition,

Mauritius has been able to negotiate a workforce requirement for all FDI which ensures

greater skills transfer and employment opportunities.

Moreover, SIDSs also committed themselves to mitigate some of the unique challenges

they face as SIDSs through co-operation and multilateralism. Thus, many of the newly

enacted trade laws from the Cape Town Round have now introduced special and

differential treatment for Small Vulnerable Economies (SVEs) into the discourse, which

will go a long way towards mitigating the challenges SIDSs face. This was most useful

during the final MC meeting where the OECD countries were success at passing a

motion calling for extensive liberalisation of financial services by all WTO member

countries. However, this liberalisation was aimed at modes 3 and 4 which would result

62 See the Inside Treaty on Trade Facilitation in the Treaties section of the Annex.


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in more competitive OECD banks being afforded national treatment within all DCs and

LDCs. Therefore, because Mauritius has a strong off-shore banking regime63, I tried to

amend the motion to limit it to mode 1 which would be in Mauritius favour. But the

mounting amendments and the financial incentives handed out by OECD countries

made it clear to me that this motion would pass against Mauritius favour. This motion

had been flagged as one of the important motions that I would lobby against, which

failed. Nevertheless, my lobbying was very effective throughout most of the Cape

Town Round as illustrated by the graph of votes in solidarity with Mauritius during the

MCs.

Therefore, in collaboration with Fiji and Antigua and Barbuda, I was success in

advancing an amendment that afforded Mauritius (and other SIDSs) the same kind of

special and differential treatment as LDCs64. In addition to this, Mauritius also received

US$ 650 million in foreign aid from Belgium and the US to mitigate the potential

63 See (Aycock 2008) op. cit.64 See Services Liberalisation (Minutes from the MC) in the Diplomatic Influence section of the Annex.

0

10

20

30

40

50

60

70

80

90

100

PercentageofVoteConvergencewith

Mauritius

Ministerial Council Meeting Dates

Vote Influence in Ministerial Council

SIDS Solidarity

China Solidarity

India Solidarity

Source: WTO Secretariat Cape Town Round, 2012


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disadvantages of this motion65. Thus, even though this motion was not in Mauritius

favour, the foreign aid would go a long way in improving competitiveness. Moreover,

because of Mauritius relatively strong financial sector 66 , my amendment through

Antigua and Barbuda offers Mauritius LDC-equivalent treatment putting Mauritius in a

better position over all. Moreover, as the graph above shows, when Mauritius could not

count on support from India and China, its traditional trading partners, Mauritius had

the support of all the SIDS.

Lastly, I has signed onto an inside treaty that calls for liberalisation of services across

modes 1, 2 and 467. These are modes which will benefit Mauritius because of our

liberalised economy. Moreover, this treaty relates to liberalisation in Construction,

Healthcare, Financial, and ICT, which Mauritius has comparative advantage in allowing

further expansion of its services sector. Furthermore, where Mauritius is at a

disadvantage, this treaty will allow limited investment in these sectors. Since this treaty

also has a workforce requirement; future investments will have technical skills transfer

which is in Mauritius interest to overcome its human resource challenges. Thus, this

treaty will allow Mauritius to not only gain access to more markets but it will also

mitigate its challenges in human resources and develop its healthcare industry.

Similarly Mauritius signed onto a treaty, drafted by Fiji, which establishes a plurilateral

pharmaceutical company68. This company has the right to issue compulsory licenses.

This is vital since an earlier motion , which was hijacked by Mozambique, dealt with

the same challenge of access to limited generic drugs that Mauritius faces as public

65 See European Union (Belgium) and Summary of Foreign Aid Agreements between the United States ofAmerican and the Republic of Mauritius on Economic Aid and Development in the Non-Trade RelatedAgreements section of the Annex.

66 See (Desai and Tulsidas 2012) op. cit.67 See the Services Inside Treatyin the Treaties section of the Annex.68 See Pharmaceutical Company Treatyin the Treaties section of the Annex.


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health concern affecting its human resource wealth69. Moreover, because China and

India are party to this treaty, it will be very useful as these countries have large

production capacity. Furthermore, because this plurilateral pharmaceutical company

has an addition focus on research Mauritius will be able to mitigate future public health

challenges whilst developing a healthcare industry.

