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Putting trade negotiations back on track

Chamber Assistant Director for Business Policy, Dr WK Chan, reports from the Qatari capital Doha where the World Trade Organisation's fourth Ministerial Conference was held

"Historic" was the most oft-uttered word during the Fourth Ministerial Conference of the World Trade Organisation, held on November 9-14. Indeed, what happened in the Qatari capital of Doha was nothing less than history in the making.

Ministers in conference

All speakers, in their opening addresses, alluded to the importance of developing country consideration in launching a new round. Mike Moore's speech set the mood for the difficult negotiations ahead: "We all know that nothing has been agreed at this stage, and that the documents sent to ministers for their consideration are merely drafts. Deep differences remain. But they are clear and businesslike drafts, providing a good basis for work and for the decisions which you will be called upon to take at the end of the conference."

The ministerial speech making began on November 10. USTR Bob Zoellick talked about a growth agenda as a solution to the global slowdown. He also called for a separate declaration on access to medicines, one of the most difficult subjects of negotiations. Canadian Minister Pierre Pettigrew thought it "unfortunate that members have not been able to agree on the need to ensure the WTO works with the International Labour Organisation to advance core labour standards."

Japan alluded to "necessary clarification and improvement of rules on anti-dumping," and lent its support to starting negotiations on investment and competition, as well as "further discussion" on trade and environment. E.U.'s Pascal Lamy called for flexibility on the part of all participants in order to make Doha a success, warning that "it is a dangerous game to push others always to be first to show flexibility." Some delegations, he said, "play on everybody else's risk aversion to try to force others to adjust their positions."

Hong Kong's Chau Tak-hay mentioned China's accession as a huge step forward for the multilateral trading system, but pointed out that "Hong Kong will continue to be a separate member of the WTO using the name "Hong Kong, China." Under the "One Country Two Systems" principle, we will continue to be a separate economic entity and a separate customs territory."

Hard ball negotiations

If the task was daunting, at least the problem was manageable. A nine-page draft had already been prepared (named "Harbinson text" after its author) and it contained seven disputed clauses for negotiation. In Seattle the draft was 34 pages and had 402 brackets.

The debate, and the clincher

Agriculture and medicine were the two issues that were uppermost in negotiators' minds when they gathered in Doha. Developing countries wanted greater access to both. The European Union's export subsidies regime was considered the biggest obstacle to agreement on agriculture, while the TRIPs agreement (Trade Related Aspects of Intellectual Property Rights) presented problems on trade in medicine and healthcare. In the latter case, the main bone of contention was between the U.S. and Switzerland on the one hand, who wanted patent protection for medical products, and developing countries led by Brazil who looked for greater freedom by national governments to safeguard public health. The E.U.'s strong positions on starting negotiations on environment and labour standards also made negotiations more complicated.

On agriculture, the E.U. refused to accommodate any text that alluded to removal of export subsidies, but found itself isolated after Japan indicated support for the text on November 12. Eventually, a solution was found by inserting the caveat which read – 'without prejudicing the outcome of the negotiations' –while keeping the wording for phasing out of export subsidies.

But even that compromised text came with a last-minute surprise from India, who insisted that the text on investment and competition policy was not acceptable. The problem was resolved after the chairman, the WTO director general, U.S. and E.U. went to the 'green room' and hammered out a final solution, which consisted of keeping the text but with a separate minute to explain the wording of the paragraphs.

With Minister Kamal's gavel down on the declaration, the making of a new world trade order thus began.