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Last Updated: Monday, 12 December 2005, 12:09 GMT
What sort of development do we want?
By Steve Schifferes
BBC News economics reporter at the world trade talks in Hong Kong

WTO chief Pascal Lamy
WTO chief Pascal Lamy admits freer trade produces winners and losers

On the eve of the world trade talks in Hong Kong everyone agrees that development should be at the centre of the agenda, but there is no consensus on how trade could best foster development.

As 11,000 journalists and delegates gathered at the high-tech Hong Kong Convention Centre ahead of the talks, which offically start on Tuesday, they were greeted with an ancient spectacle at the press centre - two dragons dancing and fighting while precariously balanced on poles or swinging from post to post.

It was a spectacle that bore resemblance to the trade talks themselves, which are precariously balanced on the verge of failure as the EU and the US trade insults.

Crucially, the parties are far from an agreement on how to free up agricultural markets. Reform is seen as essential in order to allow poor countries to sell more of their products to the rich.

'Human face' for talks

The US has been leading the call for the complete liberalisation of world agricultural markets, including tariffs, domestic subsidies and other barriers.

But ahead of the talks, the EU, which has not been able to match the US proposals, launched a counterblast.

EU Trade Commissioner Peter Mandelson suggested that, instead of agriculture, the talks should centre on how to best help the very poorest countries, the least developed, or LDCs.

He wants the WTO's priority at Hong Kong to be crafting a special development package for these countries, along the lines of the EU's own "everything but arms" initiative which has offered completely free trade to 90% of imports from LDCs.

An anti-WTO protester
Protesters have converged on Hong Kong

He said that this would "earth these negotiations in the real world," and "give them a human face".

It would also embarrass the US, which has concerns about opening up its markets, for example, to the Bangladeshi textile industry.

And it would split off the interests of developing countries, between the middle income countries such as Brazil, for whom agriculture is very important, and the poorest countries, who want to keep some of their existing trade preferences.

Workers' rights

Meanwhile, in another, less auspicious meeting room - the Hong Kong social services building - international trade unionists were telling the boss of the WTO, Pascal Lamy, that workers rights should be at the centre of any attempt to help the world's poor.

Free trade creates wealth for the participants
Tim Hammond, London, UK

Guy Ryder, the head of the International Trade Union Confederation, said that workers would only see the benefits of globalisation if there were core labour standards which were enforced to ensure that workers in poor countries were not exploited.

But Mr Lamy said - with some regret - that developing countries had rejected any inclusion of labour issues in this round of trade talks because they feared it would become an excuse for protectionism by the rich countries, who would try to block any imports made by cheaper labour.

However, he acknowledged that opening up markets did produce losers as well as winners, although he argued that overall free trade creates rather than destroys jobs.

But he said that the losers should be compensated.

While that could be done by national governments in the rich nations, it was not always possible to do so in poor countries, he admitted.

We are not trying to outwit the EU - we are just fighting for our rights
Celso Amorin, Brazilian foreign minister

So Mr Lamy argued for yet a third approach to helping the poor - an "aid for trade" initiative that he said the WTO was discussing with the other international bodies such as the World Bank and IMF.

This would help replace income loss through trade liberalisation, and also give poor countries help with marketing their products (improving their ports, for example) so they could gain more benefits from any trade deal.

Developing countries stand firm

However welcome some of these moves might be, they are unlikely to sway the developing countries from the path of negotiations they have chosen.

Celso Amorin, the Brazilian foreign minister who has crafted the G20 alliance of middle income countries that has played a decisive role in shaping this trade round, told the BBC that Brazil was standing firm for agricultural concessions.

"We are not trying to outwit the EU," he said. "We are just fighting for our rights."

Mr Amorin confirmed that Brazil and other countries were prepared to make moves on opening up their own markets - but only when they got a better offer on agriculture than what was on the table.

Agriculture is the one issue that seems capable of uniting the disparate interests of developing countries.

So despite its uneven benefits, it is likely to remain the centrepiece of discussions at Hong Kong.

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