CHOGM may still influence world trade meeting

While CHOGM leaders have toiled to produce a strong statement on world trade in their declaration emerging today, EU Trade Commissioner Peter Mandelson has warned that the forthcoming 149-nation World Trade Organisation ministerial meeting in Hong Kong (December 13-18) will not make much headway.

In striking contrast to the Commonwealth Secretary-General Don McKinnon's urgings here that ambitious goals for the ongoing Doha Development Agenda round of trade negotiations launched in 2001 must not be abandoned, Mr Mandelson stated on Friday that "the current impasse raises the clear question of what can be achieved at Hong Kong. To raise expectations now is to invite failure." However, he added that "Hong Kong must still make progress for the round to end as scheduled at the end of 2006 or early 2007."

As Dr Gonzi presents the CHOGM declaration to the media this afternoon, senior trade officials meeting informally in Geneva are set to discuss a draft ministerial text for Hong Kong submitted yesterday by WTO director-general Pascal Lamy, which lists agreements and divergences, but does not suggest any compromises.

How and whether the CHOGM text on trade can impact today's discussions in Geneva is unclear. However, Commonwealth countries will have the opportunity to push the CHOGM line at Wednesday's meeting of the WTO Trade Negotiations Committee and at its Council on Thursday and Friday.

With Hong Kong no longer expected to produce a roadmap for concluding the negotiations before the US government's negotiating mandate expires in 2007 - a further WTO ministerial meeting is already being planned for next March, Geneva diplomatic sources told The Sunday Times. These three months would then offer further scope for the Commonwealth to further promote its views.

Due to difficulties in the trade talks, Commissioner Mandelson cancelled his keynote speech to the Commonwealth Business Forum in St Julian's last week. The forum's final communiqué and report forwarded to CHOGM showed strong business support for world trade liberalisation, but also mooted a possible 'Commonwealth free trade area' should the Doha Round fail.

In an exclusive e-mail interview with The Sunday Times highlighting key points of his cancelled presentation, Mr Mandelson stated: "I am determined to help bring about that first pillar of our Lisbon strategy by creating more open markets in Europe. We still must seek to eliminate or reduce our own trade barriers in the context of a successful outcome to the Doha round. Market opening in Europe will lower the cost of inputs, thus our industry's costs of production, while more open EU borders will increase competitive pressures leading to more innovation, better exploitation of comparative advantages, and specialisation. European consumers will also benefit from higher quality, broader choice and better prices."

Mr Mandelson also emphasised the need to boost trade opportunities for European business in foreign markets, in particular by improving access for European service providers - "a sector so important for Malta".

"The EU supports a 'development package' providing net benefits to the poorest countries. More and freer trade is also compatible with providing new opportunities to producers in poor countries," he concluded, "helping them to grow and to reduce poverty. Through the newly established online EU Export Helpdesk for Developing Countries, €1 billion will be allocated annually over the next four years for trade-related infrastructure and training, thus facilitating exports by developing countries. However, more trade is only part of the solution - countries must also implement the internal reforms to distribute the benefits of globalisation."

Obtaining sweeping concessions from developing countries on industrial goods and services as well as the opening up of natural resources exploitation is the high price tag on the EU's recent willingness to offer improved market access to developing countries' agricultural goods and reduce its own high export subsidies to its own products.

Mr Mandelson's calls for a 'balance' of concessions has attracted fierce criticism from many developing countries, who see this as contrary to the Doha Round's 2001 goals to offer them 'special and differential treatment'. There are deep fears that whole sectors of their industries and services, and thus millions of jobs, would be swept away if they are no longer protected them from developed countries' competition by import duties and other restrictions.

There is also enduring resentment, highlighted this week by Mr McKinnon, at the developed countries' failure to deliver on many of the commitments benefiting developing countries made under the previous Uruguay Round which ended in 1993.

A further complication in the current talks is the wide disparity between levels of development of developing countries and thus their implicitly conflicting aspirations within WTO.

Increasingly vocal civil society campaigns such as Trade Justice are challenging the WTO's (and developed countries') dominant doctrine on ever-increasing trade liberalisation and market access. These groups urge the concept of 'fair trade' which would protect livelihoods, the environment, food security and subsistence agriculture and traditional job-creating economic activities in developing countries.

Such concerns are partly reflected in Commonwealth People's Forum final declaration, discussed yesterday at an innovative round table between CHOGM foreign ministers and Forum representatives. A coalition of European NGOs recently denounced Mr Mandelson as pushing 'the European corporate agenda', at the expense of developing countries' sustainable development prospects.

Free trade doubters are finding support in the World Bank's most recent forecasts on trade liberalisation impacts. According to forecasts two years ago, it would have added $800 billion to the world economy, with $539 billion accruing to developing countries, lifting some 127 million people out of under $2 a day poverty. The new forecasts, factoring in China's new WTO membership, EU enlargement, and other developments, indicate a $287 million gain, with $86 billion for developing countries and 66 million poor benefiting.

However, according to US economist Tim Wise of Tufts University, USA, under the Bank's 'likely Doha outcome', 70 per cent of gains will go to developed countries while only eight developing countries - including Brazil, Argentina, China and India - would get half of all developing country benefits. Under the same scenario, only six million people would be lifted out of the $2 a day poverty level - shared by over three billion people."