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Friday, 16 December 2005, 15:00 GMT

Quiet desperation reigns at trade talks

By Steve Schifferes
BBC News economics reporter at the WTO talks in Hong Kong

It felt like groundhog day again at the massive Hong Kong conference centre where the world trade talks have stalled, trapping thousands of journalists and delegates alike.

US Trade Representative Rob Portman

After four sessions during which the US, the European Union and developing countries have blamed each other for refusing to make any concessions, a mood of increasing despair has settled over the proceedings.

During the day, the US and the EU were using a rolling series of press conferences to tell much the same story: the other, each said, was showing bad faith.

The styles, however, were rather different.

EU Trade Commissioner Peter Mandelson expressed a tone of moral outrage over the lack of serious negotiations.

US trade representative Bob Portman, on the other hand, disappeared into the talks, leaving his deputy to explain that the US was just rolling up its sleeves and trying to get on with the job at hand.

All the while Celso Amorim, the Brazilian foreign minister who heads the trade talks for the G20 group of middle income developing countries, looked more and more pleased as he announced in the middle of the day that he had succeeded in uniting the entire block of developing countries in one grouping - the G110.

Long night ahead

In a sign of the increased tensions, meetings ran longer, more press conferences were late or cancelled as harried trade ministers rushed from appointment to appointment, and more and more press releases from NGOs piled up on journalists' desks.

With 48 hours still to go, weary delegates now face a long night of last-ditch talks. The chief negotiators will meet at 6am on Saturday to try to agree a draft text for final approval by Sunday night.

As usual, a number of small countries want to use the approaching deadline to force their own concerns higher up the agenda by threatening to walk out.

Peter Mandelson

In Doha it was Asian shrimp producers. This time, though, there are several different issues triggering warnings of downed tools.

Honduras wants the EU to lower its tariffs on bananas. Benin says the US needs to end its subsidies on cotton. Sugar producers such as Mauritius say Europe has to offer more compensation for lost sugar exports. And Venezuela is adamant that the WTO's deal on services needs renegotiation.

Any of these issues could bring the talks to a halt, even if some progress is made in other areas. They are all long-standing flashpoints where negotiations have been going on for years.

Big issue

One consistent feature of trade talks has been that sometimes the most obscure topics can suddenly become the hinge on which the whole future of the world trading system now depends.

In Hong Kong it is the Canadian Wheat Marketing Board and the New Zealand Dairy Board which suddenly have become the focus of extraordinary attention.

This is because the only - admittedly modest - hope for a deal on agriculture, once the centrepiece of these talks, is get a date agreed by which all countries will eliminate their export subsidies.

But even this cannot be agreed thanks to accusations from the US and the EU that Canada, Australia, and New Zealand market their farm products unfairly. All their farmers, it is claimed, sell to a marketing board - which supposedly amounts to an unfair monopoly.

But maybe not in New Zealand. There the Fonterra Cooperative Group has indignantly issued a statement pointing out that the state monopoly for dairy products was repealed in 2001.

Demonstrators in Hong Kong

If there is no deal on a date for export subsidies, then even UK trade minister Alan Johnson - who came to the conference in a mood of somewhat forced optimism - said he would be forced to admit that the talks had failed.

Slim pickings

The only item then left on the agenda would be a deal to give extra trade benefits to the world's 49 poorest countries, who make up less than 1% of world trade.

And even these gains, if agreed, would not come into effect until a full year after the trade talks were finally concluded and ratified.

It all seems a pretty poor harvest after a year of worldwide agitation to Make Poverty History, and the high hopes of the Gleneagles G8 summit in July with its mass protests and high-minded declarations.

But paradoxically, one last effect of Hong Kong may turn out to be uniting the developing countries themselves - something which might change the nature of trade rounds more deeply than any deal that might be agreed.



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