WTO meet enters last phase with no progress on farm trade talks

HONG KONG – The World Trade Organization (WTO) ministerial conference enters its last phase with a ministerial text by WTO director-general Pascal Lamy offering little semblance of a trade development package that would be acceptable to both rich and poor countries.

The WTO draft ministerial declaration committed all member countries to eliminate all forms of export subsidies by 2010 or five years from commencement of implementation, adopt three-band approach in reducing domestic support, adopt the Swiss formula with coefficients for non-agricultural market access products, and a call for higher level of liberalization in trade services.

The draft, issued by Lamy a result of round-the-clock negotiations, will be presented to heads of delegation of the 149 member countries and is expected to be released today at the end of the 6th ministerial conference.

The ministerial text reaffirmed its rhetoric to set out critical reforms in global agricultural trade which has been the sticky point in the discussions, as developing countries demanded an end to the US‚ and EU’s trade-distorting domestic support and export subsidies.

Lamy, however, admitted that the text fell short of expectations with many issues still unresolved.

"My own sense, when I review this myself is the compelling urgency of seizing the moment and driving the process to a conclusion as rapidly as possible. As I see it, the reality is that we have yet to find that last bridge to agreement that we need to secure modalities," said Lamy in his statement.

The text is expected to be assessed as unsatisfactory to most developing countries, especially the G-33 which batted for designating their sensitive products (SP) and special safeguard mechanism (SSM) to protect domestic agricultural produce from the entry of cheap imported products and from further committing to more tariff reductions

G-33 coordinator and spokesperson Indonesian Trade Minister Mari Elka Pangetsu earlier said developing countries wanted the text to specifically indicate that the SP and SSM will be on stand-alone basis and should not be linked to other aspects of negotiations such as the NAMA (non-agricultural market access) which the EU has been insisting on.

Instead, the developed countries seemed to have gained the upper hand because the text stressed that there should be a balance between agriculture and NAMA.

The text read: "It is important to advance the development objectives of this round though enhanced market access for developing countries in both agriculture and NAMA. To that end, we instruct our negotiators to ensure that the level of ambition is market access for agriculture and NAMA is commensurately high. This ambition is to be achieved in a balanced and proportionate manner consistent with the principle of special and differential treatment."

The ministerial text is also unfavorable for developing countries resisting the opening up of their services sector to foreign competition as the draft adopted the unpopular Annex C of the general agreement on trade and services (GATS) that compels member countries to enter into negotiations with countries requesting to open up or liberalize the services sectors such as telecommunications, utilities, power and energy among others.

Another downside is that there is no statement that is specific on when formulas for cutting tariffs and subsidies on agricultural and industrial trade will be implemented.

The text however, suggested progress on the issue of granting duty- and quota-free access for goods from the world’s poorest countries. The strong lobbying by West African cotton growers yielded positive results with the draft pointing to end cotton export subsidies in 2006.