- Food SecurityMauritius is a net food importer with growing self-sufficiency in beef and complete

self-sufficiency in poultry 70 . In addition, as a SIDS, Mauritius is concerned with

mitigating economic and geographic challenges, specifically in its vulnerable agro-

industry sectors and isolation from large markets that enjoy economies of scale; and its

small geographic terrain which is not suitable for certain crops71. In this regard, I signed

onto a Food Security Treaty72, which was drafted by Fiji. The vital clause in this treaty,

which overcomes Mauritius challenge of being isolated from international economies,

is that signatories to the treaty agree to:

make their land and infrastructure available for the effective transport of agricultural

produce or capital between member parties of this treaty. [Parties] will not charge taxes

on the transport of produce or capital for any produce or capital involved in trade flows

between any member countries of the treaty.

This is vital because it ensures that food imports from signatories to this treaty will be

significantly cheaper. Furthermore, this treaty has had a significant number of countries

signing to it at the Cape Town Round which expands the benefits and its scope.

Mauritius has an interest in ensuring the prerogative of STEs is secured to ensure

sustainable food supplies. Therefore, working together with Fiji and other SIDSs and

69 See (SIDS 2005) op. cit.

70 See the Ministry of Agro Industry and Fisheries (2008) op. cit.71 See the Ministry of Agro Industry and Fisheries (2008) op. cit.72 See the Inside Treaty - Food Securityin the Treaties section of the Annex.


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the developing countries, I was able to secure this interest from being undermined by a

Cypriot motion disbanding all cartels including STEs. This interest was secured by

Fijis amendment of the Cypriot motion by exempting agriculture and agro-food

sectors from the list of actionable measures against cartels outlined by the Cypriot

motion. I seconded the amendment which passed solely because of the SIDSs

diplomatic efforts by informing delegates of the consequences of the Cypriot motion. It

is important to note because this was a very contentious motion with many countries

seeking to protect their interests in natural resources and other sectors where countries

have state and private cartels looking after their domestic interests. But it was only the

Fijian motion, which was extensively lobbied for in all the networks including the AU,

SIDS, LDC and DC networks - resulting in the amendment being passed as WTO law

without support from many developed nations; most notably the US and EU73.

Lastly, Mauritius was offered foreign aid, along with all other SIDSs, to support a

Spanish motion adjusting AMS commitments. This motion allows the EU to keep all

amber box trade distorting - subsidies whilst going against Japans; and allows the

EU to maintain blue box non-trade distorting - subsidies. Therefore, this motion is in

Mauritius interest as net food importer from the EU. Moreover, Mauritius was

incentivised with US$ 325 million from Spain and the US to support a motion that was

in its favour.

- ICT and E-CommerceThe most important interest for Mauritius is the diversification of its economy by

focusing on expanding its services sector which accounts for most of its domestic

production. So I pursued a strategy to develop the economy into an information and

business hub and making use of its successful financial services sector to expand the

73 See Cyprus Cartel Motion (Minutes from MC) in the Diplomatic Influence section of the Annex.


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services sector. Therefore, I have been successful at signing an agreement to attracting

FDI from India to develop its computer software development industry and investment

in call-centres and other business process outsourcing-specific factors of input as

mentioned above. In addition, in collaboration with other SIDS, I concluded an

agreement to attract FDI from the US to develop Mauritius ICT infrastructure.

This agreement is a commitment by the US to develop the ICT sector and improve

efficiency and profitability. Therefore, the US has pledged US$ 185 million in foreign aid

for the development of Mauritius ICT infrastructure. In addition to this, the US has

agreed to offer tax concession for investments up to US$100 million in order to attract

FDI into Mauritius ICT industry74. This was achieved through collective bargaining with

other SIDSs to support the US in passing WTO law extending the moratorium on

customs duties in the E-Commerce industry indefinitely. The extension of the

moratorium is also in Mauritius interest since Mauritius has a highly liberalised

economy and a comparative advantage in ICT in relation to other African countries75.

