What happened in Hong Kong?

Initial analysis of the WTO Ministerial, December 2005

The WTO Hong Kong ministerial meeting was a lost opportunity to make trade fairer for poor people around the world. Rich countries put their commercial interests before those of developing countries. Most of the difficult decisions were put off to a further meeting in early 2006, but it is far from clear why rich countries that were unable to show the necessary leadership in Hong Kong will behave any differently in a few months’ time.

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Summary

The WTO Hong Kong ministerial meeting was a lost opportunity to make trade fairer for poor people around the world. Rich countries put their commercial interests before those of developing countries. Small progress in agriculture was more than cancelled out by anti-development texts in services and industrial tariffs. Most of the difficult decisions were put off to a further meeting in early 2006.

Developing countries in Hong Kong continued to consolidate into a number of different blocs, thereby increasing their voice in the negotiations. Hong Kong saw the different groups come together to form a loose alliance called the G110 to put pressure on the EU and USA to reform their agriculture regimes. This was partly in response to the rich countries’ attempts to play developing countries off against one another.

In agriculture, the bulk of the work remains to be done, notably in disciplining rich country domestic subsidies, which lead to dumping and remain largely untouched.

The final ministerial declaration contained some minor gains on agriculture, such as setting a 2013 end date for export subsidies, and providing developing countries with extra flexibility to protect their small farmers. There was some progress on preventing the abuse of food aid as a disguised form of dumping, but on cotton, the steps agreed fell short even of those required by the cotton panel ruling against the USA.

Developing countries successfully fended off some of the attempts to force open their markets to Northern industrial and service sectors. However, even the toned-down text on non-agricultural market access (NAMA) and services is inimical to development.

The offer of duty-free, quota-free market access to the poorest countries contains sufficient loopholes to rob the agreement of almost all value. An ‘aid for trade’ deal was agreed consisting largely of recycled money, and there was no progress on other ‘development issues’.

When talks recommence in early 2006, rich-country negotiators cannot simply turn up and carry on where they left off in Hong Kong. They need to go away, examine their consciences, and make a New Year’s resolution to turn this into a development round for the world’s poor.

Date of publication: December 2005