South Africa must push developing countries to open their markets to agriculture, industrials and services in order to gain from the benefits of the Doha Round, EU commissioner for trade Peter Mandelson said over the weekend, when he called on South Africa to expand its trade relationship with the EU.

He challenged South Africa, as member of the G-90 and regional leader, to give a lead to developing countries by playing its full part in the Doha Round and said that an early post-Hong Kong services offer would help to do this.

South Africa and the EU, which both have strong services sectors and a healthy two-way relationship in cross-border services trade, must boost services negotiations, which had barely moved forward in Hong Kong, Mandelson said.

He said that negotiations in the Doha Round had "been stalled by demands of a 'nonrepresentative minority' who call for swinging cuts to agricultural tariffs regardless of the consequences for net food importers and those dependent on tariff preferences".

However, Mandelson indicated that the EU refused to move further, until “others match our already-solid offer with cuts of their own in industrial goods and services”.

He reported that the EU’s cut would already put serious pressure on farmers in the African, Carribean and Pacific countries using tariff preferences.

He also suggested that South Africa could become the link between the classic rich-poor, north-south trade in the development round.

Real gains for development in the Doha Round will come from south-south trade, which contributes up to 40% of developing countries’ exports, but Mandelson added that barriers are high and that 70% of duties paid by developing countries are paid to other developing countries.

“South Africa has huge potential market share in large emerging countries like Brazil. Your neighbouring countries in Sub-Saharan Africa can profit handsomely from selling more to you, and vice versa,” he said.

Mandelson therefore urged that more direct investment from South African companies into the EU’s services sector should take place, as many EU companies are already present in South Africa.

However, he said that further investment by EU services companies in infrastructure and business services would help build domestic capacity and export potential, which lowers industry and agricultural cost and promotes development.