The Hindu Business Line : Lamy's task

MR PASCAL LAMY, who takes over as the Director-General of the World Trade Organisation in September, will need all his chaperoning skills to make the December Hong Kong Ministerial meeting a success; the WTO needs one badly if it is to shake off the unhappy memories of Cancun. For that, Mr Lamy will have to use his persuasive powers fully to get the preparatory negotiations back on track, and on schedule. It is still too early to say if Mr Lamy will be able to do all this, but to his credit his candidature was backed by the developed countries and developing economies (India included) which could point to his many-faceted negotiating skills.

A good sign heralding his tenure is the substantive progress on the farm tariff front — on the complex issue of the conversion of specific rates to ad valorem equivalents — which has cleared the way for the finalisation of the July-end "first approximations". Without the "first approximations" it would be impossible to begin work on a draft declaration for the Hong Kong Ministerial, and sans a declaration Hong Kong would be no better than the Cancun or the Seattle meeting, both of which have been major milestones in the campaign of the world's poor to have their voices heard. Even so, some WTO members may not fully accept the "Paris breakthrough" on the farm tariff structure issue (sugar has been left out of the deliberations because of the deep differences on it among some countries) not the least because it was facilitated by the so-called "five interested parties" (the US, the EU, India, Brazil and Australia), a group that is increasingly raising suspicions about its capability to represent effectively the real interests of all segments.

Mr Lamy's real difficult job is to get the negotiators to commit to specific positions on such sectors as services and non-agriculture market access (NAMA), which have been hanging fire for the farm tariff issue to be sorted out. On services, the final offers and requests will have to be tabled before the end of this month for negotiations to begin in Geneva and a final picture can emerge in time for the finalisation of the "first approximations". On NAMA, there are wide differences among countries on an acceptable tariff-reduction formula and the "flexibilities in its applications" afforded to developing countries; a quick agreement is not expected. There is, in fact, the danger of the developed countries asking for a quid pro quo in these areas from the developing world and farm-goods exporters in return for any concession made on the tariff-conversion issue in agriculture; a sure recipe for the negotiations to get grounded in no time.

There are other areas, such as a scaling down domestic support for farmers and an end to export subsidies, which have not yet been dealt with and on which the G-22 (of which India is a prominent member) has taken a stand in support of a cutback. There is no question of any significant concessions in this sphere without getting appreciable benefits in return, a negotiating area where countries such as Brazil and India should continue to play a crucial role. It will be interesting to see Mr Lamy's reaction to all this because it was during his tenure as Trade Commissioner that the EU adopted an uncompromising stand on the domestic support and export subsidy issues.

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