WTO negotiators reach limited deal

Posted in Other | 19-Dec-05 | Author: Keith Bradsher| Source: International Herald Tribune

Director-General of World Trade Organisation (WTO) Pascal Lamy attends the closing ceremony of the Sixth World Trade Organization Ministerial Conference in Hong Kong December 18, 2005.
HONG KONG Trade ministers representing most of the world's governments reached a deal here Sunday night resolving a series of narrow but troublesome issues that have blocked a global trade agreement for more than two years.

The accord sets a deadline for the global elimination of agricultural export subsidies, realizing a goal that U.S. negotiators have been pursuing for two decades. The agreement, to be known as the Hong Kong Declaration, also requires industrialized countries to eliminate almost all tariffs and quotas on exports from the poorest countries, a goal of the United Nations for many years.

Other provisions include a broad agreement to ban fishing industry subsidies that lead to overfishing; special help for impoverished cotton-growing countries in Africa; and a plan for the United States, the European Union and Japan to provide several billion dollars a year in aid to developing countries to help them compete in global trade.

The Hong Kong Declaration gives a fresh impetus for negotiators to try to finish a comprehensive set of global free trade rules by the end of next year, in time for President George W. Bush to submit it to the U.S. Congress before the expiration of a special negotiating authority he holds that limits legislators from amending agreements.

"I now believe it is possible, which I did not a month ago," said Pascal Lamy, director general of the World Trade Organization. But no date or location was immediately set for the next ministerial conference.

All of the 149 member countries and customs territories of the World Trade Organization approved the declaration. The leaders of the Cuban and Venezuelan delegations stood up in the last five minutes of the six-day conference to reserve the right to exempt their countries later from possible new rules concerning service industries like banking, insurance and telecommunications.

But the Hong Kong Declaration does not settle some of the biggest issues facing the WTO's members. Some of these issues, including lower tariffs on agricultural and manufactured goods and limits on domestic farm subsidies, were barely discussed here because the sides are so far apart.

Senator Charles Grassley, Republican of Iowa and chairman of the U.S. Senate Finance Committee, said more negotiations were needed.

"On the toughest issues, it just kicks the can down the road," he said.

As with many trade agreements at the ministerial level, the accord also papers over differences that could prove troublesome later. An agreement reluctantly accepted by the European Union to end agricultural export subsidies by 2013, for instance, calls for a "substantial" part of these subsidies to be eliminated well before then, but does not specify what this would mean.

Similarly, the ban on fishing subsidies does not define overfishing. And the agreement on cotton leaves for later the question of how quickly Washington should lower its subsidies, which West African countries blame for depressing the prices their cotton farmers receive.

Lamy said the agreement left negotiators 60 percent of the way toward finishing the Doha Development Round of negotiations, which began four years ago in Doha, Qatar.

Peter Mandelson, the European Union's trade commissioner, acknowledged that the Hong Kong Declaration was far from comprehensive. But, he said, "if we didn't make the conference a success, we certainly saved it from failure."

Susan Schwab, a deputy U.S. trade representative, was more optimistic. "The progress made today really lays the groundwork for a major negotiation going forward," she said.

India's minister of commerce and industry, Kamal Nath, especially welcomed a decision by rich countries to eliminate quotas and tariffs by 2008 in 97 percent of their import categories for goods from the world's 50 poorest countries. The United States does not now impose tariffs or quotas in 83 percent of its import categories, and Japan does not impose them in 87 percent.

The European Union already exempts almost all imports from tariffs and quotas if they come from the poorest countries. It restricts these imports instead with stringent rules that each poor country must produce much of the value of the product itself, instead of importing sophisticated components from wealthier countries for final assembly.

Developing countries had criticized the outcomes of previous ministerial meetings, which are held every two years, as too often dictated by rich countries. "For the first time," Nath said in an interview, "it doesn't appear like a script written by developed countries."

The conclusion of a deal late Sunday marked a sharp turnaround from the gloom on Saturday afternoon, when negotiators were deadlocked over several issues while about 1,000 protesters were fighting the police outside. The violence left 116 people injured, including 56 officers, although no one suffered critical injuries, the police said.

The turning point in the talks came on Saturday night when Mandelson and Mariann Fischer Boel, the EU's agriculture commissioner, introduced a proposal calling for a worldwide ban on agriculture export subsidies by 2013. Industrial countries agreed in July 2004 that agricultural subsidies should end, but had been unable until Sunday to set a date.

Until Saturday evening, European negotiators had insisted that they would not accept any deadline for an end to subsidies because they wanted a broader definition of export subsidies that would include food aid to poor countries. Many countries, notably Brazil and the United States, had discussed a 2010 deadline and expressed concerns that a ban on food aid might interrupt shipments to places like the Darfur region of Sudan.

The successful offer came on Saturday after European leaders agreed in Brussels on a budget extending existing farm subsidies through 2013. But Mandelson insisted that he and Fischer Boel had introduced their own proposal Saturday evening and had not simply passed on instructions from Brussels.

The plan calls for industrialized countries to phase out export subsidies by similar percentages each year, although this would mean bigger cuts for the EU in euros because its subsidies are greater. "We will continue to demand that others move with us, every step, every cut," Mandelson said in an interview.

Chirac praises trade accord

The compromise reached at the WTO ministerial meeting will bolster French and global economic growth while protecting "European interests," President Jacques Chirac said Sunday, Agence France-Presse reported from Paris. Chirac said the agreement "will contribute to the development of the poorest countries but also preserve the vital potential of European agriculture."