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| by Emily Freeburg, |
Jan 13, 2006 |
Additional Information
What is the WTO?
The World Trade Organization, founded in 1995, serves 150 member countries from its headquarters in Geneva, setting and enforcing the rules for 97 percent of world trade. It is intended to help trade flow smoothly, freely, fairly and predictable by administering trade agreements, acting as a forum for trade negotiations and settling of disputes, reviewing national trade policies and assisting developing countries in trade policy issues through technical assistance and training programs.
What's the debate about?
The main sticking point of the current round of trade negotiations, known as the development, or "Doha Round," has been farm subsidies in developed countries such as the European Union, the U.S. and Japan. Poor countries argue that their agricultural sectors are damaged when farmers in wealthy countries are encouraged to overproduce. Both the U.S. and the E.U. have each proposed cutting subsidies, but they are each waiting for the other to act first.
What happened in Hong Kong?
Overall, the progress achieved in Hong Kong has been described as "minimal," but considering that the last two rounds of trade talks in Cancun and Seattle ended in failure, the fact that an agreement was reached is still significant.
Agreed:- Developed countries will end farm-export subsidies by 2013, but many suspect the E.U. will not act aggressively enough to meet the 2013 goal.
- Developed countries will eliminate all export subsidies on cotton in 2006, but many suspect that pushing this provision through U.S. Congress will be difficult. This provision also fails to address domestic subsidies, 90 percent of cotton subsidies and the main reason for the low prices that make African markets inviable.
No deals:- Developed countries didn't get cuts in industrial tariffs. NGOs forecast that this will open up local industries to unfair competition from the developed industries and multinationals of rich countries. This could lead to massive job losses and income losses for poor countries.
- Developing countries didn't get formulas for reducing other farm subsidies and agricultural tariffs.
Emily Freeburg, 25, works at a nongovernmental organization with the U.N. in New York.
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