Read the other Global Envision blogs from Hong Kong:
December 12, 2005 – Why Free Trade?
December 13, 2005 – Opening Session
December 13, 2005 – Aid For Trade
December 13, 2005 – Food Fight
December 14, 2005 – Results of Day One of WTO Negotiations in Hong Kong
December 15, 2005 – The Joy of the Press Conference
December 17, 2005 – Wrapping Up in Hong Kong

G110

This “Group,” a loose coalition of the world's poorest countries, is becoming larger and more influential by the day. By banding together, they hope to bring the focus back to development and end three days of U.S.-EU squabbling over agricultural tariffs and subsidies.

But there's been nothing to write home about so far. There are three concurrent areas of negotiations going on here in Hong Kong: Agriculture, Services and Non-Agriculture Market Access (NAMA). There's been no progress in any of these areas, and no major breakthroughs seem to be on the horizon.

A Deal Collapses

Late Thursday night, the U.S. and Japanese announced that they would not support the deal on quota-free and duty-free access to the 32 poorest countries. Before then, it looked like this was going to be the only deal at the conference, and now it has disintegrated. Robert Portman, the U.S. trade representative, offered duty-free and quota-free access to West African cotton producers as a concession. But his gesture came under heavy fire from African nations and the EU, who say it is U.S. cotton subsidies that really hurt the African cotton producers, not a lack of market access. Subsidies allow big U.S. cotton producers to flood world markets with their product, depressing global cotton prices and making the cotton coming from West Africa still too high-priced to be competitive. This is referred to as dumping, a word sometimes preceded or followed by expletives here in Hong Kong.

The Green Room is the Place to Be

Ironically, in this cavernous hall filled with official government delegates from nearly 150 countries, the one hope of progress may lie in the so-called Green Room. That's the director-general's invitation-only conference room. Pascal Lamy welcomes small groups inside to discuss issues that could ultimately break a deadlock. These select invitees represent key countries. And despite what is at said publicly in Hong Kong about the fair inclusion of developing countries into the multilateral trading system, those players continue to be the large economies. Getting a Green Room pass is a status symbol; it means your country is important in the negotiations. It also means you are not getting much sleep; it is said that Mr. Portman stays as late as 3am.

It is rumored that no more than 25 countries are in this exclusive club, and that what emerges from the Green Room will be a last-minute, take-it-or-leave-it package offered to all member states. Countries who do not take the offer risk being tarred as the bad guys. If the G110 can stick together, it won’t be so lonely to be in that group.

Verbiage; On the Table vs. Under Discussion At the WTO meetings, people spent time trying to clarify what is "on the table" — i.e. the existence of a text document that contains an official, submitted offer — versus what is merely "under discussion." For instance, the EU has put a qualified offer on the table to eliminate export rebates if their trading partners (read: U.S., Australia, New Zealand) phase out their export subsidies. The U.S. has made a verbal commitment to do so by 2010; however, everyone claims that they have not seen this in writing anywhere.

One much-discussed issue is non-agriculture market access, or NAMA. There is much ado about a strongly worded letter submitted by 11 countries (Philippines, Argentina, Venezuela, Brazil, China, Egypt, India, Indonesia, Namibia, Pakistan and South Africa) about these negotiations, which cover all industries outside the agreement on agriculture. Products under NAMA represent about 90 percent of global trade. These 11 countries charge that the rich countries have offered little compromise on NAMA, and that they will not give concessions on NAMA until the rich countries give concessions on agriculture. That said, nothing is currently “on the table”, so there is nothing much to report.

In negotiations on agriculture, the ministers are apparently not yet even in the same room. With what one minister called the “Punch and Judy Show” featuring the U.S. and the EU still airing, it seems like the issue facilitator has not yet figured out what is possible. The WTO Secretariat made a report about the latest meeting of ministers in a large group where each restated exactly what had been said before. Moving away from idle chats and towards a text-based negotiation on all areas would free this deadlock over language. No one aside from the participants in the discussions themselves seems to know what happens in closed-door meetings between the each issue facilitator and the delegations, but hopefully it's something that in the end, will allow negotiations to move forward.

By now, it's more than clear that these Hong Kong meetings will not achieve what was once hoped. But one delegate I spoke with was optimistic that some incremental progress would at least keep participating ministers committed to ongoing talks. Even small movements ahead will give the ministers ownership over the process, and this would help them stay focused once they have returned home.

Displeasure and Tension

The tone in the meetings today is definitely one of displeasure with the positions of the developed countries, and there is plenty of tension in the air. In a discussion over lunch with one of Portman's speechwriters, I learned that the tension may be more palpable in the hallways than in the actual high-level negotiations. The trade ministers, he said, are all very intelligent and very affable, and that they seemed to challenge each other and enjoy the rivalry to some extent, more so than what we see – the continual throwing of jargon back and forth.

The apprehension outside of the meetings is also ratcheting up. The South Korean protests groups have garnered most of the media attention, though there are many other groups marching in central Hong Kong. Yesterday, the South Korean farmers group announced that they would not remain peaceful today. Their threat is taken very seriously in light of their history: at the WTO's 2003 meeting in Cancun, South Korean activist Lee Kyeong-Hae screamed “WTO kills farmers” and killed himself. The Korean farmers have been at this for many years, targeting not only global trade talks but also their own government's plans to liberalize its rice market, and have a record of successfully disrupting meetings. Much of their displeasure comes from a WTO deal negotiated last year. South Korea pledged to double its rice-import quota to about 8% of total domestic consumption, and agreed to fully open its rice market to exports in the next decade.

Last night I met with one of the Korean translators employed by the Hong Kong police. She said that they are doing everything they can to appease the group and not provoke violence. Yesterday, there was a tense round of negotiations about whether or not the Korean protest group could set up a sound system in a public square. The police eventually acquiesced. And, in a signal that there's still hope that the protests will stay peaceful, the Hong Kong police still send regularly uniformed officers, rather than ones clad in riot gear, to monitor the protests.




Photo credit Laura Guimond, Mercy Corps Director of External Relations.

Blog by Erin Thomas, Managing Editor Global Envision. Erin and Laura are in Hong Kong with other global NGOs advocating for free trade policies that are fair. Please send them any comments or questions and stay tuned for the inside scoop on negotiations.

Read the other Global Envision blogs from Hong Kong:
December 12, 2005 – Why Free Trade?
December 13, 2005 – Opening Session
December 13, 2005 – Aid For Trade
December 13, 2005 – Food Fight
December 14, 2005 – Results of Day One of WTO Negotiations in Hong Kong
December 15, 2005 – The Joy of the Press Conference
December 17, 2005 – Wrapping Up in Hong Kong

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