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WTO forum must deliver EDITORIAL: WTO forum must deliver Published on December 11, 2005 Successful conclusion of the ministerial meeting in Hong Kong will benefit developing countries. Agricultural reform will be on the top of the agenda at the World Trade Organisation (WTO) ministerial meeting that starts on Tuesday in Hong Kong. Trade ministers from the groups 148 members should do whatever it takes to reach agreement on a new accord in this critical area. Should the ministers again be unsuccessful in reaching an agreement, which happened in the last few such meetings, some members may lose faith in the multilateral system. Such failure to rise to the occasion would be dismal for the worlds least-developed countries, which are trying to build up their economic strength by playing by the rules of the trade system. The Doha Round is meant to be a development round as it addresses concerns of most importance to developing countries, particularly the outdated protectionism that distorts the worlds trade in farm products. Moreover the round is being held in the hope that the attendees can sort out how to properly deal with the issues that are vital to the stability of future global trade, particularly those related to subsidies and dumping. The list of trade disputes goes on. Dictionary:
However, with only a few days to go before the meeting starts, countries have yet to take the decisive initiatives that are needed if the meeting is to produce any meaningful outcome. The European Union is in the hot seat as the 25-nation bloc faces demands from many other parts of the world to further slash its barriers to freer trade in the agricultural sector. The EU meanwhile accuses countries such as Brazil, Mexico and India of failing to open their markets to industrial goods. The success of the WTO meeting will rely on the readiness of both developed and developing countries to be pragmatic and overcome domestic political pressures to make necessary compromises. Without such concessions, painful though they may be, the Hong Kong meeting is fated to be listed in history books alongside the high-level trade talks in Cancun, which collapsed in 2003. But unlike the previous meetings in Seattle and Cancun, WTO members this time around are feeling the pressure. A new agreement is vital to the unclogging of global trade. Some fear that should this round end in deadlock countries may gravitate even more towards the trend for bilateral free-trade agreements. If that happens, the issues facing developing nations, such as farm-subsidy cuts and unfair-dumping allegations, will remain unresolved and continue to hurt them. Owing to budgetary constraints, Washington is ready to strike a deal. The US has already offered to reduce some domestic farm subsidies by 60 per cent over the next five years and to eliminate export subsidies by 2010, on condition that other countries reciprocate. Unfortunately, the strong resistance from farmers to farm reform in some European countries does not bode well for the US overture. Dictionary:
Countries cant afford to keep dragging their feet on these key issues. The US Trade Promotion Authority (TPA) is set to expire in the middle of 2007. The TPA gives the US Congress the right to either approve or reject a trade deal but does not give it the right to debate a trade deal. Giving Congress the right to do so would make deal-making on international trade issues all the more challenging. Should the round fail, rich nations such as the US and those in the EU would not suffer so much. It is developing countries that aspire to boost their economic strength through free and fair trade that would be adversely affected by the diminishing prospects for new global trade rules. The missed opportunity could leave the least-developed countries languishing in poverty and destitution for many more years. To its credit, the WTO has sorted out a number of trade conflicts. For instance, the WTO ruled in favour of Thailand, along with other countries, over complaints against the EU with regard to the groups sugar subsidies. Without the WTOs rules-based mechanisms, these countries will find it a lot more difficult to pressure richer nations to open their markets or settle trade disputes through bilateral negotiations. The world cannot afford to let the crucial WTO meeting break down this week. Dictionary:
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