Current WTO talks may become the 'anti-development' round

The World Trade Organization (WTO) is under pressure to get results in its coming 6th Ministerial Meeting in Hong Kong in December and prevent the talks from collapsing as they did at the last ministerial meeting in Cancun, Mexico, in 2003. Malaysia- based Third World Network (TWN) director Martin Khor, who joined a workshop last week formulating recommendations for Indonesia's negotiating team in facing the Hong Kong meeting, spoke with The Jakarta Post's Riyadi Suparno and Zakki P. Hakim on the latest developments in negotiations at the WTO. The following is an excerpt of the interview:

Question: What should developing countries do to prepare for the Hong Kong meeting? Answer: Most of the negotiations will take place before Hong Kong. Therefore, September, October and November would be a very important time. If we can't reach a decision by November, the rich countries might do something in Hong Kong.

The negotiations would focus on the major issues of agriculture, NAMA (industrial goods) and services. Those are the three main issues now, as well as development issues.

Government officials from developing countries keep saying WTO talks must focus on the "D" in the Doha Development Agenda. How is it really going? The Doha agenda round is said to be about development and the interests of developing countries is the top priority at the center. But in reality, it has not worked out like that. From 2001 until today, the progress is very little. The reason is the developed countries, especially the European Union and the United States, have a strategic strategy, that is, to make use of the WTO for their own interests especially to open up the market of the developing countries while also continuing to protect their agriculture.

This is the big concern. If we don't stand up for our rights firmly, we will actually see this become an anti-development round. The development aspects come in two ways, one is the development issues that are supposed to be negotiated, that is, how to strengthen "Special and Differential" treatment for developing countries. The second is known as implementation issues, where developing countries face problems in implementing their Uruguay-round obligations.

In Doha in 2001, it was promised that these two issues would be settled before concluding the other issues. They are so important to restore the confidence in the WTO, because the developing countries are losing confidence in the WTO. But what we've seen today is that there's no progress in these two issues.

This is very frustrating for developing countries.

Furthermore, it is said the development aspect must be at the center of agriculture, NAMA and services. We also haven't seen this going on.

The fact is agriculture is seen as the center of WTO negotiations, what is happening?

In agriculture, most people accept that rich countries are supposed to reduce and eliminate their subsidies. In the export subsidy, they have agreed to eliminate it but they didn't say when. So we need to know when.

Second, on the domestic subsidy, people now realize that the EU and U.S. do not intend to reduce their subsidy. They will reduce some subsidies, but they will increase other subsidies allowed under the WTO. They will continue their subsidies because of the strong agriculture lobby they have. At the same time they are demanding that we cut our tariffs even more.

This is unfair. Their products are heavily subsidized. It is artificially cheap, they are selling it to us. Whereas our farmers are more efficient, but we don't pay them subsidies, as we don't have the money. The only way we can protect ourself from unfair, artificially low-priced imports is to have a high tariff. Otherwise we don't have any defense.

Can Indonesia do anything to influence the course of the negotiations?

Indonesia is playing an important role as the coordinator of the Group of 33. The G-33 is trying to say that for Special Products (SP) that our farmers depend on for food security we should be allowed not to cut the tariff.

Under the Special Safeguard Mechanism (SSM) if there is a surge in imports, we should be able to raise the tariff above the bound rate. So this is what the 44 members of the G-33's are fighting for. Unfortunately, what the rich countries are saying is this: "In principal we agree with you. In practice, how much power, we will give you for SP-SSM we don't know yet. We will wait to the last minute."

This is not good. This should be at the front, as it was said that development should be the center of this round. They must guarantee us these two things, they must give in to our demand, then we will talk about the formula (of overall tariff reduction).

These are the big challenges in Hong Kong, whether Indonesia as the leader of the G-33 can stand by itself and maintain the unity of the group.

What will happen if the Hong Kong talks collapse like Cancun?

We artificially create the fear of failure, crisis, in order to push negotiations through. We can take time five years, 10 years, why must it be two months?

If we don't finish the round this year, it doesn't matter, because the WTO is still there, the rule is there, the dispute settlement mechanism is still there. It's an artificial deadline. We shouldn't be bullied. There's no real threat to the global trading system. The threat would be if we signed something that is very unfair and then our farmers would lose their jobs.