Four years after the Doha Round was launched and well past the deadline set for its completion, some problems related to agriculture, services, and trade facilitations are still daunting. Under pressure, the WTO Director General urged the December Hong Kong Ministerial Meeting to be not just another checkpoint in the negotiations, but also the last and best chance to move this Round to a successful conclusion by the end of 2006 (WTO, 2005).

After six days (13 – 18 December 2005) of intensive negotiations, Ministers from the WTO's 149 member governments approved a declaration that many described as a significant progress since the July 2004 “package”. With this achievement, the Round is now backing on track after a period of uncertainties. Lammy (2005) stated “we have built the political energy necessary to advance technically during 2006 and now have enough fuel in the tank to cruise at the right negotiating altitude”.

Regarding the main issues before the meeting, basically five main achievements/agreements were reached in this meeting, namely (i) an end date for all export subsidies in agriculture; (ii) an agreement on cotton; (iii) a very solid duty-free, quota-free access for the 32 least-developed country members; (iv) a significant framework for full modalities in agriculture and NAMA (non-agricultural market access); and (v) agreement in services.

Among these agreements, the first three can be expected to have a positive impact on poverty alleviation and Green (2005) classified as “least worst” part of the whole results. The agreement to end export subsidies in agriculture by 2013, only agreed at the last minute. The elimination of export subsidy has been one of most critical problem, mostly opposed by developed countries, mainly the European Union. High subsidies in developed countries, amounting to US$ 318 billion per year (World Bank, 2003), have caused an unfair playing ground for most developing countries (Abbot, 2003; Madeley 2004; Twyford, 2003). With this result, many delegations welcomed the agreement on 2013 as deadline for eliminating of agriculture export subsidies although most of them said they would have preferred an earlier date.

Elimination of export subsidy will give a better trade environment for developing countries to expand their agricultural sector, including some Asia and The Pacific counties. As stated by Rahman (2004) growth in agriculture is an essential factor for poverty reduction since every dollar spent on agriculture, another two dollars is generated for a developing country's national economy. Furthermore, history has demonstrated that agricultural development can generate increased incomes, which lead to savings and investments, and finally to reduce poverty. A study by ILO (2005) indicated that in Asia , a one per cent increase in agricultural output was associated with an almost 0.6 per cent decrease in poverty in the 1970s and slightly over 0.1 per cent in the 1980s.

For cotton, the elimination of export subsidy is accelerated to the end of 2006. In addition, cotton exports from least-developed countries will be allowed into developed countries without duty or quotas from the start of the period for implementing the new agriculture agreement. Moreover, it was also agreed to cut trade-distorting domestic subsidies on cotton by more than would normally apply under the new agreement, and to do so more quickly (WTO, 2005). This will create a better trade environment for cotton producing countries, mainly African Counties (Green, 2005).

Agreement on a very solid duty-free and quota-free access for the 32 least-developed country (LDC) members again indicates the heart of the negotiation in benefiting the LDCs. This agreement will give a wider and direct market access of the products of LDCs in entering developed country markets. This could be an effective avenue to reduce poverty in rural areas since around 2.5 billion people in the developing world depend on agriculture for their livelihoods and i n most poor countries, agriculture is still the largest employer, job creator and export earner (Green, 2005; FAO, 2005).

Although the commitments indicates good signs toward poverty alleviation in developing countries and LDCs, we should not expect that this can be automatically realized. The long history of trade negotiations has given lessons to us that there are at least two main obstacles to make it on the ground. Firstly, when the general platforms and political commitments have been agreed, there are always long discussions and debates to translate into real policies or actions. In other words, it is easy to achieve a common/general agreements but not in the details. Secondly, almost all countries, especially developed countries, have had some maneuvers to minimize the negative impacts of agreements on their protected sector (agriculture). They looks to sacrifice some of their interests, but using other rules under WTO umbrella, they will try to compensate their loses. For example, they can eliminate their export subsidies, but at the same time, they can increase their domestic support in terms off green box, because of no limit for subsidy under green box (Green, 2005). Similarly, they can hide the export subsidy under a form of subsidies in credit, food aid and the sales of exporting state enterprises (WTO, 2005).

To conclude, the Hong Kong Ministerial Meeting came with some positive results in the development issues for the poor, particularly in the elimination of export subsidy, cotton issues and the package for least-developed countries. Some believe that these results have been a rebalancing in favor of developing countries. The tasks now are how to translate these political commitments to the policy instruments and actions that are really benefiting the poor.

Written by Wayan R. Susila, Staff, UNESCAP-CAPSA, Bogor , Indonesia

References

Abbott, K. W. 2003. Development Policy in the New Millennium and the Doha Development Round, Asian Development Bank, Publication Stock No. 061503.

FAO, 2005. Understanding Food Insecurity, 8 December 2004, http://www.fao.org/newsroom.

ILO, 2005. World Employment Report 2004-2005: Employment, Productivity, and Poverty Reduction, International Labour Organization.

Madeley, J. 2004 . Trading off the poor, People & the Planet 2000 – 2004 , http://www.peopleandplanet.net/doc.php?id=1525&section=16

Lamy, P. 2005. Hong Kong Ministerial is Last and Best Chance to Conclude The Round by Next Year, WTO NEWS: SPEECHES, 24 September 2005, http://www.wto.org/english/news

Green, D. 2005. What Happened in Hong Kong ? Oxfam Briefing Paper, Oxfam International, December 2005, http://www.oxfam.org/en/programs/campaigns

Rahman , A. 2004. Rural Development is Key to Tackling Global Poverty - a View from IFAD, Habitat Debate, Opinion, http://www.unhabitat.org/hd/hdv10n3/

Twyford, P. 2003. Does trade liberalization exacerbate or reduce poverty? Trade and globalisation in the lead up to the Cancun Ministerial, Oxfam International , address to the Council for International Development Trade Forum, 21 February 2003.

WTO, 2005. Day 6: Ministers Agree on Declaration that ‘Puts Round Back on Track', Summary Of 18 December , http://www.wto.org/english/thewto_e/minist_e/