TWN Info Service on WTO and Trade Issues (Dec05/14)

14 December 2005

Ministerial opens amid protests and diplomatic activism

Hong Kong 13 Dec (Martin Khor) -- The WTO’s 6th Ministerial began with an opening ceremony this afternoon with set-piece speeches by the meeting’s top officials, and then went straight into work with the first consultation sessions on NAMA and specific development issues.

Tonight the first “Green Room” meeting was held, starting 10.00 p.m.   According to diplomatic sources, the meeting was being attended by about 25 to 30 delegations at Ministerial level.  The consultation meetings were announced by the conference chairman, Hong Kong Commerce Secretary John Tsang.  He however did not inform the participants about the Green Room meeting.  Few delegations were aware where it was being held, who the invited delegations were, nor what was the initial topic of discussion.

The opening ceremony was going like clockwork until mid-way through Director General Pascal Lamy’s speech.  Suddenly, about 30 NGO representatives who were in the huge hall, stood up, unfurled a banner reading “No deal is better than a bad deal”, and started chanting slogans, such as “Yes to Development.  No to Doha Round.”  Many placards appeared, with the slogans:  “WTO Kills our Jobs!”, “WTO Kills Farmers”, “WTO Kills our Environment”, “Reject the Doha Round.”

Ironically, as the protestors’ chants partially drowned out what Lamy was saying, the Director General had just reached the part of his speech that said:  “The WTO – the crowds in and certainly outside this building will remind you with sound and sometimes fury – is not the most popular international organization around, to say the least.”

Outside the Convention Centre, hundreds of protestors were clashing with police, after a protest march by several thousands of people, including farmers and fisherfolk from various Asian countries. Shops closed early and many schools decided take a holiday.  Almost a hundred Korean farmers jumped into the harbour from boats and started swimming to the Convention Centre area until they were stopped by marine police.

The protests outside and inside the conference hall manifested the deep seated public mistrust mixed with anger by a wide range of social movements, NGOs and ordinary citizens, who fear that their livelihoods and jobs will be even more affected by import liberalization arising from the decisions to be taken in the Doha negotiations.

Opening the conference, Donald Tsang, Chief Executive of Hong Kong, said that trade liberalization and economic growth is a permanent goal for all WTO Members, but he acknowledged that “in some parts of the world this goal is seen as a threat rather than an opportunity.”   Nevertheless, “the negotiations under the Doha Development Agenda must press ahead.”   Conference chairman John Tsang said the 100 working hours of the conference should be used to build on the draft text and agree on a roadmap for work in 2006. In particular, he wanted “as many tangible results as we can on development-related issues.” 

The most substantial message came from UN Secretary General Kofi Annan.

In a statement delivered by UNCTAD Secretary General Supachai Panitchpakdi, Annan said that development -- real gains in real peoples’ lives -- remains the primary benchmark for success of the Doha Round.  “Whatever other smaller steps your negotiations achieve, development writ large is the standard against which your efforts will be judged,” he said.

“While the EU and G8 agreed on significant increases in aid and debt relief, they did not set a clear, unambiguous date for ending trade-distorting subsidies and giving market access, especially in agriculture.  Such subsidies significantly reduce the prices that farmers in developing countries receive for their crops, in a sector that is crucial for their sustenance and livelihoods. Farmers and purveyors of other goods and services in developing countries continue to be subjected to protectionism in the developed world in precisely those areas where they can be most competitive.  And while developing-country tariffs are also problematic, these countries cannot be expected give up either revenues or leverage without new and better export opportunities.

“Rich countries will have to reject not just protectionism, but populism, too.  They will have to speak honestly to their people about the changing economies of the 21st century, and about global interdependence and the fact that prosperity elsewhere means prosperity and jobs at home.  They will have to help the vulnerable people in their societies with training and other support.  And they will have to recognize that a complex network of bilateral and regional trade agreements is not a substitute for an effective multilateral framework.”    

