Hong Kong, 19/12/2005 (Agence Europe) - Under pressure from numerous and sometimes violent protest demonstrations, and after six days of intense negotiations, 450 meetings and almost 2000 consultations with facilitators dispatched by Director General of the WTO, Pascal Lamy, to help protagonists find common ground, the Trade Ministers of the 150 member countries of the WTO finally managed, on Sunday evening, to reach a compromise on a consolidated text, strengthening the framework agreement concluded in Geneva in August 2004 as part of the Doha Round. Apart from the differences between rich and developing countries on certain aspects of the draft Ministerial declaration, cotton and the dispute between a number of Latin American banana-producing countries and the Union for a long time threatened to prevent an agreement being reached, since agreements have to be passed unanimously by WTO members. Proud of the success of the conference two years after the failure in Cancun, Mr Lamy nonetheless recognised that consultation methods were very cumbersome, even though they allowed “a step forward”, however modest. He welcomed the end of talks by saying, “We have put the Doha Round back on track after a period of hibernation”, before adding “we have rebalanced in favour of developing countries”. Hong Kong Trade Minister, John Tsang, who hosted and co-chaired the Conference highlighted two significant breakthroughs: the setting of a date for the removal of export subsidies from rich countries and the adoption of a package of measures to help the least-developed countries, giving them duty-free and quota-free access to rich country markets. “In Geneva in 2004, we went halfway. We have now concluded 60% of the Doha Agenda”, said Mr Lamy. Now that the Doha Round framework has been strengthened, thanks in large part to “the efforts of civil society and the work of NGOs”, modalities and figures now have to be established and provisions on the environment, anti-dumping rules and banning of subsidies which contribute to over-fishing have to be strengthened, he said. Mr Lamy called on the WTO's partners to continue their efforts and to demonstrate the political energy necessary to reach an overall agreement before the end of 2006 on lowering Customs duties whose main driving force was agriculture.
The compromise was built on a second draft text negotiated between Mr Lamy and about thirty Ministers from the main trading powers and the various negotiation groups - the Cairns Group, G10, G20, G33, G90 (including ACP and the least-developed countries) - during the night of Saturday into Sunday. It was in agriculture that most progress was made: the text provides for “parallel removal of all forms of export subsidy and all export measures of equivalent effect by the end of 2013”. The text states that this will be done progressively and in parallel, in a way to be defined in the modalities, so that a substantial part can be overtaken for the end of the first half of the implementation period. Let us remember that if the Doha round is concluded by the end of 2006, the overall agreement will take effect from 1st January 2008. Until the end of April 2006, the parallel movement between Community export subsidies, American export credits and food aid and Australian, Canadian and New Zealand State Trading Farms “will be assured by rules to be defined in the modalities”, Mr Lamy told Press, explaining that it would be necessary to put in place special arrangements for food aid, with a “safe category” component for emergency humanitarian aid and a component on “trade surplus” causing trade distortions.
Under pressure from the very start of the Conference from developing countries, joined in a G20-G33-G90 “agriculture platform” led by the Brazilian Minister, Celso Amorim and Indian Minister, Kamal Nath, the rich countries had to come to agreement and to make concessions. This was especially the case for the European Union which was very reluctant to accept the 2010 date proposed by the United States until a strict timetable for parallel movement had been agreed between export subsidies and Washington's, Ottawa's, Canberra's and Auckland's hidden subsidies. In an attempt to break the deadlock between North and South, two possibilities were bracketed in the first draft text put forward in the night of Friday into Saturday: the 2010 date or a formula mentioning a delay of five years from the implementation of a possible overall agreement concluding the Round. Mr Amorim felt that setting a date should “be proof of the political will of the developed countries to keep their promises to the South, which is always penalised by anti-competitive trade practices”. On Saturday, after consulting European Union Member States whose Council of Ministers met every day and who were kept constantly up to date on how talks
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were progressing, Trade Commissioner, Peter Mandelson, met with his counterparts for a final session in the Greenroom with a “negotiable” date of 2013 up his sleeve, since this corresponded with the end of the Union's next budget programme. The European Negotiator had warned that the 2010 date was the “line in the sand”.
