Hong Kong 13-18 Dec. 2005

The Sixth WTO Ministerial Conference  
Hong Kong, China, 13 to 18 December 2005.

SUMMARY OF 15 DECEMBER 2005

Day 3: Tonga all set to join, as movement seen in talks on least-developed countries
 

Tonga’s membership agreement signed 
Ministerial Conference plenary, 6 pm, and signing, 8.15 pm

The Hong Kong Ministerial Conference approved Tonga’s accession agreement on 15 December, paving the way for the South Pacific island nation to join the WTO. Tonga will now ratify the agreement and will become a full member 30 days after it has informed the WTO that it has ratified. It has agreed to do this by 31 July 2006.

At a signing ceremony afterwards, WTO Director-General Pascal Lamy observed that Tonga will become the WTO’s 150th member. “Unfortunately we don’t have special prizes for that,” he joked.

“Four weeks ago, we welcomed another kingdom into the WTO family. Not too many families welcome two members in one month!” he said.

Tonga’s Labour, Commerce and Industries Minister Feleti Sevele described his country’s “long course” of membership negotiations that began in June 1995. “We believe, despite what some NGOs have said, we will be grateful for many years to come with this decision,” he said.

Not being a WTO member is “simply not an option,” he went on. “Reform is an ongoing process, and it’s something that has not been extracted from us, but part of a long-term process.”

Paying tribute to countries and organizations that helped with the negotiations, Minister Sevele said: “At the end of the day, we have to weigh the pros and cons of WTO membership. We believe this is the right decision to take as a member of the world community. We will continue our efforts to be a good citizen of the world. We will, of course, ratify in due course.”

Tonga is the fourth Pacific Island state to join, after Fiji, Papua New Guinea and Solomon Islands.

Heads of delegations 
Informal meeting 5 pm

As usual the purpose of this heads of delegations meeting was to share information. Chairperson Tsang told the ministers that there were signs of progress here and there, particularly on issues concerning Least Developed Countries. But he said members remain far from agreeing on outcomes in a number of difficult issues.

Chairperson Tsang told the meeting that another minister, Foreign Minister Walker of Chile has started working as his “facilitator”, coordinating discussions on specific subjects. The full list is now:

• Non-agricultural market access — Commerce Minister Humayun Khan of Pakistan
• Agriculture — Trade and Industry Minister Mukhisa Kituyi of Kenya
• Development issues — Foreign Trade and International Cooperation Minister Clement Rohee of Guyana

Three more are facilitators-at-large, who could assist as necessary on services, rules and other issues:

• Trade Minister Hyun Chong Kim of Korea (now working on services);
• Foreign Minister Jonas Støre of Norway; and
• Foreign Minister Ignacio Walker of Chile (now working on implementation and other issues, and bananas).

Chairperson Tsang said members needed to begin developing texts that would lead to solutions that members could adopt and which would permit the Chairman and the Director-General to circulate an improved Draft Ministerial Text.

Reminding ministers to keep the task in perspective, he stressed that the Hong Kong Ministerial Conference is neither launching nor concluding a round. Instead it is an opportunity to take the Doha round a step further towards conclusion, he said.

Members will, he said, need to work with a much greater sense of urgency over the next two days and he asked his facilitators to intensify their work over the course of the day and to focus on developing compromise texts.

Five “facilitators” reported on their consultations:

Agriculture. Minister Kituyi said he had met a number of delegations over the course of the last day, the latest being the recently acceded members and China. He urged delegations interested in submitting inputs to his text to get in touch with him.

Specific development issues. Minister Rohee began by reassuring members that he fully recognized that the development package was not limited solely to the question of duty-free quota-free market access for least-developed countries (LDC) or to the other LDC issues alone. He pointed out that he had prioritised his discussions on this issue and that very soon he would take up other development issues.

