Developing nations on attack at tense trade talks

By Sophie Walker and Richard Waddington

HONG KONG (Reuters) – Developing nations went on the
offensive on Thursday as trade talks limped into their third
day, with Washington and Tokyo under pressure to accept a
duty-free, quota-free exports deal for the world’s poorest
countries.

The World Bank added its voice to the indignation expressed
by the least developed countries over their treatment at the
World Trade Organization (WTO) meeting in Hong Kong, saying
there had been much talk about development but too little
action.

“The major trading economies of the developed world are
keeping the big issues off the table, and as long as that
happens, the poor will suffer,” World Bank Vice President Danny
Leipziger said in a statement.

South Korean anti-globalization protesters, who clashed
with police during the first two days of the conference, were
expected to try again on Thursday to reach the venue of the
convention center on the waterfront of Hong Kong’s scenic
harbor.

A group of about 200 fishermen from Thailand, the
Philippines, Cambodia, Vietnam and Malaysia marched from a
local park aiming to hand in a petition letter to the WTO
urging it to suspend talks on fishing issues, but they were
halted by police.

Riot police have successfully used pepper spray and batons
to beat Korean protesters back but they expect more intense
confrontations before the meeting closes on Sunday.

So far there has been no repeat of the rampant violence
that marred a 2003 WTO meeting in Cancun, Mexico, where talks
on a deal to reform world trade and lift millions out of
poverty almost collapsed.

The Hong Kong meeting was initially intended to approve a
draft trade treaty freeing up business in farm and industrial
goods and services, known in the jargon as the Doha round.

That plan was abandoned because of differences between rich
and poor nations — particularly the European Union’s refusal
to make further cuts in import tariffs for farm goods without
offers of greater export access for its goods and services —
though the 149 WTO nations still hope to reach a deal by the
end of 2006.

TIME FOR ACTION

Saddled with that impasse, the WTO had hoped to come away
from Hong Kong with at least a duty-free and quota-free deal
for the world’s 49 poorest nations and their 700 million
people.

But the United States has balked at allowing poor exporters
free access to sensitive areas such as textiles, sugar and
cotton, and Japan does not want to open up its rice market.

They also want to be able to revoke preferential access for
least developed countries’ imports that exceed a certain share
in their markets, and Washington wants to delay implementation
of the deal until the overall Doha round package comes into
effect.

“It is now time to put … promises into action,”
Bangladesh Commerce Minister Altaf Chowdhury told the meeting.
“We expect the developed countries that have not already done
so to announce in Hong Kong a timetable for the introduction of
such market access.”

Zambian Trade Minister Dipak Patel, who is also coordinator
of the WTO’s poorest member states, slammed the United States
and Japan for seeking exemptions to protect their own
industries.

“Developing countries, forced to liberalize by developed
countries, have always been told that liberalization will
deliver gains … It is not too late for developed countries to
swallow their own medicine,” he said in a statement.

Another source of friction in Hong Kong was the EU’s
refusal to endorse a 2010 date for ending agricultural export
subsidies.

The 25-nation EU says Washington must first indicate how it
plans to reform its food aid, which — because it is in kind
rather than cash — the bloc says amounts to as great a subsidy
for U.S. farmers as European export subsidies.

British relief agency Oxfam rallied behind that stand,
saying aid in kind causes unnecessary delay and can hurt the
very people food aid is designed to help, but at the same time
said the EU should not use food aid as an excuse to keep export
subsidies.

Oxfam’s Phil Bloomer said in a statement that wrangling
over U.S. cotton subsidies had the potential to bring the Hong
Kong talks “to their knees” as it did in Cancun in 2003.

The United States parried pressure from African countries
to end subsidies, which they say are devastating their
economies, by putting the onus back on the EU.

U.S. Trade Representative Rob Portman said that if the EU
agreed to greater market access for imports of farm goods that
would give Washington the basis it needs to end cotton
subsidies.

“For those who are blocking progress on the agriculture
negotiations: if you really want to help, come up with
proposals in market access,” he said.

But sources said Benin’s representatives were unimpressed,
and walked out of talks on cotton with the United States.

(Additional reporting by William Schomberg and Doug Palmer)