At a meeting on Sunday, the Council unanimously approved the second compromise text deemed to be “acceptable” although the French Trade Minister, Christine Lagarde, indicated that she was not particularly happy.
The second area of progress was the adoption of a package of specific measures to help the least-developed countries. This “development package” was strongly supported by the Union which had already its 2001 Generalised System of Preferences initiative, Australia which implemented a similar initiative in 2003 and the large emerging countries. In the “special and differentiated treatment” appendix, the Ministerial Declaration states that developed countries and developing countries which are able to do so should provide duty free and quota free market access on a lasting basis for all products from all of the least-developed countries by 2008 or no later than the start of implementation, in such a way as to guarantee stability, predictability and security. Under the terms of a compromise from the Zambian Djpak Patel, negotiating on behalf of the 50 least-developed countries, the American Rob Portman and the Japanese Toshihiro Nika, the text stresses that those members which have difficulty in allowing such market access “will offer a duty and quota free market for at least 97% of products originating from the least-developed countries, defined as the tariff level, by 2008 or no later than the start of the implementation period”. The United States and Japan were very unhappy with a blanket cover of products from the most vulnerable countries, with Washington seeking to protect itself from “too competitive” textile imports from Bangladesh and Cambodia (the text does not provide for the exemption of any country) and Tokyo wary of rice, leather and fish imports. The NGO ActionAid says that the 3% outstanding will mean that these two countries will be able to stop some 400 products at their borders. The text states these member states will nonetheless have to take steps to progressively achieve compliance with these obligations by incrementally building on the initial list of covered products.
Substantial progress was also made in cotton, leading the C4 group of African countries (Benin, Burkina Faso, Mali and Chad) not to scupper the agreement on the compromise text. The final text guarantees that rich countries (principally the United States) will, in 2006, remove export subsidies on cotton and gives market access, without Customs duties or quotas, to African cotton by 2008 or earlier, but it does not contain amendments that the C4 group wanted on the gradual removal by 2010 of internal support for cotton which harm African producers most. Throughout the week there were many, sometimes very tense, discussions between the US and C4, said Mr Lamy, but Mr Portman, after talking to his counterparts, had to admit that he was unable to promise a political gesture in a situation where the Congress had the last word. On Saturday, the Mali Minister, Choguel Maïga, unhappy at only obtain a half victory, was nonetheless pleased that Washington had listened. He told Press, “In Cancun, the Americans didn't even want to meet us”. In Hong Kong, the C4 countries enjoyed largely favourable media coverage.
Elsewhere, there was little other progress to report. In agriculture, the problem of market access and Customs duties was held over for discussion later. On manufactured goods (NAMA), the developing countries were successful since the formula on tariff reduction that was adopted is a “Swiss formula” not with only two coefficients as the EU and the US had wanted, but coefficients that will reduce or remove high tariffs, tariff peaks and tariff escalation, especially for those products of export interest to developing countries. The text also states that the special needs and interests of developing countries will be taken into account including through less than full reciprocity in reduction commitments. Elsewhere, the need for balance between agriculture and NAMA is clearly stated: the text says that a “comparably high level of ambition” has to be achieved “in a balanced and proportionate manner consistent with the principle of special and differential treatment”. Developed countries were unsuccessful in seeking improved access for their goods to the markets of the least-developed countries. On services, rich countries had to counter an attempt by G90 group of developing countries, fearful that they would have to open sectors that they wanted to protect, to scale down the draft Ministerial declaration drawn up before the Conference, but didn't achieve the expected progress on improved access for their financial services, telecoms, transport and tourism.
Finally, to prevent Honduras, Panama and Nicaragua from blocking and threatening to scupper the agreement if they were unsuccessful in the dispute with the Union on the tariff regime on bananas, Mr Lamy send a facilitator, the Norwegian Trade Minister, Odd Eriksen, who will monitor the Union's tariff system and the development of the Community banana trade for a year, before deciding whether or not to preserve the new European tariff regime.