Editorial: WTO deal confounds the critics

Opinion

Some people went to Hong Kong last week hoping to dance on the grave of the World Trade Organisation. They were determined to treat the expected failure of the sixth ministerial conference as the death not just of the Doha Round of multilateral negotiations but of the WTO itself. They made the mistake of leaving at the conference's scheduled end.

By the time the antagonists were on the way home to report the WTO's demise, weary trade ministers, still in Hong Kong, were meeting one more time to try to reach a deal. And they did. Late on Sunday the breakthrough came when the European Union agreed to end agricultural export subsidies by 2013.

That, of course, is just one issue among many on the Doha agenda, but it had become by this point in the round the sticking point. Food trade is the most contentious arena of negotiations and all sides except the EU had conceded something along the way to Hong Kong. The Europeans would give nothing away until well into the sixth and last day of the conference.

To maintain their intransigence they resorted to some truly desperate arguments, such as accusing the New Zealand dairy co-operative Fonterra of trading as a state enterprise, mainly on the ground that it handles this country's EU quota. To blame other countries for contrivances that exist only because the EU imposes import quotas was a bit rich. In the end it was remarkable that the EU not only relented on export subsidies in principle but agreed to an expiry day. It is the later of two dates that were on the table but it is a date nevertheless. The end of subsidised European exports should lift prices in other markets and boost returns for efficient farmers everywhere. New Zealand can begin to calculate some likely gains, though of course the round is far from concluded.

The Hong Kong ministerial conference agreed to an outline, or "framework", of a deal and set deadlines for final agreement. That might not sound like very much but it was more than seemed likely at the start. Summing up, the WTO director-general, Pascal Lamy, said, "We now have enough fuel in the tank to cruise at the right negotiating altitude next year". The next task is to agree on enough detail by March so that the round, already four years old, might produce a comprehensive agreement this time next year, a deadline imposed by the expiry of negotiating rights delegated by the United States Congress to President Bush.

The prospects are now better than they seemed before Hong Kong that this is indeed a "development round". The poorest countries among the WTO's 149 members are to receive duty-free access to developed markets, unrestricted by quota, for nearly 97 per cent of their exports. Cotton producers will be relieved of subsidised competition from rich countries as early as next year. These are concrete concessions that give the lie to statements from relief agencies and others who wrote off Hong Kong as "a betrayal of development promises by rich countries whose interests have prevailed yet again".

Why are some groups so anxious to see the WTO fail? Some, of course, are protected groups like the Korean rice farmers so prominent in street protests, and academics and teachers in this country who fear an agreement covering services will force state education to face more private competition. In fact Hong Kong produced quite a soft resolution on services: "Market opening will not be mandatory", especially for less developed countries.

It is a daunting task to produce unanimous agreement from so many countries on so many different items of trade. Little wonder it so often goes to the brink of collapse before common purpose is found. It happened at Hong Kong and it will happen again before the round is done. But success looks more likely now.