On the issue of duty-free quota-free market access for least-developed countries, he underscored the following points:

• least-developed countries want a predictable and secure commitment to provide them with duty-free, quota-free market access, and that they wanted members to go beyond the commitments taken at Doha, Minister Rohee reported.
• He said most members were positive about providing this preferential access and that they were considering how to provide the access securely and predictably, including by legally binding.
• But he said that members generally felt that “binding” in the classic legal sense was not practical. Instead, they were considering other options, including using the phrase “on a lasting basis”, which was attracting broad convergence.
• Another question is whether duty-free, quota-free market access would apply to all least-developed countries. While some countries have a problem with this idea, he said that in an endeavour to move the process forward, members have proven willing to accept a reference in the text to “all LDCs,” he said.
• The third issue before members on this topic related to product coverage, he went on. LDCs insist that all their export products included but that some members said they could not accept duty-free, quota-free market access for all products.
• As a possible compromise he is exploring the possibility of using the text that currently appears in the draft. This text allows members with difficulty on this point to start by providing duty-free, quota-free market access for a specified percentage of products (tariff lines) by a given year. They would then increase this percentage progressively. Minister Rohee said he hoped to build convergence around this approach.
• Developing countries say they would like to participate but would need flexibility in applying it, he reported.

Services. Minister Kim said the starting point for his consultations was the part on services in the draft ministerial text. Many delegations considered that this offers a sound basis for the way forward; others wanted the text strengthened, a third group felt that the text was too prescriptive and not in line with the General Agreement on Trade in Services and the Doha negotiating mandate.

Concerns focused on provisions in the text dealing with qualitative objectives, sectoral objectives and references to plurilateral “request-offer” negotiations, Minister Kim said.

He said he would be conducting further consultations in an effort to narrow divergences. Later on, Malawi on behalf of the G-90, said they would be meeting with Minister Kim later this evening to present him with the G-90 version of the text.

Non-agricultural market access. Minister Khan expressed concern that delegations have remained increasingly entrenched in the positions they had adopted in Geneva. They are not flexible enough to turn this Ministerial Conference into a success story, he said, cautioning that there may be a risk of some backsliding on this issue.

In his report to delegations, said Minister Khan had met intensively with delegations either separately or in groups. He said he did not see much progress towards consensus on amendments to the ministerial draft. He said that while there was broad support for using a Swiss formula (a mathematical formula for cutting tariffs that results in steep cuts on high tariffs) with two coefficients (the numbers in the Swiss formula that determine how steep the cuts are and set ceilings on the final tariffs). He said that several developed countries who had been indicating in Geneva that they preferred a formula with a single coefficient have now given clear support to this dual-coefficient approach.

In addition, he went on, a group of developing countries which insists on linking tariff reductions in agriculture and non-agricultural market access — so that cuts made by developing countries on non-agricultural products are related to the cuts made by developed countries in agriculture.

The group also wants flexibilities to be independent from the formula, he reported. And differences also remain on the question of unbound tariffs, the erosion of tariff preferences and a sectoral component to the NAMA negotiations (such as having totally free trade for some sectors).

Other issues, implementation, and bananas. Minister Walker said he had consulted a number of countries who wanted to discuss trade and environment, electronic commerce, geographical indications, the WTO intellectual property (“TRIPS”) agreement and the Convention on Biological Diversity, “non-violation complaints” in intellectual property.

Minister Walker has also been asked by the conference chairperson to hold consultations related to a request by Honduras on the EU’s banana regime.

Development issues 
Group meeting, 3.30 pm

This meeting took place before the heads of delegations meeting. Facilitator Rohee explained to delegates that while the focus of the development talks is currently on the duty-free, quota-free market access proposal for least-developed countries’ exports (Annex F of draft ministerial text), the “development package” as a whole remains the objective of the negotiations.

This least-developed country proposal is being discussed first because ministers have shown they are willing to offer preferential market access to these countries. A key remaining question is how to find a legal way to provide this securely and predictably. Also being discussed are which countries would be involved and whether all products from them would be covered (see above).

Some developing countries said that they would not let specific development issues be diluted. They spoke favourably about giving preferential access to exports from least-developed countries, although they asked for flexibilities on such issues as which products would be covered, and how long the preferences would apply.

Countries describing themselves as small and vulnerable welcomed the initiative in favour of least-developed nations. They also wanted to make sure their interests would not be diluted when the ministerial text is redrafted.