Hong Kong: Expectations and Realities
Published: The Kathmandu Post, 9 December 2005
By: Navin Dahal

The 148 members of the World Trade Organisation (WTO) are meeting in Hong Kong during 13-18 December 2005, in a bid to bridge the gap between them to complete Doha Round negotiations by the end of 2006. However, the Draft Ministerial Text issued on 26 November (second version issued on 2 December without much change) indicates that the Hong Kong Ministerial will fall far short of expectations.

The agenda for the present round of WTO negotiations, also known as the Doha Round, was set by the Ministerial declaration in Doha in 2001. This declaration was a major effort by WTO members to address the interest of the developing members and is also know as the 'Doha Development Agenda'. This spirit, however, could not be sustained for long and the fifth Ministerial in Cancun concluded without the adoption of a declaration. The failure of Cancun put a question mark on the Doha Round. This also led to apprehensions that the developed members of the WTO were not serious to accommodate the interest of the developing and least developed country (LDC) members. Members were able to bring back hope of completing the Doha Round on time when they managed to agree in the July Package (JP) after hectic negotiations in Geneva on the aftermath of Cancun. The JP focuses on five issues namely, agriculture, non agricultural market access (NAMA), services, trade facilitation and development dimension.

Divergent views exist among Members on these issues. In particular, there are sharp differences between the developing countries led by G-20 and G-33, and the developed countries, mainly the European Union (EU) and the United States (US). The bone of contention is the reluctance of the developed countries to open their agricultural markets for the developing countries. The haggling on the specifics of the formula for reduction in domestic support and market access is an attempt of the developed countries to continue to protect their markets and distort agricultural trade. The disagreement on the coverage of products that will be allowed to be considered "sensitive products" and exempted from tariff reduction commitments is also a reflection of their protectionist intent. While the interest of the developed countries in agriculture is to protect their markets, their main interest in non-agricultural market access (NAMA) is to open the developing country markets for their industrial products. The very fact that the Draft Ministerial Text talks about tariff reduction under Swiss formula in the case of industrial products and a linear formula in the case of agricultural products exposes the "intention" of the developed countries. The debate on the "less than full reciprocity for the developing countries" also reflects the same. Annex B of the Draft Text indicates that Members are far away from achieving full modalities.

Services is another area where progress has been tardy. It is unlikely that the Hong Kong Ministerial will be able to finalise the date for submission of final draft schedules and an end date for negotiations.

Negotiations on trade facilitation (TF) seem to be the least controversial of the five issues being negotiated under JP. The assurance of technical assistance to the least developed countries (LDCs) for implementing TF measures makes it the least resistant area for the LDCs too.

Special and differential treatment (S&DT) provisions are yet to move beyond rhetoric. The Draft Text acknowledges that substantial work still remains to be done to make the S&DT provisions "precise, effective and operational". The Text reveals that WTO Members are yet to look into the different proposals, including five from the LDCs that seek to strengthen Agreement specific S&DT provisions. This is ironic given the fact that this round of negotiations is called the "Doha Development Round".

Though it is laudable that Members are considering binding duty-free and quota-free market access for LDC exports, the lack of commitment for strengthening their supply-side constraints and partial coverage of products are likely to dampen the benefits of preferential market access. The failure of the Integrated Framework (IF) to address supply-side constraints has been identified and the Text recommends an enhanced IF. Rhetoric apart, it is difficult to see how the new IF is going to be more effective than the old one. The negotiations leading to the Hong Kong Ministerial are worrying for the developing countries as they indicate that the Ministerial is unlikely to help the Doha Round to become truly "developmental". If the Ministerial fails, Members will have a difficult task ahead to complete the Doha Round by December 2006.