To secure the aid and FDI arrangement above, Mauritius was instrumental in creating

an aid spiral between the EU and the US which had conflicting interest concerning the

extension of the moratorium. Mauritius formed a solidarity group comprised of AU

countries76. Then through diplomatic effort as a result of my correspondence with the

EU and US each party made a financially incentivised offer to lobby support during

negotiations. Since the EU and the US were at opposing ends of the motion on E-

Commerce; Mauritius was able to play the two off using diplomatic effort to increase

the financial incentive through an iterated game between the EU and US.

74 See the The United States of Americas Foreign Direct Investment Agreement with Antigua and Barbuda,Cuba, Fiji, Haiti, Papua New Guinea, Mauritius and Singapore in the Trade Related Agreements section of

the Annex.75 See (Sobhee 2009) op. cit.76 See Bloc-Voting Agreement in the Diplomatic Influence section of the Annex.


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Finally, the EU offered the voting bloc US$200 million each, which was surpassed by the

US with an offer of US$220 million. However, Mauritius was also part of a SIDS voting

bloc which was also collectively bargaining with the US for financial incentive to

support the US. Therefore because the AU voting bloc was comprised of 14 countries

while the SIDS voting bloc was comprised of 6 countries; the USs final offer for the SIDS

was US$ 185 million and an FDI arrangement (n). Thus, I finally chose to sign the SIDS

agreement because it further secured Mauritius interests by improving its ICT

infrastructure so n was greater than 35. This is illustrated in the game theoretic diagram

below; where player one is (AU and Mauritius) and player two is (SIDS and Mauritius).

Game-Theoretic Diagram of Decision to Support the US or the EU

- Legislative Capacity and E-Commerce Transaction SecurityMauritius needs some financial and technical assistance to strengthen the domestic

framework for IPR so that Mauritius can harmonise its domestic legislation and

legislative capacity with the international standards. This is vital for facilitating e-

commerce which is predominantly challenged by global piracy. So Mauritius needs to

ensure that it can offer comprehensive protection of IPR.

Mauritius

EU US

AUSIDS

(200, 0) (0, 0) (220, 0) (0, 185+n)

AU SIDS


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Furthermore, since the e-commerce and IPR are rapidly changing spheres in

international trade, Mauritius has an interest in continued technical assistance from

developed countries so that it can utilise the development advantages from these

sectors to strengthen its economic growth. Therefore, Mauritius has an interest in WTO

legislation requiring financial and technical assistance in order to improve its Internet

security frameworks establishment. Thus, I forwarded a motion through the TRIPS sub-

council, which purposefully vague as mentioned above. The motion simply read:

We agree to establish a fund and a working group to develop the security measures in

LDC's and DC's ICT/E-commerce industries.

However, this motion passed quite late in the bargaining round. Therefore I had to

pursue its interests through other means in case this motion was not considered at the

MC. So before the last MC I met with all the other SIDSs to draft a comprehensive

strategy for the final MC and see which motions we felt indifferent about. Moreover, we

also decided to choose motions that were in our favour and use the asymmetric

information about these motions to lobby for foreign aid incentives to support these

motions. Thus, after the final MC we had sign foreign aid agreements, some for motions

which did not make it to the vote, concluding the round with US$ 3 billion 77.

Assessment of Mauritius Position at the End of Bargaining Round

I ended the bargaining round having achieved most of my strategic goals. I have also

fostered a close working relationship with other SIDSs. The collective bargaining effort

of all SIDSs has been very helpful and effective. Each SIDS has contributed extensively

towards Mauritius goals and I have done likewise to all other SIDSs interests. For

example, Cuba was highly successful at introducing SVEs as an addition category of

special and differential treatment in the WTO discourse; while Antigua and Barbuda has

77 See the various foreign aid agreements in the Non-Trade Related Agreements section in the Annex.


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been extremely useful in information gathering and sharing; while Fiji and Papua New

Guinea have been extremely useful at co-ordinating the SIDSs strength of being

dispersed across various regional groups to create treaties that will integrate SIDSs into

international trade. Thus the successful relationship created amongst the SIDS and

their efficacy has contributed vastly to my pursuit of Mauritius interests.

