WTO-SPECIAL: Stalled Talks Get Underway

By Emad Mekay Reprint | | Print |

Emad Mekay

HONG KONG, Dec 12 2005 (IPS) - A high-profile meeting that seeks to knock down global trade barriers for international businesses started here Tuesday, amid tensions between developing and industrialised countries over the lavish support that rich nations give their farmers, while demanding that developing countries further open up their markets to goods and services.

Thousands of participants are in this city for the World Trade Organisation (WTO) talks, called the Doha round, after the Qatari capital where they started in 2001. The Doha round constitutes an ambitious plan that would end the way global trade was done in the 20th century and totally liberalise trade, reduce or remove tariffs on a global level and allow international corporations free play.

Parts of downtown Hong Kong were blocked to regular traffic while businesses closed in around a handful of luxury hotels where trade ministers, businessmen and civil leaders are meeting for the sixth round of the faltering trade talks that will run for six days.

Joining officials, from the 149 countries represented here, are thousands of opponents of the plan who say that it was designed by industrialised countries to serve their own corporations, with little attention to social and environmental costs, both at home and in the developing world.

Outside the security zone, thousands of protesters and activists from environmental groups, labour unions and student and farmers’ organisations say they plan dozens of protest events, including street marches and a major demonstration.

As they flocked to the city, many carried banners denouncing the WTO talks as part of Western hegemony. Even before the talks started, hundreds protested in the streets and complained that the deal would impoverish farmers and workers, and degrade the environment in both rich and developing nations.

Topping the ministers’ agenda is a trade conflict between the United States, Europe and Japan on the one hand and regional heavyweights from developing countries like Brazil, Egypt and India over the scope of the support rich nations give to their farmers, on the other.

The dispute has soured the atmosphere in the runup to the meetings with widespread expectations that the talks will be derailed. Despite intense negotiations, trade diplomats have so far failed to unlock the stalled talks.

The U.S., the world’s largest economy, and the one likely to gain the most from open markets, says it offered a comprehensive deal to cut its subsidies and tariffs to revive the talks. Washington, however, has accused Europe of blocking the talks by not reciprocating with high enough cuts.

Unlike the 90 percent cuts Washington says it’s ready to take, Europe says it can only slash its support by around 45 percent, still allowing only a limited access to the U.S. and other countries to its markets. The Europeans say their decision to chop support is governed by internal laws and agreements of the European Union (EU).

Rich nations are likely to dole out a package of incentives for the least developed countries as a way to save face in case the talks collapse.

The package could include duty and quota free access for the poorest countries, especially cotton exporters in West Africa, and more aid and training for trade.

Some activists have called the ‘development package’, as it is now touted by trade diplomats from the U.S. and Europe, a decoy to break the near consensus among poor nations that emerged in the last round of talks in Cancun, Mexico, in 2003, against giving in to pressure from rich nations.

Amid strong civil society protests, dozens of developing nations walked out in Cancun, bringing the talks to a halt after rich nations refused to consider cutting down hefty subsidies to their farmers.

“Action on issues of importance to developing countries, like cotton, aid for trade and duty and quota free access would be welcome, but it must be part of a bigger deal that addresses the significant harm caused by rich countries’ agricultural policies,” said Phil Bloomer, a trade expert with the advocacy and relief organisation Oxfam International. “It must not be a ‘sweetener’ to disguise the bitter taste of a bad deal overall.”

Developing countries, like Brazil and India, complain that subsidies undercut poor farmers by pushing prices to ever-lower levels. They also want rich nations to change their anti-dumping laws which, they say, raise tariffs and other obstacles to their exports, like citrus fruits and steel.

Another contentious issue here in the WTO agricultural talks is U.S. food aid, which is being challenged by Europe, Canada and others as U.S. agribusiness disguised as export subsidy.

Campaigners say that U.S. food aid, initiated in 1954, continues to be driven by the motive of disposing large surpluses of cereals and capturing new markets.

Also in full force here are representatives of the U.S. and European corporations and manufacturers, many of them clamouring to lobby their decision makers to open more and new markets for their products, especially in advanced markets like China, India and Brazil. Apart from agriculture, rich countries are vying to get developing nations to commit to agreements on services and industrial market access.

“People seem to forget that manufactured goods comprise 75 percent of world trade, and we can’t strike a deal if we don’t include real trade liberalisation for manufactured goods and services, too,” said John Engler, president of the National Association of Manufacturers, a major U.S. industry group.

A representative of the software giant Microsoft, who spoke to IPS on condition of anonymity, said that his job at Hong Kong is “to stay as close as possible to decision makers” with the purpose of “getting them to open new markets”.