Bridges Trade BioRes • Volume 6 • Number 1 • 20th January 2006

Hong Kong Ministerial Adopts Declaration, Talks to Continue

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WTO Members meeting for the Sixth Ministerial Conference on 13-18 December in Hong Kong were able to agree on a Ministerial Declaration that, while making some marginal progress, was in line with the low expectations for the Conference. In the Declaration, WTO Members agreed, among other things, to eliminate agricultural export subsidies by 2013 and provide duty- and quota-free market access to 97 percent of products originating from least-developed countries by 2008 (see Bridges Trade BioRes, 9 December 2005). While Members expressed relief and satisfaction that Ministers attending the meeting were able to agree on a Declaration, thereby avoiding the collapse of the meeting and negotiations in general similar to the last Ministerial Conference in Cancun in 2003 (see Bridges Daily, 15 September 2003), sources suggested that the failure to decide upon significant, commercially valuable changes to trade rules would challenge the ability of negotiators to reach agreement on the Doha round by the end of the year as mandated in the Declaration.

Although the EU’s agreement to eliminate agricultural export subsidies by 2013 was widely cited as a key achievement of the meeting by the mainstream press, some Members noted the relatively small commercial significance of these subsidies, and that such subsidies have already been scheduled to be phased out by that time under the EU’s 2003 reform of its agricultural sector. In addition, sceptics noted that the agreement on duty- and quota-free market access for LDC exports could be of limited developmental and commercial value, given that the EU already grants such access and that the US could use the three percent exemption to maintain barriers on the main products of export interest to LDCs, such as textiles. Although Members were able to agree on a few other issues — including to let developing countries choose themselves, using a set of indicators, which agricultural products (”special products”) to designate for stronger protection — they were as expected unable to agree on crucial make-or-break issues in the talks, such as the formula for tariff reduction under non-agricultural market access (NAMA) or reducing domestic support for agriculture.

The Declaration sets an April 2006 deadline for finalising ‘modalities’ in the agriculture and NAMA negotiations, i.e. general parameters to guide the development of specific numbers and formula structures for cutting subsidies and tariffs (see Bridges Weekly, 18 January 2006). Some trade sources have speculated that this deadline may be unrealistic since countries are unlikely to shift their positions fundamentally enough to achieve the needed progress in just four months.

For more analysis, see Bridges Daily, 19 December 2005, http://www.ictsd.org/ministerial/hongkong/wto_daily/19_December/en051219.htm

The Ministerial Declaration is available at http://www.wto.org/english/thewto_e/minist_e/min05_e/final_text_e.htm

ICTSD Reporting.