Interim farm deal saves world trade talks

By John Chalmers and Kim Coghill

HONG KONG (Reuters) – Ministers from 149 states saved
long-running global trade talks from collapse on Sunday with an
interim deal to end farm export subsidies by 2013 and open rich
country markets a bit wider to the poorest nations.

Ministers expressed relief they had averted a repeat of
failed World Trade Organization (WTO) conferences in Seattle in
1999 and in Cancun in 2003.

But they described the Hong Kong pact as disappointing and
said it would be tough to wrap up the four-year-old talks by
the end of 2006, after which U.S. President George W. Bush may
lose his Congressional authority to negotiate trade deals.

In an apparent reference to the EU’s refusal to open its
long-protected agricultural markets any further, U.S. Trade
Representative Rob Portman said a breakthrough in cutting farm
tariffs was badly needed to reach a deal by the end of 2006.

“Without that we won’t be able to see the whole round come
together,” Portman told Reuters in an interview.

European Union Trade Commissioner Peter Mandelson said: “In
a week of disappointments, (the Hong Kong pact) is no small
prize. It is not enough to make this meeting a true success.
But it is enough to save it from failure.”

The agreement was struck after six round-the-clock days of
fractious talks between ministers and a string of
anti-globalization protests that erupted into vicious street
battles outside their harbor-side convention center.

WTO Director-General Pascal Lamy told the weary ministers
they had injected new impetus into the Doha round, a so-far
hapless drive to boost global economic growth and lift millions
out of poverty by bringing down barriers to trade.

“What you all take back from Hong Kong is a new political
energy, a potent fuel to reach cruising speed during 2006,” he
said. “Seattle was about shrinking the WTO. Cancun was about
sinking the WTO. Hong Kong was about rethinking the WTO.”

COMPROMISES

The agreement, a series of compromises, fell well short of
more ambitious plans the WTO originally had for Hong Kong.

It proposed April 30, 2006, as a deadline for reaching a
draft for the Doha round, a milestone the organization had
originally hoped to reach in Hong Kong.

But Lamy said the “modest” package of market-opening steps
agreed on Sunday meant negotiators had at least taken the round
from 55 percent of the way to completion to 60 percent.

Big-hitters among developing nations, led by Brazil and
India, gave their nod to the draft but voiced frustration over
the EU’s refusal to agree on 2010 as a cut-off date for export
subsidies.

The agreement will bring the elimination of export
subsidies for cotton in 2006. Washington also proposed
quickening the pace at which it dismantles subsidies enjoyed by
U.S. cotton producers that African nations say are ruining
their economies.

The accord fell short of U.S. and European hopes for
greater access to poor nations’ markets for manufactured goods.

But developing nations felt they were the ones
short-changed.

“There is a general feeling of frustration and
dissatisfaction, not to mention discontent,” said Mauritian
Trade Minister Madan Murlidhar Dulloo.

Non-governmental organizations also branded the Hong Kong
talks another victory for protectionist wealthy nations.

“This is a profoundly disappointing text and a betrayal of
development promises by rich countries whose interests have
prevailed yet again,” relief agency Oxfam said in a statement.

One key element of Sunday’s deal — duty-free and
quota-free access for imports from the 49 poorest nations of
the world — was watered down because of U.S. and Japanese
reluctance to accept unbridled trade in goods such as textiles
and rice.

“It’s a shame the richest countries in the WTO outside
Europe could not go the extra mile for the world’s poorest
countries,” Mandelson said of the compromise, under which 3
percent — or 250-300 tariff lines — would be exempted.

The sigh of relief inside the conference center was echoed
on the streets of Hong Kong as thousands of demonstrators
marched peacefully to protest against the world trade talks.

The mostly good-natured demonstration was in stark contrast
to Saturday’s pitched battles between protesters and riot
police, the worst street violence in the city in decades.

“It is a pact that remains in favor of the farm export
policies of the rich countries and big emerging countries …
and does little for the majority of farmers,” said French
farmer and prominent anti-globalization campaigner Jose Bove.

(Additional reporting by Richard Waddington, Doug Palmer,
William Schomberg, Sophie Walker, John Ruwitch and Tan Ee Lyn)