By Daisy Ayliffe - 19th December 2005
WTO members reached a compromise deal on Sunday – averting crisis but postponing the most difficult problems until next year.
The draft declaration was approved reluctantly apporved by the EU after talks failed to bridge wide gaps between key players.
The deal includes a scrapping of farm export subsidies by 2013, offers to help the poorest countries and support for African producers.
Agreeing on a proposed date for scrapping farm export subsidies in industrialized nations had been one of the most contentious issues before the ministers.
An EU-US dispute on the date had threatened the outcome of the Hong Kong gathering, with Brussels initially resisting the mention of a precise year despite heavy pressure.
EU Trade Commissioner Peter Mandelson has stressed that eliminating farm export subsidies was conditional on steps by other countries to remove trade-distorting practices.
Developing countries put pressure on export subsidies and an aid deal – and the compromise was only struck after it won the support of a group of developing countries led by Brazil and India.
Washington said it feared a final deal would prove elusive unless there is more movement in the next few months.
“On the toughest issues [Hong Kong] simply kicks the can down the road,” Charles Grassley, chairman of the US senate finance committee said.
Although ministers patched up some differences no one moved from long-held negotiating positions and the final declaration provides guidelines for the next stage.
Trade deal 'on track'
But the WTO chief put a more positive spin on the outcome.
“We have managed to put the Doha round back on track,” WTO director general Pascal Lamy declared.
He insisted the talks were now 60 per cent of the way to their conclusion and expressed confidence about their prospects.
The revised agreement sets April 30 2006, as a new deadline for details to be worked out, to ensure that a global trade treaty is finalised by the end of next year.
Farm aid
Lamy says in the draft that "the reality is that we have yet to find that last bridge to agreement" on farm aid that will pave the way for a broad accord next year.
"But it would be a grave error, in my view, to imagine that we can take much time to find that bridge," he adds.
West African cotton-producing countries were pleased that the text retained an earlier proposal that rich countries eliminate all export subsidies on cotton in 2006.
US Trade Representative Rob Portman said the proposal would be difficult to sell to US politicians.
But cotton growers in Chad, Burkina Faso, Mali and Benin say the US farm aid drives down prices, making it impossible for small family farms to compete in international markets.
Portman said that while he had some concerns about the WTO's final draft agreement, he hoped that the delegates could come up with an acceptable version.
"Some members have concerns as we do but in the end there is an overriding need to come together and work out our differences so I'm hopeful we can do that," Portman said in remarks to reporters.
Mixed reviews
"From going round and round the roundabout, we are now heading in the right direction," Indian Commerce Minister Kamal Nath said of the document.
"At least we are moving. We need to pick up momentum in the next few months."
Mandelson concluded that the draft text was 'acceptable' to Europe.
"Today, Europe has gone further on its existing commitment by setting a clear date, 2013, for the elimination of export subsidies," the EU's trade chief told reporters.
"We have demanded and received equivalent movement from the other countries. While the outcome of Hong Kong is not a great success, this move of ours is enough to save it from failure. Europe has shown leadership when others were unable or unwilling to do it."
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