Time running out for global trade deal

2005-11-07 From Yoo Soh-jung

Developments in global trade talks in the next one to two weeks are crucial for successfully finalizing a trade deal in Hong Kong next month, but experts here say the prospects look dim.

"Member countries have sped up negotiations to reach a consensus, but I'm a bit skeptical about whether there will be significant developments in the next week or two," said Lee Chung-won, senior deputy director of the Agriculture Ministry's Multilateral Agricultural Negotiation Division.

"But every World Trade Organization member feels pressured to reach a deal at the next ministerial meeting."

The delay is blamed on the failure to agree on a set of trade guidelines in the area of agriculture. Experts say the European Union's resistance to agreeing to reduce farm subsidies tariffs would obstruct efforts to conclude a world trade deal during the Hong Kong meeting scheduled from Dec 13 to 18.

The EU is being pressured to make further concessions on farm subsidies. U.S. Trade Representative Robert Portman has been reported as saying that "the responsibility at this point rests squarely with the EU."

Australian Trade Minister Mark Vaile also agreed recently, saying that the EU's failure to make a "meaningful proposal on access to European markets had brought the Doha round to the brink of collapse."

The EU, comprised of 25 member states, plays a major role in the WTO and is considered one of the "driving forces" behind the multilateral trade talks in the Doha Development Agenda.

The DDA round of trade negotiations was introduced during the WTO's fourth bi-annual ministerial conference in Doha, Qatar in November 2001. The objectives are further trade liberalization and making new rules with the aims of increasing assistance to developing countries and combat poverty. The ensuing ministerial meeting in September 2003 in Cancun, Mexico also failed, as WTO members could not agree on agriculture and non-agriculture market access.

Korea, which like the EU has importing-nation status in the area of agriculture, is also reticent about cutting tariffs and domestic support. Korea is represented under the group of 10 nations in the area of agriculture importers, which includes Japan, Norway and Switzerland. The G-10 wants the tariff ceiling at a minimum and as many import waivers as possible.

"We just want more time to help our agriculture industry adapt to the opening of our market," said Seo Hae-dong, director of the Agriculture Ministry's Multilateral Agricultural Negotiation Division.

"But the G-10's voice is comparatively weak, and we're being driven to the corner by the other bigger negotiating groups."

They are the United States and groups made up of developing countries like the G-20.

Brazil, India, China, Argentina and 16 other developing nations joined to form the group of 20 nations at a failed WTO meeting in Cancun, where they urged rich nations like the United States to cut farm subsidies.

Seo said that the clashing needs among the 148 WTO members are making the DDA difficult, while the strong voice of the EU is obstructing the process for reaching a consensus. Even within the EU, member-states are struggling for unison.

France, for instance, says the European Commission, which speaks for the EU at WTO meetings, is being too generous on agriculture concessions. France is the biggest recipient of EU agricultural subsidies.

Meanwhile, exporting countries, such as the United States, Brazil, New Zealand and Australia, want more market access.

Seo also stressed that the next week or two is most important in the DDA negotiations. The official finds it difficult to predict the outcome. He said the talks could either come to a sudden breakthrough or break down. A less dramatic scenario would be that the negotiators may lower their expectations for the Hong Kong meeting.

Some experts are hoping that the summit of Asia-Pacific Economic Cooperation leaders this month may help achieve a breakthrough. Free trade is high on the APEC agenda and the 21 member economies are expected to support the timely conclusion of the DDA negotiations. APEC members account for 46 percent of world trade.

But Lee Chung-won from the Agriculture Ministry is doubtful.

"We need to see progress first in Geneva if we want to pin any hopes on APEC," he said. He stressed that some APEC members also part of the WTO have too many issues to work out in Geneva. Major WTO negotiations are held at the global body's Geneva headquarters.

Experts from trade agencies like the Korea International Trade Association say that it's in the economy's best interest to salvage the global trade talks.

"Korea is an exporting nation; we depend on exports to drive and expand our economy," said Kim Moo-han, a director at the trade agency's international policy division. "We have to be able to export a lot to improve our economy, so we shouldn't hold up the WTO negotiations because of agriculture."

In addition to agriculture, members of the trade body need to agree on issues like removing barriers for manufactured goods, services and intellectual property rights.