WTO MEETING
Limited Progress
By SANJAYA DHAKAL
The Sixth Hong Kong Ministerial of the World Trade Organization (WTO) wrapped up on December 18 making limited progress.
The trade deal reached at the eleventh hour has been welcomed by the developing countries as first step towards fair deal. The deal also saved the Hong Kong ministerial from becoming a total failure as was being feared by analysts due to recalcitrant mode of particularly the European Union on the issue of eliminating farm subsidies.
In a move aimed at appeasing developing members of WTO, the EU agreed to eliminate agricultural subsidies by 2013. Earlier, the developing countries as well as the US had asked EU to eliminate them by 2010.
In good news to LDCs like Nepal, the WTO ministerial meeting promised duty and quota free access to most of the goods produced by the LDCs. According to the revised draft WTO text on trade liberalization released at the end of the meeting, developed countries have agreed to provide duty free and quota free market access for at least 97 percent of exports produced by the world’s poorest nations.
Upon his return from Hong Kong, Buddhiman Tamang, Minister for Industry, Commerce and Supplies and leader of Nepalese delegation, told reporters that the meeting was fruitful from the perspective of LDCs. “Nepal along with 32 LDCs have obtained duty free and quota free access to the developed nations. Our demand for simplifications of Rules of Origin, too, have been met,” Tamang said.
Likewise, Rajendra Khetan, vice president of Confederation of Nepalese Industries (CNI), who also attended Hong Kong meeting, said, “The meeting turned out to be between Doha and Cancun. It was not total failure like Cancun but was also not as aggressive as Doha. For Nepal, agreement on export subsidies and duty free access are winning points.”
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The draft text stated that the WTO members “shall provide duty free and quota free market access for at least 97 percent of products originating from LDCs.” Likewise, it added that the reductions on quotas and tariffs will come into effect by 2008 or after the overall agreement is reached on Doha work process – which has to be concluded before the end of 2006 as the congressional trade negotiation authority of the US president George Bush would expire after that period.
Furthermore, the ministers of 149 member states of WTO have set end of April as the date for arriving at a comprehensive package of formulas for cuts to subsidies and tariffs.
However, many non-governmental organizations and anti-poverty campaigners have said the Hong Kong declaration as a betrayal of the interests of the developing world.
The deal was reached amid intense and marathon discussions even as huge demonstrations were held in front of the Exhibition and Convention Center of Hong Kong – the venue of the talks.
The WTO meeting in Hong Kong had discussed issues like services, non-agricultural market access and trade facilitation but agriculture grabbed the limelight because of dispute between the developed and developing countries over the matter of subsidies provided to agriculture by the former. Export subsidies for farm products, domestic support programs and tariffs were the sticking points.
The modest progress registered by Hong Kong Ministerial, however, will keep alive the hopes for the multi-lateral trading regime. Analysts had feared that failure of the meeting could have irreparably damaged the image of the WTO and extinguish excitement over the whole process of global economic integration – paving way for mushrooming of Bilateral and Regional Free Trade Arrangements, which could have further damaged fair trade from the perspective of developing countries and LDCs. Recent experiences indicate that the developed countries could try to impose WTO-plus conditions through such bilateral FTAs and push through stringent conditions on intellectual property, environment standards, investment and so on to the detriment of the long-term interest of poor nations. As such analysts have been urging poor nations to pay serious attention before rushing to sign FTAs with developed countries lured by the carrot of duty free access for their exportable items like garments.
