Piece by Piece by Piece
Agreement reached on incremental advances in WTO negotiations
WASHINGTON, DC - 12/18/05 - Trade ministers meeting in Hong Kong have accepted an agreement that would advance incrementally long-stalled World Trade Organization (WTO) negotiations but leave most politically difficult decisions for 2006, according to published reports.
Hours before the meeting was scheduled to end today, ministers approved a declaration that would give more direction for concluding the negotiations, formally called the Doha Development Agenda, by the end of 2006.
"We are cautiously optimistic that within the next several hours, we will have that very important platform for a Doha Development Agenda and a major round that will be negotiated in the coming year," Deputy US Trade Representative Susan Schwab said at a Hong Kong press briefing.
"Real progress was made, and this ministerial was obviously a prerequisite for moving forward with a robust multilateral trade agreement," she said.
The declaration would eliminate agricultural export subsidies by 2013, a date acceptable to the European Union (EU), which accounts for about 90% of such spending. The US and developing countries had pressed for a 2010 deadline.
"I prefer to see 2010, but most important to me is that we take advantage of this opportunity to get 150 countries together and make progress where we can," US Trade Representative Rob Portman said early in the day. "If 2013 is the best we can get, I think we ought to look at that very, very carefully."
On an issue of importance to West Africa, the agreement would eliminate export subsidies on cotton in 2006. The US Congress has been expected to repeal such cotton export subsidies already, likely within days, in order to comply with an adverse WTO dispute-settlement panel ruling.
Deputy US Trade Representative Karan Bhatia said at the briefing that the document would provide duty-free, quota-free access to cotton from the poorest least-developed countries once implementation starts on any agreement reached in the Doha negotiations round.
The document states as an objective that any negotiated cuts in domestic support spending for cotton farmers in countries that have such programs would have to be deeper and implemented faster than any other domestic agricultural subsidy cuts.
Bhatia had worked intensively with negotiators from Burkina Faso, Benin, Mali, Chad, and Senegal - countries that had threatened to block any Doha Round agreement without satisfactory resolution of the cotton issue.
"The United States and our African partners are working closely together to expand trade and economic opportunities for Africa," Bhatia said. "We are pursuing a common vision of generating economic growth by opening markets around the world."
The document would provide duty-free and quota-free market access for most products from the least-developed countries "by 2008 or no later than the start of the implementation period" of any negotiated agreement.
It would require such access for at least 97% of products as defined by the tariff schedule. The US had pressed for exceptions to duty-free, quota-free market access for specific products - such as certain textiles from Bangladesh and Cambodia - that already trade competitively on the global market.
The Doha negotiations have languished almost since they were launched in 2001, with an impasse over politically difficult agriculture issues blocking most other progress.
They are scheduled to conclude by the end of 2006, a deadline of sorts for the US, which has trade negotiating authority from Congress only until July 2007.
WTO members had agreed in a July 2004 framework for negotiating on agriculture on eliminating export subsidies but left the deadline for further negotiation.
In parallel with export subsidy elimination, the revised declaration would also require negotiated agreement by April 2006 on disciplines - or rules - for agricultural export credits and credit guarantees; on monopoly state trading enterprises such as grain marketing boards in Canada, Australia, and New Zealand; and on food aid.
The language on food aid says WTO disciplines would not prevent food from going to hungry people in emergencies but would prevent displacement of commercial sales by donations of excess commodities.
The EU had been pressing to restrict food aid to cash only, a position vigorously resisted by the US.
Even with agreement on export subsidies elimination, much more difficult negotiations remain on the other major groups of agricultural issues concerning domestic support payments to farmers and tariffs.
In October the US had submitted a proposal for drastically reducing agricultural tariffs and the most trade-distorting domestic support. This attempt to rally support for robust results at the Hong Kong meeting achieved little, as the EU subsequently made a counter-proposal that analyses show would produce little or no real additional market access.
The revised declaration indicates little progress on the other major agricultural issues of tariffs and domestic support. On tariffs, the document formally adopts existing working language setting four bands, from highest to lowest, but sets no level of ambition - or target - for cuts. Washington had pressed for deep cuts, deepest at the highest level.
The document has no specific language on limiting the number of sensitive products excluded from tariff cuts. The US had pressed for a limit of 1% of products, as defined by the tariff schedule; the EU had sought 8%, or about 160 products.
On trade-distorting domestic support, the declaration adopts some new language setting three bands for cuts but no specific level of ambition.
The sharpest cuts would have to be made in the highest band, concerning the EU, the WTO member currently allowed to spend the most money on domestic support, about 3 1/2 times the allowed US level.
The US and Japan, in the second band, would have to make somewhat smaller cuts, while other countries, in the third band, would have to make even smaller cuts.
In language worked out on EU demand, the document requires that tariff cuts in industrial goods achieve "a comparably high level of ambition" as agricultural tariff cuts.
The declaration indicates little progress on industrial tariffs except for setting an April 30 deadline for establishing modalities - or procedures and conditions - and a July 31 deadline for submitting country offers.
It would adopt what is called a Swiss formula for the tariff cuts, requiring the sharpest cuts for the highest tariffs.
The US had pressed more specifically for a so-called "Swiss formula" that had two coefficients - a higher one requiring deeper cuts for the developed countries and a lower one for developing countries.
The document specifies no number of coefficients.
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