WTO: From Cancun to Hong Kong, from failure to hope

A group of journalists from Indonesia, Malaysia and Vietnam, including Riyadi Suparno of The Jakarta Post, visited Switzerland last week at the invitation of the Swiss government. One of the functions of the visit was to meet with World Trade Organization (WTO) officials in Geneva. The following is the Post's report on the visit to the WTO headquarters.

After a series of failures to jump-start a new round of trade negotiations, hopes are rising once again that the upcoming ministerial meeting of the World Trade Organization (WTO) in Hong Kong later this year will deliver results.

There is growing optimism among officials at the WTO that the upcoming ministerial meeting in Hong Kong -- unlike the last ministerial meeting in Cancun, Mexico -- will be less explosive and divisive and therefore, will deliver results.

According to the officials, the sharp division between developed countries on the one hand and developing and least developed countries on the other is less visible now.

Moreover, trade ministers coming to the next meeting in Hong Kong would be under less pressure to deliver results as everyone knows that the target date to complete negotiations on the Doha Development Agenda has already expired.

Instead, according to WTO officials, there is a tacit agreement among a significant majority of members to complete the current round of negotiations over the Doha Agenda by the end of next year.

What the trade ministers are expected to produce in Hong Kong will be a set of ground rules for negotiations -- especially in five key areas, namely agriculture, non-agriculture market access, services, trade facilitation and development issues -- so that they can set in motion the negotiations and wrap them up by the end of next year.

"If we are serious and sincere about our goal to complete this round by the end of 2006, then, Hong Kong must be a sort of preparatory ground for the negotiations for 2006," outgoing WTO secretary-general Supachai Panitchpakdi told visiting journalists from Indonesia, Malaysia and Vietnam at the WTO headquarters here last week.

Supachai explained that even when ministers in Hong Kong could deliver the ground rules or modality for negotiation, it would still need at least six months to make them operational.

It would first of all require member countries to identify thousands of tariff lines for reduction, and then, they would have to compare notes and negotiate over them.

"In the end, we have to negotiate again, to conduct horse trading again, and it takes time," said Supachai, a former deputy prime minister of Thailand.

Trade negotiations under the WTO have been bogged down by a stark division between developed countries led by the United States, the European Union and Japan on one front and developing and least developed countries led by major developing countries such as India, Brazil and Indonesia on the other.

The division was apparent since the first ministerial meeting in Singapore, where the developed countries-sponsored issues of labor, investment and government procurement emerged. These "Singapore issues" have drawn resentment from many developing countries.

The division deepened during the selection of a new WTO secretary-general to replace Renato Ruggiero. The two blocks could not agree on one name. After a year of wrangling, they finally agreed in July 1999 to appoint Mike More of New Zealand and Supachai of Thailand to sit alternately in the position as secretary-general for three years each: More from Sept. 1, 1999 and Supachai from Sept. 1, 2002.

The stark differences between developed and developing countries contributed to the failure of the third ministerial meeting in Seattle, United States, in December 1999. In addition, the rowdy and unruly protests by anti-globalization groups contributed to the failure in Seattle.

With fewer protests from anti-globalization groups during the fourth ministerial meeting in Doha, Qatar, developed and developing countries surprisingly managed to produce a significant agreement to launch a new round of trade negotiations, called the Doha Development Agenda or Doha Agenda.

The Doha meeting set an ambitious timetable to complete the negotiations by the end of 2004. This target, however, became meaningless following the failure of the fifth ministerial meeting in Cancun, Mexico in September 2003.

The talks in Cancun, also colored by protests from anti- globalization groups, collapsed amid growing divisions among member countries over several important issues, notably the Singapore issues and farm trade.

Now, people are pinning their hopes on the sixth ministerial meeting to be held in Hong Kong, from Dec. 13 to Dec. 18 this year.

As explained by Keith Rockwell, WTO director for information and media relations, developed and developing countries now are less antagonistic, especially ahead of Hong Kong. Moreover, the talks in Hong Kong will not really cover substance, but only modalities for negotiations.

Despite optimism, the chance of failure in Hong Kong is also big, considering the WTO principle in the decision making process, which requires a consensus. This means every country must accept a decision, and there are no dissenters.

Another WTO principle of "single undertaking", meaning that countries must take all -- agriculture, non-agricultural market access, services, trade facilitation and development agenda as one package -- makes it even more difficult to reach a consensus.

If the trade ministers cannot agree even on the modality in Hong Kong, it would take years to complete the current agenda, and worse, the future of the multilateral trading system could be at stake.

At the end of the day, it would take political courage from all member countries to give and take, as in any negotiation, to make the Hong Kong meeting a success.