TWN Info Service on WTO and Trade Issues (Dec05/24)

19 Dec 2005

Uncertain last day ahead -- roller-coaster events in and outside Ministerial

Below is a report written on the morning of 18 December, the last day of the WTO Ministerial Conference, before the revised draft Declaration dated 18 December was issued.  We are sending it to you for reference purposes.

This report was published in the TWN Hong Kong Update no. 6 which was distributed at the conference site.

With best wishes
Martin Khor



The final day of the Ministerial arrived with most participants very uncertain as to what would happen today - whether the Green Room meeting was still on, what transpired there overnight, when a revised Ministerial text would be available, what time the final heads-of-delegation meeting would be held to consider it, and when the final official plenary would be held.

More importantly, it was not clear whether the "Green Room" -- comprising about 30 delegations - had come to some agreement on the outstanding issues, and on the way to proceed after Hong Kong.  It is not known too how the majority of members, who are not in the Green Room process, will react to any decisions taken there.  Presumably the regional and issues-based groupings - such as the G90, the G20, G33, EU, etc - will plan to meet to inform the constituent members what the situation is, and how to respond to the various points discussed and agreed or not agreed at the Green Room.

According to sources, the Green Room process had taken place through the night and into Sunday morning.  It met from midnight Saturday and ended at 9.30 a.m. on Sunday.  According to sources, the meeting may have brought about more convergence on some issues, but there was no consensus on the issues generally, and on some issues there was still major contention. 

Two major issues still in contention were the end date for agricultural export subsidies, and LDC market access (the percentage of products to be covered, and a last-minute proposal by a few members that some kind of safeguard should be created (a proposal that went down badly with the LDC representatives).

As at 10 a.m. Sunday, the time schedules would appear to be a new text coming out at midday, with the HOD meeting to convene in the late afternoon, and the closing session to be shortly after that.  In any case the conference has to end tonight, as the conference chair, John Tsang of Hong Kong, had warned at the opening session that the deadline for closing the meeting on Sunday was very firm.

On a Saturday that saw tumultuous events on the streets just a few hundred metres from the Convention Centre (with thousands of protestors trying to break the barriers to enter the Conference area, and 900 being arrested and almost 50 people injured), delegations responded with varying degrees of disappointment to the revised draft Declaration.  However, the mood seemed to be one of wanting to amend or fill in parts of the document, and not a rejection.

Key issues of contention arising from the negotiations and the text included:

* LDC duty and quota free market access:  The text did not mention binding commitment though it had language for "a lasting basis".  It mentions coverage of all products and all LDCs, but has an escape clause for countries facing difficulties to comply, requiring that these provide access for at least (y%) products by year (x).    The values in bracket were being negotiated early Sunday morning.

* Two options were given for the end date for all forms of export subsidies: 2010 or 5 years from commencement of implementation (which was generally taken to be 2013, assuming 2008 to be the start of implementation; a convenient date as the EU's present CAP ends in 2013).  According to sources, a meeting of the EU's Ministers decided by a majority to accept an end date, and it would be the second option (5 years after commencement).  According to sources, at the Green Room meeting, this option was not taken well by Brazil, and the issue was still not revised by 11.00 a.m. Sunday.

* On cotton, the text states that cotton export subsidies will be eliminated in 2006, but domestic subsidies would only be reduced more quickly and ambitiously than the general formula for agriculture overall, while LDC cotton exports would have duty and quota free access from commencement of implementation issue.  The cotton-producing countries advocating fast-track action expressed unhappiness with this, as it represented no progress on the most important issue of domestic subsidy, while the US indicated that it could not accept export subsidy elimination so early, and this would have to be within the frame of an overall agriculture solution.

* On services, many developing countries are upset that there has not been much change in Annex C.  The mandatory nature of plurilateral negotiations has remained in para 7b, although the language has changed to "shall consider such requests" - but in accordance with clauses in GATS and the Guidelines which mention plurilateral negotiations.  They are also against the text's retention of para 2 on sectoral/modal objectives and its notorious footnote on a contentious document.  Some have problems with the retention of para 1 with its many specific details on qualitative benchmarks.  As the changes appearing in the revised draft were those proposed by the EU, it would like it accepted.  Negotiations on textual changes took place on Saturday night and Sunday morning in the Green Room.  But a key factor is the views of the larger membership, in particular the response of the G90 and the six countries that wrote a letter to the conference Chair rejecting the original annex C.  What happens on this issue, and whether the Annex can be revised here or be taken back to Geneva for further talks, remains to be seen.

* On NAMA, para 14 adopting a "Swiss formula with coefficients" is a problem with some developing countries that want it amended or clarified that options other than a "simple Swiss formula" are on the table as the present language could give the impression of agreement on a simple Swiss formula.   The issues of preference erosion and small economies are bracketed and have to be resolved.

* Preference-receiving countries are disappointed with the language on the preference erosion problem and are likely to fight for stronger recognition of their problem and direction for solution.  However, some non-preference countries could object to this, or even to the present language, for example in para 18 of the NAMA annex.

By noon Sunday, it was unclear how the events would unfold.  Only one thing seemed certain: it will be a roller-coaster ride today - both inside the Convention Centre and even more so outside on the streets of Hong Kong.