SUBSCRIBE TO THE BULLETIN TODAY!

How WTO Got Back in Business

A last-minute deal struck on July 31 ended months of speculation about the demise of the WTO and put the Doha Development Agenda back on track, writes DR WK CHAN

September in Geneva sees many WTO negotiators return from one of the most pleasant summer breaks they have had for years. Just a month earlier, they had toiled through five gruelling days of make-or-break negotiations. The result was a deal struck close to midnight on July 31, ending months of speculation about the demise of the world's only credible multilateral trade institution.

The occasion was the meeting of the General Council, WTO's highest authority after the Ministerial Conference.   The challenge was to reach an agreement which should have been achieved 10 months before in Cancun, the last WTO Ministerial Conference. Cancun's failure had dealt a severe blow to the WTO's latest round of multilateral trade negotiations.  Named the "Doha Development Agenda," the round focused on helping developing countries, and for many that means liberalising trade in agriculture.  Throughout the negotiations, however, agriculture remained the main stumbling block to progress.

In July 2004, the stumbling blocks were cleared. What has been agreed upon is not exactly a treaty or trade agreement; it is, in fact, an agreement about what and how to agree later on, based upon a negotiation about what and how to negotiate.  But this is not to belittle the so-named "July package."  The General Council could have failed to agree, and the Doha Round could have been in danger of collapsing. When the Doha Development Agenda is successfully delivered, July 2004 will be remembered as the turning point in the difficult and troubled round of negotiations.

The July package now outlines a work programme for the Doha Round, giving direction on the process and the outcome of the negotiations.  Under the work programme, an elaborate set of formulas has been agreed to liberalise trade in agricultural products.  The agreed negotiating framework includes formulas for reducing import barriers, export subsidies and domestic support. A related breakthrough is on cotton, one of the most contentious issues in Cancun.  The Doha work programme will now enable the benefits of global trade to be reaped by cotton farmers of less developed countries, especially those in West Africa.

The work programme also includes specific negotiating guidelines on customs procedures, tariff reduction in manufactured products, as well as trade facilitation, services, environment and intellectual property protection.  There is an open acknowledgement that the original deadline of January 1, 2005, is no longer realistic, and new target dates have been set for various strands of the Doha Development Agenda.  Of these, the most important date is the next Ministerial Conference in December 2005, which presents an opportunity for substantial progress to be achieved in the negotiations, if not a successful conclusion of the Doha Round itself.

An additional significance of the next ministerial is that it will be held in Hong Kong. It presents the HKSAR with a rare opportunity to host a truly global event of genuine significance.

Indeed, Hong Kong has much to contribute to the WTO, not just as a host, but in the substance of the WTO negotiations.  The small team of Hong Kong negotiators command great respect among their WTO colleagues.  Our private sector has been diligent too, particularly in the services negotiations, with the Chamber's service policy think-tank, the Hong Kong Coalition of Service Industries, playing an active role.

Between March and July, the global Coalition of Service Industries organised a range of lobbying activities, including a major conference in Geneva in March, and a public submission on June 25 to the WTO urging for progress in the services talks.  When the first draft of the Doha Work Programme was presented, the Coalition of Service Industries found that services had not been given the same treatment as agriculture.  Under the draft, the key tasks were listed under the headings of agriculture, cotton, non-agricultural market access (i.e. goods), development, and then "other negotiating bodies," in which services is mentioned together with a range of others.  It was a fine point, but in effect it could make services a "second-class" agenda.  With some drafting by the HKCSI, another joint letter was sent to the WTO Director General requesting that services be given treatment equal to agriculture and goods.  When the final text was agreed, the Coalition of Service Industries were delighted to see that this has been acceded to, as had the Coalition of Service Industries' earlier request that a date must be earmarked for liberalisation commitments to be tabled. In the latter case, May 2005 has now become the new deadline.

As summed up by Bob Vastine, President of the USCSI, "We can all take satisfaction in the effectiveness of our efforts in the lead-up to and during last month" negotiations in Geneva. Services has never had such a strong demonstration of industry support in any prior negotiation.  We can believe our confreres in the secretariat and in member delegations when they tell us that our voice was truly heard and appreciated."

Dr WK Chan is Senior Director of the Chamber's Business Policy Division. He can be reached at wkchan@chamber.org.hk