WTO Draft Hong Kong Text Issued

The WTO’s Director General, Pascal Lamy, and Chairperson of the General Council, Ambassador Amina Mohamed of Kenya, released their proposal for a draft Hong Kong Ministerial Text on Saturday 26 November 2005. Although the text is technically a joint effort by the Chair and the Director General, the document is clearly a secretariat text and has already been dubbed ‘The Lamy Text’. This follows a week of individual reporting by the Chairs of the various subsidiary negotiating groups, including a report by the Chair of the Special Session of the Committee on Agriculture on 22 November 2005. This was followed by an in depth discussion of the text by the Membership in Geneva over the weekend.
Last week the Agriculture Chairman, Ambassador Crawford Falconer of New Zealand, expressed a frustrated tone when issuing his agriculture negotiations status report, as the text is mundane and does not substantially contribute anything that has not been seen before. He noted that the text was issued under his own responsibility and that he was disappointed that he could not issue a modalities document – i.e. a facts and figures proposal. It seems that he was severely limited in ambition on the direct instruction of some elements of the Membership.
On issuing the draft ministerial text DG Pascal Lamy indicated that Members ‘would all have liked to see a more operational text by now, but this is where we are. The current draft does not seek to establish a final balance here and now, that is for the end of the round, which is not where we are now.’
The Chair’s text offers no prescription for cutting tariffs and subsidies on either, agriculture or manufactured goods, the two main areas that have held up negotiations to date. Instead, the relevant sections of the draft provide information on the range of outstanding issues, point to the significant amount of work which has already been done and makes a genuine reflection of where the gaps are by reflecting ranges and placing some text in square brackets. A number of delegations have conceded that progress is needed in these two difficult sectors ahead of, as opposed to at, Hong Kong.
The Lamy text leaves any observer that may still have been in doubt, with an unambiguous statement that agriculture and the Cotton Initiative lead the negotiating mandate. In the preambular text agriculture is mentioned first and cotton is mentioned second in the progression of subject matter comments. The two topics are then further dealt with in the first annex, dealing with agriculture Annex A, to the draft declaration. The text confesses that ‘much remains to be done in order to establish modalities and to conclude the negotiations’.

The agriculture text is indicating that the negotiators have to once again assign deadlines to the negotiation process, firstly by setting a deadline for defining modalities and secondly for setting a deadline for converting the modalities into schedules of commitments for individual countries. The cotton wording places the trade component before the aid component. It commences by reiterating the mandate of the July Package and pertinently refers to the wording ”ambitiously, expeditiously and specifically’. It is notable that the text speaks of a ‘prioritization’ of cotton leading to the establishment of modalities for cotton. The cotton aid wording is general, but caters adequately for all present donor initiatives, while not providing for any binding commitments to aid for cotton.
With reference to the texts in general; although the documents are neutral and non prescriptive, they remain sufficiently useful in serving to orientate the cotton discussion leading to Hong Kong. It is most likely that the breakthrough juncture still lies with the EU on market access tariffs; and that they will likely save any further move on this until the Hong Kong meeting. Market access remains the main hurdle. Falconer, reiterated by Lamy, highlights that there is a wide gap in proposals as to what the cut should be on the highest duties and that some proposals still have as many as 15% of tariff lines (a massive 300+ products) being guarded from reform as being ‘special products’. Unless the present gulf in opinion is bridged in Hong Kong, it will more than likely not be possible to reach any meaningful roadmap for the crystallization of an early 2006 overall deal.

At the present juncture it is critical for the developing country contingent to ensure that the present momentum that they have been able to garner on trade and development (as reflected in the Chair’s Text) is fuelled by a continued visibility of their positions by a lobbying effort in converting potential allies to this cause in the final run-up to the Hong Kong Ministerial Conference. Vigilance is called for in the week ahead as the WTO General Council is set to meet from Thursday 1 December 2005 to Saturday 3 December 2005. Any refinements or amendments to the Lamy text will be confirmed at this session after which the amended text will serve as the final draft document to serve as the basis for the trade ministers in Hong Kong from 13-18 December 2005.