WTO: Day 3 in Hong Kong – Developing Countries Step Up Pressure on EU and U.S.

By December 15, 2005Trade

hongkonglogo_85pxls.gifHere is part four of Frank Vargo’s daily update–from the front lines–in Hong Kong for the Sixth WTO Ministerial Conference:

Nothing is really decided in WTO Ministerial meetings until the last 1-2 days, or even the last few hours, so it’s too soon to predict the outcome at Hong Kong. But as the days pass, time is getting tighter to reach the understandings needed to allow the Doha Round to move ahead in 2006.

Agriculture remained at the center of Thursday’s negotiations, as it has been every day so far. Just about everyone is firing shots at the European Union to do more to open up its agricultural markets. A motion to set a date for ending all agricultural export subsidies, for example, received 147 votes in favor and two against — the EU and Switzerland. But the WTO works by unanimity, so there was no agreement.

The U.S. is coming under criticism too, with developing countries pressing for the U.S. to give completely free access to everything made or grown in the least developed countries, as the EU claims to have done. The U.S. is seeking to do most of that — maybe 98 percent of that — but wants to reserve in some instances, such as some textile products from Bangladesh, which is already a huge textiles exporter to the United States. But a mood emerged on the part of developing countries to press for all or nothing.

The U.S. came under fire as well for not agreeing to eliminate cotton subsidies immediately, and the EU took hits for its banana tariffs. And we were also criticized for not being an open market — which is really pretty silly, considering we are headed for a trade deficit that is bigger than the GDP of all but a handful of the world’s countries. (A recent World Bank report –The Global Monitoring Report–rated the United States as the least trade restrictive of the major economies.)

All this reflects the determination of the developing countries to get a real development agenda out of the Doha Round. Clearly, agriculture is the number one priority for the developing countries, but the whole question of balance and liberalization in a comprehensive fashion — including manufactured goods and services is still unaddressed. The round can’t succeed unless major gains are also made in industrial trade and services.

One of the interesting aspects of the Hong Kong meeting is the presence of about 1000 “non-government organizations” or NGOs who are certified to attend the Ministerial to lobby for their interests. The NAM is one such NGO and is here in Hong Kong pressing for an ambitious tariff-cutting schedule to bring foreign tariffs on our manufactured goods exports down sharply. Other U.S. and foreign business associations are here, as are agricultural and other groups. And it’s good to have these lobbying groups pressing their interests.

A particular group of NGOs has taken on the role of advisors to developing countries. There’s nothing wrong in that, for most developing countries have trade ministries with very few people — and can’t possibly stay up to date on all the proposals and complicated issues in the international negotiations. They need someone they can turn to for information and analysis. Some of these groups are helpful, but some are just against any trade liberalization and are pressing developing countries to keep their trade barriers high and insulate themselves from world commerce. That’s a shame, for if countries follow that advice, they will find themselves unable to move out of poverty.

On the other hand, there are NGO’s here like the Global Business Dialogue (GBD). Managed ably by “Judge” Morris, the GBD is bringing together private sector individuals and government officials from both developed and developing countries to analyze each other’s positions and have open discussions in a calm setting. This process is very valuable, for it lets people with differing views on the Doha negotiations get a little better perspective on how things look through the other guy’s eyes. Promoting this kind of understanding takes time, but the process is really important. The GBD, by the way, is also the organization that held the dinner in honor of Hong Kong’s Anson Chan, which I mentioned in an earlier report.

There’s a lot that can be done to reduce misunderstandings among nations, and groups like the GBD are doing a lot of good — offsetting the harm that some others are doing.

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