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Concerns Rising About Preparations for WTO Conference in Hong Kong

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With just three months to go before the World Trade Organization opens its Sixth Ministerial Conference in Hong Kong, business leaders and trade experts are expressing concern that not enough progress is being made to ensure a successful gathering.

WTO negotiators are working hard to prepare a crucial draft statement for the conference.

In an unusual step, six organizations of business executives from around the world recently sent a stern letter to the members of the World Trade Organization.

In blunt language, the letter said the six groups were deeply concerned that the WTO's Doha Development Agenda - a broad statement of goals and principles drafted four years ago - "is on the verge of failure."

The groups are from Australia, Canada, Europe, Japan, Mexico and the United States. They urged WTO nations to work harder to complete the first draft of a Ministerial Declaration, which will form the basis of negotiations in Hong Kong. Without a solid, detailed draft, the groups say, the meeting will not achieve its goal of expanding world trade.

Freya Marsden is the director of policy for the Business Council of Australia, one of the six groups. She says they are committed to advancing the Doha agenda because they believe trade liberalization is the best way to foster economic growth, especially for developing nations. They are concerned, she says, because efforts to draft the Hong Kong declaration are months behind schedule. Ms. Marsden calls the draft key to a successful meeting.

"If we can achieve at least a major road map at the Hong Kong stage, then at least we can push forward and use that as a strong basis," she said. "If we don't get very far at all in HK, then there's a real risk that we'll actually have to reassess how we look at the WTO and how we move forward in the future."

She says that if the Hong Kong talks fail, governments may change their focus, toward bilateral and regional trade agreements and away from the WTO's global effort.

The Doha Development Agenda was drafted in 2001 at the WTO's Fourth Ministerial Conference. It states that WTO members want to ensure that developing nations share in the growth of world trade and that the poorest nations can fully participate in the global trading system.

The agenda sets out crucial trade areas that must be addressed - including agriculture, market access for manufactured goods and trade in services.

The WTO wants to complete all negotiations for the Doha agenda by the end of next year. But to do that, the members need to agree on dozens of intricate regulatory methods - or modalities - for reducing trade barriers.

Keith Rockwell is the WTO's director of information. He says the business groups are correct in saying that not as much progress as hoped has been made on the Hong Kong declaration.

Mr. Rockwell says negotiators at the WTO have been working hard - weighing formulas, studying data and hammering out details. Now, he says, they need direction from political leaders in their home countries to move forward.

"At the end of the day, a decision's going to have to be taken, and that's best done by [government] ministers," he said. "But the point here is you can't leave too much in terms of the negotiating document unfinished by the time we arrive in Hong Kong, or there'll just be too much work for the ministers to do."

Experts say there is a good chance that without a solid draft declaration to guide negotiations, the Hong Kong conference will, if not fail, at least be inconclusive.*

But that does not necessarily mean all is lost. David Hartridge is a former WTO official and a trade consultant in Geneva. He says that even if the conference does not achieve everything that is hoped, it could provide new strategies on meeting the Doha goals. And, he says, there is still time to produce a good draft for Hong Kong.

Compared with some past ministerial conferences, Mr. Hartridge says, Hong Kong has several factors in its favor.

"Nobody wants a failure here. Everybody wants the Doha round to succeed as far as I can tell," he said. " Everybody wants Hong Kong to succeed. The question is how to do it, not whether people want it done."

In addition, he says, WTO members are determined never again to have a conference like Seattle in 1999. Mr. Hartridge says Seattle began with a bad draft declaration, was racked by animosities, and then crumbled as negotiations stalled and the pressure of anti-WTO riots outside made the work difficult.

Finally, Mr. Hartridge says, unlike the last ministerial, in Cancun, WTO members realize they are running out of time to complete the Doha round.

If that is not done by the end of 2006, it could become very difficult to get a final deal approved by the United States - the world's largest economy. In mid-2007, the president's so-called fast-track trade negotiating power expires, and Congress is unlikely to renew it. That means any trade agreements could become mired in political wrangling among U.S. legislators.

The knowledge of that 2007 deadline, Mr. Hartridge says, may well be enough to help the trade ministers in Hong Kong achieve many, if not all, of their goals.

*corrected 16 Sep 05

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