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Being realistic over Hong Kong

The second draft text for the forthcoming ministerial meet of the World Trade Organisation at Hong Kong might be an improvement over the first but the generally lukewarm response to both conveys a significant message. Given the fact that the rather high expectations of just four months ago had since been considerably toned down, the drafts reflect the new realism among the 148 member countries. Going by the track record of these multilateral negotiations, the expectation that the sixth meet would be able to complete two thirds of the Doha round agenda sounded overoptimistic. The drafts for the ministerial meet recognise the major obstacles the several pre-Hong Kong meetings of trade ministers have failed to overcome. Sharp differences over agricultural trade issues have continued to be the biggest stumbling block. Inevitably, the lack of progress on the farm front has spilled over to the other two contentious areas of non-agricultural market access (NAMA) and to services. Even the second draft does not indicate any time frame for finalising the modalities. Just three weeks ago, the WTO Secretary-General, who in September expected a significant breakthrough at Hong Kong, spoke of "recalibrating expectations."

Clearly, what could be achieved at the ministerial meet was overestimated. The four-year-old Doha round would have gathered substantial momentum if in the run up to the Hong Kong meet there had been wide agreement on reaching "full modalities" in agriculture, and NAMA and on drawing a roadmap for finalising services negotiations next year. Yet despite the subdued expectations, some experts have voiced the opinion that there is hope for the Doha round to be clinched. In a recent article, Jagdish Bhagwati has pointed out "that the history of the Doha round so far is more encouraging than is conventionally believed." Despite their aggravated differences after the Cancun round, all 148 countries are back at the negotiating table. Many contentious issues, such as the Singapore issues first proposed at a ministerial meet in 1996, have been watered down. The TRIPS agreement is no longer regarded as a major impediment. Even the seemingly intractable differences between the European Union and the United States, on the one hand, and developing countries such as India and Brazil, on the other, over key areas such as agriculture access and trade distorting subsidies can be narrowed down. It will help the negotiators if, for instance, greater clarity is imparted in quantifying the subsidies the EU is paying its farmers. At this stage it looks as though the Hong Kong meet will not be able to deliver on its earlier promises but can nevertheless be a stepping stone to the Doha round's eventual success.

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