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WTO Ministerials

Hong Kong updates

WTO Hong Kong Ministerial
December 13-18, 2005

Update 3
Services Loom Large, Late Night Negotiations Reap Results

Sabrina Shaw, December 15, 2005

With criticism strengthening over the motivations behind the development of, and focus on a "development package" to provide a deliverable for beleaguered trade ministers in Hong Kong, several developing country delegates queried whether the diversion of the negotiations away from agriculture and non-agricultural market access (NAMA) - the focus to date in Hong Kong - to the development package is designed to tantalize and distract them.

Nevertheless, ministers emerged from a four-hour so-called Green Room meeting late Thursday evening with the first provision of an emerging development package - quota- and duty-free access for least-developed countries (LDCs).

The African, Caribbean and Pacific (ACP) group proposed revised text deletes certain paragraphs in the services annex to the draft ministerial declaration in an attempt to tone down the negotiations and buy time to add policy space for developing countries. While there is an apparent consensus not to reopen the services text in Hong Kong, ACP and LDC groups have agreed a revised text which they presented to the G90 late Thursday. Some delegates are calling the focus on the development package an effort to sweeten the stalled negotiations on agriculture and NAMA. Nothing is more bitter sweet at the moment then the state of the General Agreement on Trades in Services (GATS) negotiations in Hong Kong. Several delegates went as far as to equate the current services impasse with the derailment of the Cancun talks by disagreement on the Singapore issues. The potential for services to derail the prospect of a decent development outcome emerging from Hong Kong may have been on the minds of U.S. and European Union capitals who are reported to have made calls to several LDC capitals to pressure them to withdraw their objections to the services annex in the draft ministerial text. The EU and U.S. argue that LDCs in any event are exempted from the obligations contained in the services annex. While recognizing the importance of the services negotiations in Hong Kong, several ACP countries lamented their lack of capacity to fully identify their interests.

A newly formed services alliance - Indonesia, Philippines, Venezuela and South Africa - submitted a letter to the chair essentially stating that the services annex was not an agreed text and it was thus premature to adopt it in its current form. This alliance is expected to be joined by Cuba, Kenya and ACP countries. While posing as an innocuous procedural concern over the legal basis for the Chair's text on services annexed to the ministerial declaration, the G4 letter on services is motivated by three main substantive concerns: the detail on the quantitative targets, the sectoral objectives, which while a work in progress, concentrate on developed country interests and the mandatory aspect of the plurilateral negotiating process.

Tonga accedes to the WTO
The ministerial conference on Thursday afternoon approved the Kingdom of Tonga's terms of accession following a lengthy process that began in 1996. Tonga becomes the 150th member of the WTO, on the heals of the Kingdom of Saudi Arabia acceding on 11 December. In a statement to the plenary, Tonga's Minister for Labour, Commerce and Industries referred to the long journey of accession involved in the accession process.

Tonga joins the South Pacific islands of Fiji, Papua New Guinea and Solomon Islands to hold WTO membership. After having completed a ten-year process, Vanuatu decided to put its accession on hold shortly before the Doha ministerial for "technical reasons." Referring to the statements of some NGOs, Tonga emphasized that it was "simply not an option" to not be a WTO member based on a consideration of the pros and cons of membership. Oxfam had issued a controversial statement on the tortuous process of WTO accession for small island states in the South Pacific stating that its accession would impoverish the nation.

Fiji, the ACP coordinator for rules, put forward a proposal on Thursday night to revise the fisheries text of the draft ministerial declaration, in which, according to one source, recognized the importance of fisheries access agreement payments to ACP countries, which have been considered for red box prohibited subsidies in the negotiations. The status of artisanal fisheries is also of concern to the ACP.

India released a statement outlining its opposition to the "list" approach to tariff reduction negotiations on environmental goods as not in the interests of developing countries and allows non-agricultural market access in through the backdoor. In the negotiations in the Special Session of the Committee on Trade and Environment, India has submitted an alternate "environmental project" approach, whereby tariffs would be reduced for goods and services associated with a particular project for a specific time period as approved by a designated national authority. Negotiations are expected to pick up on the environmental aspects of the draft ministerial declaration.

Aid for Trade
At the Hong Kong Trade and Development Symposium convened by International Centre on Trade and Sustainable Development (ICTSD) and Hong Kong University in collaboration with 80 other institutions, as well as other meetings around town, Aid for Trade featured high on the agenda. Some senior-level participants questioned whether recent initiatives on Aid for Trade actually would involve new and additional resources. Mia Horn af Rantzien, Swedish Ambassador to the WTO and facilitator of the so-called Geneva process on the Integrated Framework (IF), has been the force behind getting a task force established through the Ministerial Declaration to look into enhancement and expansion of the facility. African ministers have reiterated that Aid for Trade involves development strategies supported by instruments that go beyond trade and insisted on the importance of policy coherence with other multilateral agencies. Notwithstanding the draft language in the ministerial declaration, some members, including the U.S., are quick to point out that Aid for Trade has not yet been explicitly requested by the WTO membership outside the context of the IF. There is an emerging consensus that Aid for Trade should be a complement to, and not a substitute for, a broader development agenda. While the concept is fast becoming common currency in and outside the conference centre, the role of Aid for Trade in the Doha round await confirmation.

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