A Hong Kong Declaration
Kimberly Elliott, a joint fellow at CGD and the Institute for International Economics, is writing a book on agriculture and the WTO. She responded to questions about whether or not recently concluded trade talks in Hong Kong address the needs of developing countries.
Q: What was the result of the WTO meetings in Hong Kong?
A: The trade ministers in Hong Kong just barely managed to meet the low expectations they set for themselves heading into the meeting. This means that the negotiations still have a chance to reach a meaningful agreement in 2006, but the pace and the willingness to make politically difficult concessions will have to increase substantially.
Q: Can we think of any of the results as "development-friendly?"
A: The only tangible results were the setting of a date for eliminating export subsidies and agreement by US and other rich country negotiators to provide tariff-free, quota-free access for exports by least-developed countries. Unfortunately, the first commitment was conditional on progress in others areas that may not be forthcoming. The second was significantly weakened because the US insisted that countries be allowed to exempt up to 3 percent of tariff lines and diluted language intended to simplify rules of origin that determine what products are eligible. The US Trade Representative was concerned about Congressional opposition to eliminating tariffs and quotas on textiles and apparel, and sugar. The commitment to eliminate export subsidies on cotton in 2006 was also more symbolic than real because the US Congress is already in the process of repealing these subsidies in response to a WTO panel ruling on cotton. No other country provides such subsidies. The failure to agree on any concrete commitments with respect to "aid for trade," other than inviting the Director-General to create a task force to study the issue, was also a disappointment.
Q: What are the biggest barriers that remain?
A: The key to a successful Doha Round remains finding a way to break the impasse on agriculture. That depends primarily on EU negotiators coming forward with a better offer on market access. But it will also require US negotiators to improve their offers on domestic subsidies and food aid, as well as significant concessions on market access from Japan, Korea, and other Europeans. If that hurdle can be overcome, final agreement will still be contingent on meaningful offers on non-agricultural market access and services liberalization by the more advanced developing countries, led by Brazil and India.
Q: Is there still time to make the Doha Round successful?
A: There is still time but it is fast running out. President Bush's trade promotion authority, which allows the administration to negotiate trade agreements that Congress cannot amend, expires in mid-2007 and Congress must be notified of agreements at least 90 days before that deadline. The president can submit an agreement without this authority, but Congress can then amend it, which would risk unraveling the agreement. This authority was approved by only a 3-vote margin in the House of Representatives in 2002 and there is no guarantee that Congress would agree to an extension if the Doha Round is not concluded by the end of next year.
