HomeBusiness DigestWorld Trade Organisation deal unlikely

World Trade Organisation deal unlikely

Godfrey Marawanyika in Hong Kong

THE Sixth World Trade Organisation (WTO) Ministerial conference opened on Tuesday amid low expectations that a deal will be struck among the 149 members.

The members were this week trying to come up with a deal to cut tariffs and other trade barriers which poor countries say prevent them from gaining access into first world markets and gives developed economies an unfair advantage.

Prospects of a deal have been bleak since last October after the initial preparatory meetings failed to reach a consensus in the contentious areas of agriculture subsidies and tariff reductions.

Over the past six years, developing countries have walked away from the talks, arguing that they were getting a raw deal from rich countries.

Apart from agriculture, other contentious issues discussed in the aborted talks included industrial goods and services in industries such as banking and insurance.

Pascal Lamy, the WTO director-general, said although WTO had sought this meeting as a means of moving two thirds of the way to a final accord, he concedes this might not be achievable.

“While we may not achieve that at this conference, we will use this occasion to build a platform for negotiations next year,” Lamy said.

“We have very little time and a great deal of work to accomplish. Early next year we need to complete the template agreement, known modalities for trade in agriculture and industrial products.”

He said there was need to speed up negotiations so “that we can conclude the round with a critical mass of high quality offers on the table in the more than 100 sectors including tourism, telecommunications, financial services and express delivery.”

Lamy said he was optimistic that developing nations will succeed in gaining concessions on agriculture because they form the majority in the global trade organisation.

“It will result at the end of the negotiation in substantial progress, which developing countries are looking for.

“And you can rely on the fact that, with two-thirds of the members being developing countries, a consensus will not happen without something serious in this direction,” he said.

Zimbabwe was due to be represented at the meeting by a 25-member delegation led by Industry and International Trade minister Obert Mpofu, and his permanent secretary Christian Katsande. Mpofu had however not arrived by late Tuesday.

Egyptian Foreign Trade and Industry minister Mohamed Rachid who is also head of the African Union (AU) said the group had come to the meeting hoping to conclude the discussions by end of this year.

“However, this optimism is mixed with both realism and caution, and willingness to work constructively with developed and the developing world to ensure that this round brings the desired developmental outcomes as promised in the Doha round,” Rachid said.

“Agriculture is certainly an important negotiating track for African countries, especially on the cotton issue. On non-agricultural market access, the group view is that that the final outcome should balance between liberalisation and flexibilities. Also, issues related to the treatment of least developed countries and tackling the issue of the erosion of the preferences is high on the agenda.”

To deal with potential protesters and troublemakers – a common feature of the previous meetings – Hong Kong authorities have mobilised a huge security operation with 9 000 police officers. The administration has also sealed off the area where delegates are assembling.

On Tuesday, nine people – two of them police officers – were injured when officers in riot gear used “pepper spray” to keep away Korean protesters from breaking through the cordon surrounding the WTO site talks.

One of those injured is pro-democracy leader and Marxist legislator “Long Hair” Leung Kwok-Hung.

So far, the United States and the European Union have clashed openly, over Washington’s controversial food aid programmes and how to target food aid to the poor countries. Tension between the two has risen largely because of Washington’s policy of purchasing grain and other products from its farmers and giving it away to such developing countries something which Brussels says amounts to a thinly disguised subsidy to US farmers.

After United Nations agencies placed advertisements which stated that restrictions on food donations to the global body, some of which came from the US, would leave poorer countries hungrier, Brussels top negotiator Peter Mandelson, immediately shot back saying the placement of adverts was shocking

“This doesn’t mean I will be tabling a new agricultural offer,” Mandelson said. “I don’t believe that this is what the round needs now from Europe, even if we had the latitude to do so.”

US trade representative Rob Portman made a thinly veiled attack on Brussels saying that the grouping seemed to have an obsession with their programmes. Portman said the success or failure of the meeting is in the hands European Union which pays out billions of dollars each year in farm subsidies.

Washington has offered to cut farm aid by 60% by 2010 if the EU scraps 80% of its subsidies. However, Mandelson and his team have refused to budge.

“The key to development is market access. Agriculture access is the top challenge and we think that we need to make more progress here,” Portman said on Monday.

“The US made a bold agricultural proposal in October that is yet to be matched by others including the European Union,” he said.

Brazil, one of the major players within the WTO, warned there will not be any agreement if the EU is not prepared to be swayed on agriculture subsidies.

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