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Many Obstacles Temper Expectations at Upcoming WTO Negotiations


Next week's World Trade Organization meeting in Hong Kong was supposed to put the finishing touches on the Doha Development Agenda, a plan to liberalize global commerce and at the same time alleviate poverty in developing countries. However, organizers are limiting their expectations of the meeting because negotiations on several key areas have failed to produce results.

The main political sticking point going into the Hong Kong WTO meeting is the issue of agricultural subsidies.

The divide is between richer nations offering to cut farm subsidies in return for developing nations opening their markets more to industrial products and services. Poorer nations say the subsidy reductions proposed by the European Union are not deep enough. There are complaints that the more generous U.S. offer is also insufficient.

Alan Oxley is a former director of the WTO forerunner, the General Agreement on Tariffs and Trade, and now is chairman of World Growth, a Washington group that promotes free trade. With the positions so far apart, he cautions organizers from pushing all sides to forge a hasty agreement based on what is on the table now.

"The positions simply don't go far enough, neither by the rich countries nor by the poor countries," he said. "Many of them have taken the position that if the rich countries aren't going to liberalize, Why should they? That's like saying if my neighbor is not going to keep the yard clean, why should I bother?"

Another key issue is the establishment of basic rules. Analysts' hopes for a breakthrough in Hong Kong were deflated after negotiators in Geneva recently failed to agree on basic ways of how to go about cutting tariffs, eliminating subsidies, and making exemptions for certain goods. A former deputy head of the World Trade Organization, Andrew Stohler, says the impasse makes it impossible to move forward in earnest.

"You have to know the general rule before you can negotiate exemptions," said Mr. Stohler. "That's where we're really falling behind at this stage. In fact, the modalities that we were hoping to achieve in Hong Kong in 2005, were originally scheduled for agreement in this Doha Round in the Cancun meeting back in December 2003, so you can see we're about two years behind schedule already."

Trade ministers from 149 WTO members will spend next week locked in round-the-clock meetings. WTO spokesman Keith Rockwell sums up the topics they must debate: agriculture, industrial tariffs, services, development issues and trade rules.

However, Mr. Rockwell says, with so much groundwork still unfinished, no one expects the Hong Kong meeting to end with a comprehensive agreement.

"What we hope we can do is push the negotiations further to sharpen the focus, so that when we return to the negotiations next year, in the early part of the year, we can get down to business right away," he added.

Mr. Rockwell says many negotiators see agriculture as the lever can break the logjam.

"The feeling is, if we can get agreement in agriculture, this will act as a catalyst and clear the way for our negotiations in other sectors including trade and environment, trade and rules, trade facilitation, which pertains to clearing away red tape," he said.

Some analysts say that with so many nations defending their interests on so many topics, sharpening the focus will be the biggest challenge at Hong Kong.

Alan Oxley cautions participants against missing the target by concentrating too much on agriculture, which he says is the most prominent political issue but not necessarily the most important in economic terms. He says more attention should be paid to removing tariffs on industrial products and services, which he says are real impediments for growth in developing nations.

"There's more open markets of services in the industrialized world. In developing countries, the markets are really quite closed," noted Mr. Oxley. "So, the really two more important areas to try and achieve growth in the developing world out of these negotiations would be in the industrialized products and in services. But I'm sure your listeners don't hear much about that because the politics all focuses on agriculture."

Organizers of the WTO meeting are hoping to prod members to make progress by stressing an impending deadline. In mid-2007, President Bush's so-called fast-track trade negotiating power expires. Some experts say Congress is unlikely to renew it, which means any WTO deal could become mired in political wrangling among U.S. legislators.

However, other analysts call the deadline artificial since Congress has, with few exceptions, renewed past presidential mandates.

Andrew Stohler hopes members will realize the importance of keeping the process moving.

"I think that there's probably going to be real effort made to try to achieve progress in Hong Kong on these very important questions because those ministers know that if they just let this opportunity pass, it's going to be very hard to keep the momentum going in 2006," he said.

There are some trade experts who fear that if the Hong Kong meeting does not at least re-energize the discussions, that the entire WTO system could be undermined and there will be little hope of achieving the Doha agenda.

The conference begins on December 13 and runs through December 18.

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