Trade: Sixth WTO ministerial in Hong Kong

In mid-December, the 150-member World Trade Organization (WTO) met for its sixth ministerial meeting in Hong Kong. The meeting’s main purpose was to continue the ongoing round of negotiations known as the Doha Development Agenda (DDA) (launched by the ministers at the WTO’s fourth ministerial conference in Doha, Qatar in November 2001) after its near-derailment at the last ministerial meeting in Cancun, Mexico in 2003. The goal of the DDA is to reduce barriers to trade in agricultural products, non-agricultural products and services along with formulating rules and trade facilitation regulations. The following article is written by Maryknoll Fr. John Casey, who lives and works in Hong Kong.

What was meant to be a smooth development during the ministerial meeting turned out to be anything but. At issue in general was the distinction between “free” and “fair” trade with the basic issue the trade inequities between rich and poor countries. The “fair” trade issue is what brought most non-governmental organizations (NGOs) into the equation, some championing the rights of the “little people” with others championing various business ventures.

As the meeting began, everyone was aware that the dominant area to be addressed was agricultural trade. For maximum clout, ministers divided themselves into a number of different negotiating groups, some overlapping. For instance, the African Union Group was headed by the Egyptian Trade Minister Rachid Mohamed Rachid, as was the G-20 group of developing countries. Rachid was quoted as saying that the two groups, while almost identical, had some minor differences.

Even before the meeting’s first day, it was understood that a negotiations obstacle was the farm subsidies paid by the U.S. and the EU to its farmers which undercut prices of farm products worldwide. Particularly hurting were nine African nations, among the poorest in the world, which have cotton as their principal export product. On Dec. 12 and 13, both the EU and the U.S. tried to diffuse the situation somewhat by offering large packages of trade-related monetary assistance. But the desire of the poorer countries was to lower import tariffs on their agricultural products and the export subsidies in the EU and U.S. But the richer countries wanted poorer countries to cede in other areas such as services and industrial tariffs. By this time, it looked as if the conference was doomed to failure and some, including the U.S. Trade Representative Rob Portman, began looking beyond this meeting and calling for another meeting early next year.

On Dec. 15, the U.S. offered duty-free and quotafree access to the C-4 cotton producers, Benin, Burkina, Faso, Chad and Mali. Oxfam called this offer “disingenuous” since African countries do not export a single gram of cotton to the U.S. and have not done so in years. Meanwhile, China, which was keeping a low profile during these discussions, was stung by the U.S.’s comment that China was not living up to its WTO commitments. In response, their commerce minister claimed that China was the biggest victim of unfair anti-dumping practices and the rest of the world should treat it as a developing country with a genuine market economy.

On Dec. 16, 110 countries put aside their enormous differences in an exceptional show of unity to put pressure on the wealthy nations which they accused of dominating the agenda and marginalizing their legitimate concern. On the same day, Argentina, Brazil, Egypt, India, Indonesia, Pakistan, the Philippines, South Africa, Tunisia, Namibia and Venezuela — all of whom were concerned about the lack of debate on non-agricultural market access — began a new grouping of countries called the NAMA 11.

After an all-night session, at dawn on Dec. 17 a draft text was produced. Unfortunately it failed to address key demands such as a time line for eliminating government subsidies on agricultural exports. But late in the day this gloom was overshadowed by pandemonium which broke out within the convention center when it was sealed off by police reacting to a group of protestors led by Korean rice farmers who had charged within yards of the Convention Centre. Scuffles with the police blocked off all key access routes.

On Dec. 18, the last day of the meeting, a compromise was reached when trade ministers agreed to the elimination of farm export subsidies by 2013, a date backed by the EU, although Brazil and the U.S. lobbied for 2010. Least developed nations got support by dutyfree and quota-free access to wealthier markets by 2008, but many countries will continue to protect “sensitive” industries. In a concession to the C-4 African nations, the U.S. committed to ending export subsidies for cotton by 2006. However, it can continue subsidizing the production of cotton which will continue to distort market prices.

For more information, check the website of the Interfaith Working Group on Trade and Investment, www.tradejusticeusa.org.