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Manufacturers, Exporters, Wholesalers - Global trade starts here.

Looking Ahead to HK WTO Conference

The 6th World Trade Organization (WTO) Ministerial Conference scheduled to be held in Hong Kong from December 13 to 18 aims to settle a range of questions that should shape the final agreement of the Doha Development Agenda.

Sun Zhenyu, China's ambassador to the WTO gave Beijing Youth Daily his forecast for the upcoming meeting and what he thought would be a significant driver for a successful implementation to the Doha Development Agenda.

The interview was published on November 20. These are the key excerpts of that interview:

Beijing Youth Daily (BYD): WTO negotiations were deadlocked again earlier this year. Will the Hong Kong meeting help to resolve this deadlock?

Sun Zhenyu (Sun):  The success of the Hong Kong conference depends on what goals WTO members hope to achieve.

The WTO suffered a setback with its ministerial conference in Cancun, Mexico, in 2003. That ended with no result. WTO members had previously hoped to finalize the framework of the new round of negotiations.

It was only in July 2004, one year after the Cancun meeting, that a framework was agreed upon. However, negotiations soon came to another standstill. Members hoped that a draft agreement could be reached by the end of July this year, with the help of the WTO Mini-ministerial Meeting in Dalian from July 12 to 13 However, that, too, failed.

Major WTO members therefore spelled out what the main points were to be for the Hong Kong meeting. This they did in October. Many ideas and proposals were put forward. On November 9, a WTO ambassador's meeting was held in Geneva to analyze the situation and adjust the tasks to be carried out in Hong Kong.

So, there's been a shift from just trying to bang out main points to reaping small rewards. For example, members have proposed to agree on tariff and quota-free rights for the most underdeveloped countries, and set a timetable for the next round of talks. If we regard these as our goals, the Hong Kong conference is likely to be a success.

BYD: Does this mean lowering original targets of the Doha Development Agenda?

Sun: Not necessarily. In spite of the consensus that expectations should be lowered, members have agreed not to lower the Doha targets. Lowering expectations is to reduce the risk of failure like that experienced at the Cancun conference. Agreeing on a date for negotiations always takes a long time. Since it would be obviously impossible to reach a full-scale agreement, lowering expectations is a realistic option.

BYD: What caused the deadlock of the Doha Round of Talks this year?

Sun: Talks that focus on the agriculture sector are bound to be sullied by claims of high tariffs and high subsidies. Agriculture is a sensitive topic for many countries. On October 10, the United States brought forward a plan to cut agriculture subsidies on its agricultural sector. It is a step forward, albeit a small one. The European Union also announced they would lower tariffs on agricultural products. But this was criticized by many for its lack of ambition. A gridlock in agriculture negotiations will invariably lead to a stalemate in negotiations on products and services trade.

BYD: What is China's stance on the Doha round of talks?

Sun: If progress is made on the Doha agenda, a good environment will be created for world economic development, setting up favorable conditions for China and other developing countries. As one of 148 WTO members and a major trading power, China has been exerting active and constructive pressure in negotiations, pushing for timely results. China also tries to make contributions within its abilities. As a developing country, China hopes to solve the trade imbalance through talks.

BYD: As a developing country member of the WTO, which sectors does China want to expand and which does it want to protect?

Sun: Take agriculture for example. China's agricultural sector can't compete with some other countries; especially not for land-intensive products like grain and cotton. On the other hand, we own some distinctive agricultural products, like fowl, fruit and vegetable. China has comparative advantages in these products because they are all labor-intensive. China has a huge competitive advantage for general industrial products, but not for high-end fished products, for instance. So, we will promote the export of products for which we have competitive advantages and protect those product sectors that are not as strong.

Any deal reached on the Doha Development Agenda will have huge impact on our country. This is why we have to actively participate in talks. We will try our best to get a balanced result. The prime goal is to lower tariffs and subsidies. At the same time, we should give full consideration to the fragile economies of other developing countries, and implement certain protection measures. The principle of the Doha Development Agenda is to achieve goals of trade liberalization as well as development.

BYD: Which service sectors does China care about the most? How open are these sectors?

Sun: In general, our service sectors are not highly developed. Only a few sectors have some competitive advantage such as ocean-line shipping, tourism, Chinese language education, and computer services. The challenge we face is that some developed countries protect their domestic sectors with trade barriers, including tests and standards, making it difficult for Chinese products to penetrate their markets. We hope that the export of our services can be promoted through talks.

But China's finance, telecommunications and special service sectors are booming and developed countries hope to further expand into these sectors. During negotiations for China's entry to the WTO, we committed to opening many sectors. We cannot open any additional sectors. We have to persuade other WTO members to understand China's difficulties.

(China.org.cn by Tang Fuchun, November 30, 2005)

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