12/16/05 Hong Kong update

12/16/05 Hong Kong update

This is the middle of the World Trade Organization ministerial in Hong Kong. Delegations from member nations will have until Sunday to work out a potential deal for trade reforms, especially within the agricultural component. Then again, some analysts say even extending the talks to another ministerial early next year, versus a complete breakdown, would be seen as a victory. There are several sticking points remaining. And if news reports are any indication, it appears to be the European Union versus the U.S. and the rest of the world. One reason is the E.U. insistence that they have offered their best deal when it comes to market access and subsidy reductions, especially in lieu of their claim developing nations have offered little in lowering tariffs on services and manufactured goods. This has led many of the so-called G-20 group of developing nations such as Brazil and India to charge the E.U. with stalling the talks to keep their subsidies in place, which is three times higher than what the U.S. currently has. Despite this back and forth finger pointing, U.S. Trade Representative Rob Portman remains optimistic a deal can be hammered out. PORTMAN: I'm a little more encouraged because what I also hear is they can see some movement if there were progress in some of these other areas particularly industrial tariffs being reduced in some of these emerging markets we've talked about, some of the emerging markets around the world. And reduction of barriers to services industry in Europe which is extremely competitive. As of late Thursday, there was talk of incremental progress in negotiations on W.T.O. issues but countries and W.T.O. officials were not forward with specifics. Most of the news coming out of Hong Kong has centered away from negotiations and on peripheral matters. Protests of all sorts, but nothing like those that impacted Seattle in 1994. The E.U. charges that the U.S. food aid policy is distorting because it offers food commodities instead of cash. The U.S. made a statement, reminding the E.U. that our nation provides fifty-seven per cent of all global food aid and fifty per cent of world emergency food aid, then announcing it would double by 2010 its annual amount of contributions to global aid for Trade. Some observers say the E.U. claim was another attempt to take the focus off its unwillingness to budge on the subsidy issue. But U.S. officials in Hong Kong say despite the claim, they remain focused on what they believe is the main issue & increased market access, both for developing nations, and more importantly, increased market access for U.S. ag goods.
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