Farm deal saves world trade talks

Ministers expressed relief on Sunday that they had averted a repeat of failed World Trade Organisation (WTO) conferences in Seattle in 1999 and in Cancun in 2003.

But they described the Hong Kong pact as disappointing and said it would be tough to wrap up the four-year-old talks by the end of 2006, after which George Bush, the US president, may lose his congressional authority to negotiate trade deals.

In an apparent reference to the EU’s refusal to open its long-protected agricultural markets any further, Rob Portman, the US trade representative, said a breakthrough in cutting farm tariffs was badly needed to reach a deal by the end of 2006.

“Without that we won’t be able to see the whole round come together,” Portman said.

Small success

Peter Mandelson, the European Union trade commissioner, said that in a week of disappointments, the Hong Kong pact was no small prize.

“It is not enough to make this meeting a true success, but it is enough to save it from failure,” he said.

Pascal Lamy said the Hong Kong talks were about rethinking the WTO

The agreement was struck after six around-the-clock days of fractious talks between ministers and a series of anti-globalisation protests that erupted into street battles outside their harbour-side convention centre.

Pascal Lamy, WTO director-general, told the weary ministers they had injected new impetus into the Doha round, a so-far hapless drive to boost global economic growth and lift millions out of poverty by bringing down barriers to trade.

“What you all take back from Hong Kong is a new political energy, a potent fuel to reach cruising speed during 2006,” he said. “Seattle was about shrinking the WTO. Cancun was about sinking the WTO. Hong Kong was about rethinking the WTO.”

Compromises

The agreement, a series of compromises, fell well short of more ambitious plans the WTO originally had for Hong Kong.

It proposed 30 April 2006 as a deadline for reaching a draft for the Doha round, a milestone the organisation had originally hoped to reach in Hong Kong.

Protesters feel the WTO does too little for poorer nations

But Lamy said the modest package of market-opening steps agreed on Sunday meant negotiators had at least taken the round from 55% of the way to completion to 60%.

Big-hitters among developing nations, led by Brazil and India, gave their nod to the draft but voiced frustration over the EU’s refusal to agree on 2010 as a cut-off date for export subsidies.

The agreement will bring the elimination of export subsidies for cotton in 2006. Washington proposed quickening the pace at which it dismantles subsidies enjoyed by US cotton producers that African nations say are ruining their economies.

Disadvantaged

The accord fell short of US and European hopes for greater access to poor nations’ markets for manufactured goods.

But developing nations felt they were the ones short-changed.

Madan Murlidhar Dulloo, Mauritian trade minister, said: “There is a general feeling of frustration and dissatisfaction, not to mention discontent.”

“It’s a shame the richest countries in the WTO outside Europe could not go the extra mile for the world’s poorest countries” Peter Mandelson, EU trade commissioner

Non-governmental organisations also branded the Hong Kong talks another victory for protectionist wealthy nations.

“This is a profoundly disappointing text and a betrayal of development promises by rich countries whose interests have prevailed yet again,” relief agency Oxfam said in a statement.

One key element of Sunday’s deal – duty-free and quota-free access for imports from the 49 poorest nations of the world – was watered down because of US and Japanese reluctance to accept unbridled trade in goods such as textiles and rice.

Mandelson said of the compromise: “It’s a shame the richest countries in the WTO outside Europe could not go the extra mile for the world’s poorest countries.”

Under the compromise 3%, or 250-300 tariff lines, would be exempted.

Protests

The sigh of relief inside the conference centre was echoed on the streets of Hong Kong as thousands of demonstrators marched peacefully to protest against the talks.

The mostly good-natured demonstration was in contrast to Saturday’s pitched battles between protesters and riot police, the worst street violence in the city in decades.

Jose Bove, a French farmer and prominent anti-globalisation campaigner, said: “It is a pact that remains in favour of the farm export policies of the rich countries and big emerging countries … and does little for the majority of farmers.”