WTO conference in Hong Kong: Negotiators end export subsidies

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SALEM, Ohio – The multinational World Trade Organization talks in Hong Kong wrapped up Dec. 18, but it took plenty of all-night, closed-door meetings to reach consensus among the 149 member-countries on a final report.
The talks favored developing countries, said WTO Direct-General Pascal Lamy at the close of the session.
“There has been a rebalancing in favor of developing countries, whose interests have now been placed at the heart of our negotiations,” Lamy said.
Export subsidies cut. Agricultural market access remains blocked, but U.S. Trade Representative Rob Portman said countries agreed to eliminate export subsidies by 2013, and remove many of those subsides before that date.
In fact, for cotton, the elimination is accelerated to the end of 2006, and cotton exports from least developed countries will be allowed into developed countries without duty or quotas.
The final declaration, however, indicates the agreed date is conditional. Loopholes have to be plugged to avoid hidden export subsidies in credit, food aid and the sales of exporting state enterprises.
‘ Some progress.’ At the meeting’s close, Portman said the talks made “some progress.”
“This conference made it clear that there is a consensus among countries rich and poor, North and South, large and small, that more open trade is the road to more prosperity,” Portman said in a closing press briefing Dec. 19.
A. U.S. proposal that was adopted increases the number of products that will come duty-free and quota-free.
Portman said there was also an agreement on “trade facilitation”, or the elimination of red tape and additional costs and customs procedures.
Developed nations also made commitments for new pledges for aid to least developed countries.
During the Hong Kong talks, the U.S. pledged to double its aid for trade contributions from the current level of roughly $1.3 billion a year to $2.7 billion annually over the next five years.
Ag deadlock. Portman admitted agricultural issues continue to block trade negotiation progress.
“In order to see the [Doha] round come together, we have to unlock the agriculture deadlock,” he said.
Agriculture, Portman added, is where the highest tariffs are, where the highest trade distorting support is and it’s where the most development gains can be found.
“Opening markets is the only way to achieve real trade liberalization,” said American Farm Bureau President Bob Stallman at the close of the Hong Kong talks.
The farm group opposed the efforts to single out cotton’s domestic supports, and also pointed fingers at the European Union for delaying ag reform negotiations.
The 25-nation EU pushed the farm export subsidy deadline back to 2013; other countries wanted the subsidies to end sooner, by 2010.
Several U.S. legislators expressed disappointment in the talks’ outcome. U.S. Senate Finance Committee Chairman Charles Grassley said more work needs to be done.
“It’s good that the ministerial will lead to more negotiations,” Grassley said. “On the toughest issues, it just kicks the can down the road.”
Specifically, Grassley said the talks’ agreement missed the boat on market access.
“I can tell you right now that without substantial improvement over the next few months, this framework will go over [in Congress] like a lead balloon.”
Under the U.S. system, the president negotiates trade agreements, but Congress must pass legislation implementing those trade agreements, like the Doha Round agreement.

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