There is a global consensus on the importance of developing trade and the fact that only the World Trade Organisation (WTO), by realising the November 2001 Doha Development Agenda, can push through the development-friendly reforms that are urgently needed.
These include the elimination of agricultural export subsidies, substantial reductions in trade-distorting domestic support and substantial improvements in market access through the reduction of tariff peaks and tariff escalation.
Over the past few weeks a number of trade ministers have confirmed to me that there is a high degree of political commitment leading up to the Hong Kong Ministerial Conference in December this year and that we need to achieve significant results before it begins if the Doha round of world trade negotiations is to conclude in 2006.
My consultations indicate that there is a high level of convergence regarding the need for a substantial breakthrough in Hong Kong in five key areas: agriculture; tariffs on industrial products; market opening offers in services; rules and trade facilitation; and a proper reflection of the dimensions of development. But there are a number of potentially intractable problems ahead and we should not underestimate them.
The Doha agenda is an undertaking that we will not be able to conclude unless we make progress across the board. We cannot afford to wait for results in agriculture before making further advances in tariffs on industrial products, services, rules and the other areas.
The following are some of the key negotiating areas where I believe we will need more focused attention.
With respect to agriculture, while far-reaching commitments were agreed for all three pillars of the negotiations — domestic support, export competition and market access — there remain a number of gaps to be filled and thorny issues to be resolved.
On export competition, despite the important commitment to eliminating export subsidies, we still need to fix an end date. With respect to domestic support, while it is accepted that countries with higher subsidy levels will reduce much more than those with minimal subsidies, the actual level of commitments to be assumed still needs to be carefully negotiated.
On market access, while it was agreed that reductions would be made according to a tiered formula, we still need to negotiate the actual percentage of reductions to be made by developed and developing countries.
With respect to tariffs on industrial products, the framework is only a halfway point on the way towards a final agreement on negotiations.
With respect to services, while progress has generally been made in the negotiations, the number of initial offers remains quite low. This is very worrying.
The services negotiations are a key element of the overall negotiations and a mediocre result in services could prevent members from finding the balance necessary to conclude the round with high levels of ambition in other areas.
The road ahead could still be a rough one. Negotiations are still behind schedule and every new delay weakens its credibility and value. We need to approach our work over the coming months with a sense of urgency and determination. — Â