In the business part of the meeting, Tsang confirmed the facilitators assisting him to run the conference:  the Ministers of Kenya (for agriculture), Pakistan (NAMA), Guyana (specific development issues), and three “facilitators at large” (Norway, Korea and Chile) for services, rules and other issues.  Members were asked to meet the facilitators with their concerns.  The first head of delegations informal meeting would be held Wednesday evening.

Shortly after, the first informal meeting on NAMA was held, chaired by Pakistan Commerce Minister Humayun Khan.  According to a trade source, the facilitator said he hoped participants would avoid the temptation to use the large meetings to restate well known positions or to engage in tactical statements.  He preferred the process to consist of small group meetings or bilateral consultations with him so he can obtain a sense of Members’ interests and concerns, but there would also be plenary sessions.

Khan said that his objective was to reach a NAMA result which would be acceptable to everybody.  "It remains to be seen how much we can improve the text, if at all, but we must all do our best". He also said it would be a pity to waste the opportunity we have at this Ministerial to move the NAMA negotiations forward. "If we don't make progress this week we leave ourselves a monumental task next year", he said.  The short meeting ended without any statement from members.

At a press conference after the opening, Lamy indicated that the first topics to be covered (presumably in the Green Room) would be the development, followed by agriculture and NAMA where there is need to move forward.  According to him, Annex C on services was already very substantial, indicating that there was more agreement on this topic and thus it could be resolved later.

However, this assumption is questionable, as there are sharp divisions on how to treat the text on services and its controversial Annex C.  According to a trade diplomat, some members of the “core group” on services (including US, EU, Japan, Canada, Australia, India, Malaysia, Brazil and Chile) held a meeting Monday afternoon at which the EU pushed an agenda to strengthen the text on services, aimed at further increasing the obligations or pressure for developing countries to liberalise.

The EC indicated it wanted language in the text that recognises the principles and objectives for the end of the round, while leaving dicussion on the specifics for later. This, said the diplomatic source, seemed like a way to add language to the services section of the main Ministerial texts that opens the door to introduce language suggesting numerical benchmarks, which the EC has been pushing hard for in recent months. The EC also wanted better “balance” in the section in Annex C on modal objectives. By this it meant that it wanted even stronger language for commitment in Mode 3 (commercial presence).   Finally, the EC said there was need for a better definition for the plurilateral approach (covered in paragraph 7 of Annex C) because at the moment it is only dealing with the process.    Apparently the other members in the meeting were not enthusiastic about the EC proposals, and some criticised them for rocking the boat.

Meanwhile, other diplomatic sources said that the members of the ACP Group were discussing among themselves a proposal to amend Annex C, in line with the points made by the Group as well as the Africa Group at WTO meetings in Geneva.  At those meetings, the two groups had voiced their opposition to the sectoral approach (paragraph 2), the reference to a possible framework on government procurement, and the mandatory nature of the plurilateral approach (paragraph 7).  The ACP Group, perhaps in conjunction with the Africa and LDC Groups, could submit their proposal at Hongkong, or they could make use of the points their experts had earlier prepared in Geneva during the consultations with the facilitators.

During the day, the war of words between the EU and other major members in the agriculture negotiations continued, in a heightened form of the “blame game” that had earlier been played in Geneva.  At a morning press briefing, on aid for trade, Peter Mandelson was asked what he thought of a statement by USTR Rob Portman that export subsidies should be eliminated by 2010.  “The USTR does not have export subsidies that he can give away,” replied Mandelson in an icy tone.   “He does however have the problem of fake food aid.  If he can end this fake food aid, that would be good.”

The issue of food aid used as export subsidy also came up at Lamy’s press conference later in the day.  Asked why this issue was important, Lamy said he hoped the EU and US would agree to criteria on what would be legitimate food aid (which the US provides), and this is the key to enable an end date for elimination of export subsidy.  He hoped this could be settled in Hong Kong.

Meanwhile, the G20 and the G33 held several meetings, some among their own members, some with members of other groupings, some with NGOs and some with journalists.  This flurry of activities indicate that the two groupings are determined to maintain unity of members within their groups, and to be active in the negotiations this week as well as in outreach to the public.