At Issue

What's on the agenda in Hong Kong

| November / December 2005


The World Trade Organization's goal in Hong Kong is to conclude the current Doha Development Round of negotiations with a consensus declaration that would expand trade rules in three areas: industrial tariffs, agriculture, and trade in services. Here's a summary of the issues.

Industrial tariffs:
The nonagricultural market access (NAMA) negotiations aim to reduce tariffs on everything from computer parts to clothing to heavy machinery, plus natural resources like fish, forest products, and minerals. These talks are the most likely to achieve at least a partial agreement by the Hong Kong meeting.

Agricultural subsidies:
Developing countries have long wanted to put an end to the lavish support systems that prop up inefficient agriculture giants and to eliminate tariffs on imports in the United States and Europe. Subsidies also hurt small farmers in countries large and small because most of the money goes to industrial farms owned by behemoths like Cargill and ConAgra. These corporations dump below-cost commodities on world markets, which undercuts small local farmers in poor countries and drives them out of their own markets. This is the most contentious area of the negotiations and was the main reason the Canc?n ministerial collapsed in 2003.

Trade in services:
The United States and the European Union have been pushing for years to secure the General Agreement on Trade in Services (GATS). Services include intangible things such as banking and insurance, transportation, telecommunications, and movement of employees, as well as public services like energy and water. The biggest sticking point is immigration. India, which is pumping out engineers and MBAs, has said that an agreement facilitating work visas is its highest priority. This would allow it to export more high-tech workers to the U.S. and other wealthy countries, and could force the U.S. to scrap its economic means test, which requires employers to demonstrate that a foreign worker will not displace a U.S. citizen who could do the same job.



A wild-card issue:
The U.S. has proposed privatization of energy services -- oil, gas, nuclear, hydro, wind -- as an area for liberalization. This is a dangerous move, according to Deborah James of Global Exchange. 'The vast majority of the world's energy resources are owned by governments,' she says. 'Forcing countries to privatize these resources has serious national security implications.' James speculates that the U.S. proposal may even foreshadow an attempt to break the OPEC cartel. The U.S. has already convinced Saudi Arabia to open up parts of its state oil company as a condition of joining the WTO. And European negotiators have offered WTO membership as a carrot to Iran, OPEC's second-largest producer, in negotiations over its nuclear program.