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WTO Hong Kong Ministerial Meeting - The breakthrough

By Dr.Tejinder Singh Rawal

The stories of negotiations and protests reveal certain lessons about the meaning of Hong Kong. United States and European Union are so invested in maintaining the current model of corporate globalisation embedded in the WTO that they were willing to do anything to get a declaration signed and prevent a 'failure.'

The WTO has failed to successfully conclude even one round of negotiations since its founding in 1995. It is still in the midst of a round begun in 2001 and named after the city Doha, in Qatar, where it was launched. The 'Doha Round' was to have been completed last year but negotiators acknowledge that they have yet to finish even the general parameters or 'modalities.' The WTO's goal in Hong Kong was to complete the 'modalities' - while the protesters wanted the negotiations to collapse, as they did in Cancun in 2003.

In Hong Kong, a declaration was eventually signed. While WTO proponents have admitted that the declaration does not get them much closer to concluding the round, the declaration does mandate a number of harsh concessions from developing countries that will have serious implications for the their future development. And it keeps WTO negotiations hobbling along, at a time when the entire model of corporate globalisation is experiencing a serious legitimacy crisis.

The following were agreed to in Hong Kong with respect to agriculture:

1. An end-date of 2013 for European export subsidies in agriculture;

2. A Development Package on key issues such as subsidies on cotton, market access for the Least Developed Countries (LDC's) or development aid;

3. The US and European Union give huge subsidies to their agricultural sectors, subsidies which gives their products an unfair advantage in the world market and depress global prices, wreaking havoc on farming communities worldwide. Agricultural exporters like Brazil and Argentina have been battling for a reduction in US and European domestic and export subsidies by 2010, so Brazilian and Argentine soy, citrus, sugar, and beef could be sold in the US and EU markets on a level playing field. This greatest-distorting subsidy of all should have been eliminated many years ago and no price should have been asked for it.

4. The US made what appear to be significant offers on agriculture, and tried to shift the blame onto the Europeans. It seemed like the Ministerial was going to break down over the EU's lack of willingness to reduce its massive export subsidies by a fixed date. But at the last hour, having extracted as much in return for it as he could, the EU Trade Commissioner Peter Mandelson agreed to a target date of 2013 for export subsidies, leaving the issue of much larger domestic subsidies undecided.

5. The G20, the group representing agriculture-exporting developing countries that opposed the US and EU offer in Cancún, took the offer rather than allow another failed Ministerial to be blamed on them. And then they helped pressure other poor countries to go along with the deal.

6. One should not forget that most developing countries are net food importers, and are more concerned about protecting their base of farmers from subsidized foreign imports than gaining access to other countries' markets. These countries have been advocating for a designation called Special Products, which would allow them to place certain restrictions on food items based on food security, livelihoods, and rural development.

7. Another key issue for some of the poorest developing countries is cotton. US cotton subsidies to agro-industrial producers so distort the market that millions of farmers in India, Burkina Faso, Mali, Benin, and Chad lose out on billions of income because of the artificially low prices. They have demanded an end to US domestic subsidies by 2006. They got a vague promise that the US would reduce its subsidies 'over a shorter period of time than generally applicable.' Nothing more than crumbs, on an issue that costs farmers their livelihoods every day.

8. In the draft declaration, developed countries could decide which type of products to protect in this manner, but developing countries were going to have to allow the WTO to decide it for them, with many restrictions. They finally gained the right to 'self-designation' of Special Products at Hong Kong, but this is extremely vague, as only an 'appropriate number' of products, to be determined through future negotiations in Geneva, will be allowed for designation.

This may seem like a complex, insignificant detail. But when farmers from South Korea and other countries are killing themselves to protest the WTO, and farmers represent over half the population in most developing countries, it's no small matter.

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