But this has not been without my personal endeavour. Firstly, the SIDS network was

only possible because I established the network in the early stages of the Cape Town

Round of the WTO negotiations. Secondly, the effective communication and co-

ordination between Mauritius, as an AU member and a SIDSs, and other countries was

integral for lobbying the interests of all SIDSs; and especially useful in creating an AU

voting bloc that was able to secure both foreign aid and pass WTO legislation in its

interests and that of other SIDSs. Moreover, my active role in ensuring that all delegates

of from LDCs and DCs knew about the various consequences of motions being

considered at the MC was very useful in ensuring that the developing world was able to

co-ordinate its voting power and lobby for developing state interests at the WTO. This

is exemplified by my continued information-sharing, which included extensive

economic analysis that was unbiased but lobbied for its interests and that of other DCs

and LDCs, and active participation at the MC78.

For example, a motion by Ireland was brought to the MC. The motion called for

extensive liberalisation in services, which was clearly against the interest of LDCs and

DCs. Because, although liberalisation can lead to more FDI and development for ICT,

banking and other service under modes 3 and 4, there are concerns net foreign

currency losses and balance of payment challenges in addition to a loss in

competitiveness in developing economies due to rising barriers to entry79.

78 See SP5-9-1,8 SP5-9-16, SP5-9-20 and 1015 Agenda in the Diplomatic Influence section of the Annex.79See Recent studies on competitiveness in services and developing countries in (Seyoum 2007)


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Therefore, I was able to inform DCs and LDCs of the detrimental effect of this motion

deterring these countries from being offered foreign aid incentives to pass motions

that were not in their interests at the MC. As a result, Mauritius was regularly the first

country to amend motions at MC into its best form in relation to DCs and LDCs, after

which there would be many further amendments. Thereafter, I would take a chance

using an iterated game theoretic strategy and my lobbying to make information

symmetrical ensuring that the most favourable version was passed. As a result the

original detrimental versions of motions failed regularly. Thus my active role in the

Cape Town Round of the WTO has earned Mauritius a great deal of prestige and

successfully secured the national interests in the context of the WTO.

However, I had the disheartening challenge of a failed negotiation with the Chinese

delegation. I approached China trying to reach an agreement that would attract FDI

into Mauritius to develop computer manufacturing; using an extension of the existing

double-tax treaty as a mechanism to bargain with China for this. But the Chinese

delegation would not settle on an agreement without me offering China first right of

refusal for any such investments in future. This did not make any sense for me since the

arrangement strictly dealt with an environment to foster FDI through tax concessions.

Moreover, since this would violate the most favoured nation principle, it would be

illegal in the WTO. But since the Chinese delegation demanded first right of refusal and

refused to change their proposed workforce requirement from a 50:50 split between

Chinese and Mauritius employees; I was put in a position to deny the agreement.

So China and Mauritius could not settle on an agreement because I was bargaining for

an adjustment of the workforce requirement to an 80:20 split between Mauritian and

Chinese nationals considering the fact that the Chinese decedents make up less than

5% of the population. Moreover, there a current challenges and protests that the


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government is facing regarding the Jinfei project which is seen as unbeneficial to the

local population80. Thus I had to forgo the agreement with China. I then pursued an

agreement to secure these interests with South Korea and Taiwan instead. South Korea

responded which lead to the successful conclusion of an agreement as mentioned

above.

Section Three: Conclusion

Executive Summary and Recommendation

The success of my strategy in the Cape Town Round was mainly because of the

effective and efficient co-ordination with the SIDS group. This smallness of the group

meant that it could overcome the collective action game problem of co-ordination.

Moreover, the convergent interests made co-operation and co-ordination easier

because each member became fully invested as it became more apparent that securing

individual national interests relied on consolidating the groups power. This was very

useful since, even though there were commitment devices outlaid in the SIDS

agreement, enforcement of the agreement was unnecessary. Furthermore, my

leadership and guidance ensured that each SIDS was only aware of the common

interests. Thus, co-operation became imperative to securing each SIDSs national goals;

and each member took on their responsibility resulting in greater cohesion.

Due to limited representation in other sub-councils, the SIDSs worked tirelessly to

ensure that they were privy to important information and events in other sub-councils.

This was essential for gaining full knowledge of the direction that negotiations were

going and commitment to sharing strategies, information and confidentiality further

ameliorated this strength of the group.

80 See Mauritius: China and India invest in island by (Mallinder 2010).


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Documents

Mauritius Trade Report by Siyaduma Biniza.pdf