The Hindu Business Line : WTO: Hong Kong meet's fate sealed?

Those working against the interests of the World Trade Organisation will do everything to scuttle the Hong Kong conference, because this would mean hitting at the Doha Round, which in turn would be tantamount to staging an assault on the long-term relevance of the WTO itself.

WITH just about three weeks left for the Hong Kong ministerial meeting of the World Trade Organisation, and considering the problems being faced by WTO members to arrive at a settled agenda for the conference, it is now safe to say that the original goal of the ministerial will not be achieved. In other words, the "full modalities" that were expected to be worked out after the "July approximations" will not materialise at the conference, the implication being that the job will have to be accomplished in 2006 if the Doha Round of multilateral trade liberalisation is to be completed by the end of next year. The outlook for this schedule to be implemented successfully is bleak because of the volume of work that remains to be done in the various sectors of the negotiations and the huge gaps that still exist among the standpoints of the different WTO member-States.

So what happens to the Hong Kong conference? Should it be allowed to pass without a declaration — which, symbolically, would not be in the best interests of the Doha Round — or should there be a scaled-down approach, which would in effect mean a diluted "full-modalities" document? Common-sense would suggest that the Hong Kong meeting should not be allowed to pass without some sort of formal document being issued at its conclusion which, among other things, would indicate that the Doha Round process was still alive and kicking.

Against this background, the Commerce Minister, Mr Kamal Nath's view that deadlines per se should not be given much importance which could result in the entire Round being scuppered is important. Of course, the timing of the Hong Kong conference should not be tampered with (that is, shifted from the middle of December) which, for all practical purposes, means that the temporal deadline is fixed and unalterable. If this is so, attention will have to be devoted instead to revising the contents of the deadline. This is what `recalibration' of the ambition-level for the Hong Kong conference means, which has been explicitly suggested by the Minister. As the WTO Director-General, Mr Pascal Lamy, has himself said, the main issue now is whether to `recalibrate' the expectations for Hong Kong — to what can reasonably be achieved — or whether we are ready to run the risk of making Hong-Kong an `announced failure', adding: "Obviously, there is a risk that by recalibrating Hong Kong we take pressure off the negotiations and start losing precious time. But the deadline of end of 2006 remains. The question is not to stop walking, but to advance step-by-step towards Hong Kong. We need to recreate a `negotiating spirit' among members, which has been absent these last days. And, as I have already said, I do not think `take it or leave it attitudes' will help us make progress in the negotiations."

The problem is: What are the chances of a new `blueprint' being devised solely for approval at the Hong Kong conference, the original one being tackled (in the words of the Swiss Economy Minister, Mr Joseph Deiss) "in the first months of next year"?

In fact, the idea of another ministerial conference immediately following Hong Kong has even been hinted at by the Brazilian Foreign Minister, Mr Celso Amorim, on the assumption that "it is possible that what the EU cannot do in December it can do in March." To some, this may be a hope difficult to implement because, as it now appears, Brussels probably has been driven to the wall as far as its negotiating stand on domestic farm subsidies is concerned, the inference being that what it cannot concede today it cannot also concede tomorrow.

Indeed, especially at this late stage, the EU has openly said that it has made its best offer and, what is more important, it has also charged Brazil and other major developing countries with (as reported) "not making serious offers to open their services and industrial goods markets".

While all this is in the future, the problem today is to devise a "blueprint" for Hong Kong acceptable to all because, in its absence, the future of the Doha Round itself could be at stake. What are the options open to players in this direction? Not many, if the views of Mr Lamy are any indication. As he told heads of a delegation meeting in Geneva earlier this month, "there is not a sufficient level of convergence among members on the level of ambition in the key areas of the negotiations, which would allow the Chairs to draft `full modalities', meaning by that a text with numbers or parameters on all elements of the July 2004 framework".

It is clear from what the WTO chief said at the meeting that, instead of jumping to Hong Kong straight from the July 2004 framework, he is for an "intermediary stage" before the full-modalities stage can be reached in the negotiations because "if we try this jump and we miss it, we might lose what has already been achieved — and this is not at all desirable".

When Mr Lamy chooses to hold such a position, it should be clear to all and sundry that the problems in the way of drawing up even a reduced-ambition blueprint for Hong Kong will be difficult, if not impossible, to surmount. To quote him: "Let me give you a few examples of differences that make it difficult to arrive at full modalities at this time. Some have said they are not in a position, at this stage, to move further on agricultural market access unless there is more on the table on NAMA, services or GIs. Others have said they are only able to keep their offer on reduction of domestic subsidies if there is an improved offer on market access in agriculture on the table.

"Yet others say they can only agree to table a proposal of cuts of its industrial tariffs (NAMA) which would bite in applied rates if there is an improvement in, and to the extent of, a new offer on agricultural market access. And we also hear from other sides that they will only discuss NAMA if there is a sufficient degree of precision on special products and the special safeguard mechanism."

It is against this rather dismal background that New Delhi's focus on the `development' aspect of the Doha Development Agenda will have to be seen, the effort clearly being to open up the canvas for the Hong Kong ministerial to broader issues such as the special and differential treatment of the interests of developing economies.

As the Commerce Minister tellingly put it earlier this month, the trade negotiations launched at Doha in 2001 were labelled the Doha Development Round and not the Doha Market-Access Round. He is also reported to have said that tariff-reduction was not the only pre-condition for market access. "For real market access to accrue, it is also necessary that export subsidies, domestic support and no-tariff barriers are eliminated," he added.

Last Friday, the Commerce Secretary made it public that India would not agree to increase market-access for exports from the developed world in return for a cut in farm subsidies, thus telling the world in effect that this is the line which Brussels has continued to plug in its bargaining with other WTO members in the run-up to Hong Kong.

One wonders where the US stands in all this, although it has gone out of its way to proclaim to the world that it is the intransigence of Brussels on the domestic farm support issue that is essentially holding up progress in the negotiations to get an acceptable Hong Kong declaration. However, what is certain is that those who are surreptitiously but steadily working against the interests of the WTO will do everything in their power to scuttle the Hong Kong conference, because harming Hong Kong would mean hitting at the Doha Round, which in turn would tantamount to staging an assault on the long-term relevance of the WTO itself.

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