Delegates to the WTO sixth ministerial conference in Hong Kong have lowered their ambitions to avoid disappointment, writes Niveen Wahish "Hong Kong should bring us closer to the finishing line next year." Thus Pascal Lamy, director-general of the World Trade Organisation affirmed that this would be the most that would come out of the organisation's sixth ministerial meeting currently taking place in Hong Kong. No longer is the target to reach modalities and formulas as was the case earlier this year. What Lamy wants is for members to "strengthen the draft declaration, build on it, and take it forward". Ministerial conferences are the WTO's highest decision-making body, meeting at least once every two years. This sixth conference is viewed as critical in enabling the four-year-old Doha Development Agenda (DDA) negotiations to move forward sufficiently and to conclude the round in 2006. The current round of talks, which is meant to broaden liberalisation on issues ranging from farm and industrial goods to services and rule changes, was meant to conclude in 2004, but the collapse of the Cancun ministerial in 2003 set things back. Then, it was agriculture that broke down negotiations when developing countries, represented in the Group of 20 (G20), insisted on seeing cuts in export subsidies and domestic support for agricultural products in developed countries. Today, a similar scenario is being played out. Again, developing countries are keen on receiving concessions in the area of agriculture, while developed countries are not willing to give up their protectionism. Moreover, developed countries are insisting that developing countries should reciprocate by liberalising Non-Agricultural Market Access (NAMA) and services. Both sides are holding their ground, with developing countries insisting that the Doha round specifically address the concerns of poorer countries. With this being the case, nothing noteworthy is expected to come out of the Hong Kong conference. But, as Walid El-Nozahi, head of the central department for the WTO at the Egyptian Ministry of Foreign Trade and Industry (MFTI) put it, "Hong Kong is not the end of the world," pointing out that "this is a chance for stock-taking and follow-up to what has been achieved so far and an opportunity to put things back on track." El-Nozahi expects a second conference to take place in four or five months in which a final agreement will be reached. In fact, member countries have around six more months to reach an agreement. The deadline for a new trade deal is the end of 2006, after which special US "fast-track" negotiating mandate elapses. The blueprint, however, must be ready months before. The fast-track only permits Congress to approve or reject trade deals without amendments. Without it, Congress would be free to reject specific points in any agreement, making it much more difficult to pass. The expiry of the US fast-track had caused a problem during the conclusion of the Uruguay round of trade talks. At that time delegates scrambled to reach an agreement on agriculture, which was also a point of contention at the time, but that time between developed nations, before the mandate expired. But El-Nozahi is hoping it will not come to that. Nor does he believe that the DDA will fail. "Lamy will try to maximise benefits in Hong Kong to push for a solution in 2006." He stressed that it is not in the interest of developing countries that no agreement is reached at all. "This has been dubbed the development round; it is not in the interests of developing countries that it fail. Preparations for the conference are a burden on everyone. We should maximise the benefits of the development round." Not surprisingly, then, it is particularly the issue of development that Egyptian minister of foreign trade and Industry, Rachid Mohamed Rachid, hopes to address. In a statement released on Monday, Rachid said there can be no real progress in Hong Kong unless development takes centre stage in all negotiations. "Development cannot be deferred, like a red herring, to the last meeting at the end of the round. Leave development to the end and you risk another Cancun," he warned. Rachid stressed that developing and developed nations alike must first reach consensus on a unified concept of what development actually means and how it is best pursued. He plans to share Egypt's proposal on development during this week's ministerial. "At present, we have a system whereby those who donate funds are those who both implement donor programmes and assess the outcome of these programmes. If the needs of developing countries, and least developed countries, are to be effectively met, we need a new international institution on a governance level -- a conduit for donor money that does not rival existing institutions but manages, differently, the flow of funds," Rachid said. He also warned that failure to reach consensus on development will affect the pace and outcome of negotiations. But, he added, "there must also be a clear recognition that for Hong Kong to deliver on its true development promise, it should not become synonymous with a discussion on agriculture alone. There can be no Doha round without also reaching consensus on areas such as NAMA and services." Egypt itself is prepared to negotiate on all fronts. On various occasions MFTI officials have made Egypt's position clear. On agriculture, Egypt is all for cutting domestic support and export support to agricultural products. This would mean greater access for Egypt's agricultural exports into the markets of developed countries. In the meantime, Egypt is stressing that any preferences that developing countries may be currently receiving are not lost. Egypt is also calling for the application of a safeguard mechanism that developing countries could revert to, in a way of protecting their weaker markets. In addition it is asking that developing countries be allowed to make lower tariff cuts than developed countries. On industry, Egypt believes that any initiatives to liberalise trade on non-agricultural goods should take into account the status of industries in developing countries and give them longer periods to liberalise their markets. To Egypt, NAMA negotiations are less threatening, mainly because Egypt's applied tariff rate is much lower than the bound rate, or the rate it had committed itself to within the WTO. Even when applying the maximum tariff cut demanded by developed countries, Egypt's applied rate would continue to be lower than the new-bound rate -- with the exception of a few products. That is attributed to the fact that the September 2004 customs slashes were drastic and had exceeded any of Egypt's commitments to the WTO. Furthermore, Egypt may be allowed to maker lower tariff cuts, or exempt altogether, a list of the products that it feels may be negatively affected. Egypt is also asking that developing countries not be required to reciprocate equally to developed countries. In the NAMA negotiations, what Egypt is more worried about are not the tariffs so much as the non-tariff barriers, in particular the technical barriers to trade, customs valuations, sanitary and phytosanitary requirements and labelling. Experts believe developing countries do not have the infrastructure to meet these requirements. In the services negotiations, Egypt's position is also clear. Together with some developing countries it is against putting a benchmark for concessions made by countries in the area of services liberalisation. The General Agreement of Trade in Services is a flexible agreement that does not impose commitments on members, but allows them to choose the areas they are willing to liberalise and to accept or refuse requests to open up certain areas. The idea of benchmarking offers was suggested by developed countries who feel that insufficient progress has been made in the area of liberalisation of trade in services. Nonetheless Egypt remains committed to making headway on this issue.
