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

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.