Malta and world trade liberalisation

Malta would derive net benefits from a positive conclusion to the ongoing round of international trade negotiations inside the World Trade Organisation, but would have to prepare the workforce for possible job losses in certain sectors according to Censu Galea, the Minister for Competitiveness and Communications.

Mr Galea was speaking to The Sunday Times exclusively on his return from last week's WTO ministerial meeting in Hong Kong on the four-year-old Doha Development Agenda round. With many contentious issues left to further negotiations aimed to deliver a roadmap by April 30 for negotiating the final 'package' before the end of 2006, "a mild consensus on a number of agreed points emerged", the minister stated, "reflecting a difficult balance of give and take".

The proposed trade summit to be hosted by British Prime Minister Tony Blair in the new year for leaders from the G8 and five developing countries could boost the chances of a successful conclusion of the round by the target end date of December 2006, Mr Galea said.

"Malta's adjustments to greater world trade liberalisation in industrial goods and services," he continued, "would involve far more dialogue than exists now between all stakeholders to raise awareness of such possibilities as well as expanded policies for vocational training and retraining".

However, he was confident that Maltese agriculture would not sustain any major impact from freer trade in agricultural goods. "Our farmers have a built-in advantage of offering fresh, non-frozen products to consumers, and the EU's Common Agricultural Policy as applied at present does not affect the sector. However, some products could become vulnerable to greater competition from North African suppliers."

In Brussels for a key vote on the REACH chemicals directive, Mr Galea did not attend the informal Commonwealth Trade Ministers' lunch on December 12 - from which many others were also absent, according to a member of the Malta delegation to the WTO consulted by The Sunday Times. Despite the Valletta Declaration on international trade issued by CHOGM on November 26, briefly mentioned in Mr Galea's plenary speech, there was apparently no formal co-ordination among Commonwealth ministers during the Hong Kong negotiations. To date, they do not co-ordinate at senior official level at WTO headquarters in Geneva.

Commonwealth secretary-general Don McKinnon however made a stiff critique of the Hong Kong outcome. "It is extremely disappointing that the negotiations continue to be characterised by a 'business as usual', mercantilist approach", he said in a statement issued by the Commonwealth Secretariat. "The reality is that the WTO's dynamics have changed and the Doha Round can no longer be concluded by the advanced countries; Europe, North America and Japan cannot hope to carve up a deal among themselves and thrust it on everyone else."

Announcing his strong support for the proposed Blair summit, Mr McKinnon said: "We have come to a point where trade is now too big an issue to be left to trade negotiators and technocrats. Much greater strategic vision, statesmanship and political will is needed. As the Commonwealth has demonstrated, the most difficult political decisions demand the engagement of Heads of Government. They now need to ensure that their trade negotiators come back with a meaningful agreement by the end of 2006 that delivers the development dimension everyone is looking for."

"Through their recent Valletta Statement on Multilateral Trade, Commonwealth leaders demonstrated that it is only at the highest political level that you can get the perspective to place trade negotiations in their proper context. Increased trading opportunities are not only the most potent weapon in the fight against poverty but they are also an important element in strategies to combat terrorism, illicit migration and drug trafficking."

Mr McKinnon admitted that "some progress" had been made at Hong Kong. This included a deadline of 2013 set for the elimination of agricultural export subsidies; some agreement on providing duty and quota-free access for 97 per cent of the exports of the poorest countries to the markets of the developed countries. However, this was "nowhere near meeting the original target of agreeing on negotiating modalities for agricultural and manufactured products, and making concrete progress on negotiations for services, rules, trade facilitation and on the development dimension of the Doha Round. More needs to be done to address the special needs of poor countries and vulnerable small economies".

The thousands of civil society activists who had converged on Hong Kong to demonstrate, network and lobby delegations also announced their deep disappointment at the conference outcome, with OXFAM labelling it as a 'betrayal of developing countries'. Friends of the Earth slammed the final consensus as implying a huge threat to the environment if under the final negotiated package countries had to dismantle policies protecting their natural resources.

Major farmers' networks denounced trade liberalisation so far as a 'failure', destroying family farming in both developed and developing countries, demanding that agriculture should no longer be negotiated within the WTO.

The much-vaunted last minute offer by the EU to eliminate agricultural export subsidies by 2013 was put into perspective by the EU Trade Commissioner three days after the Hong Kong meeting ended. He stated in an interview that the EU was even less likely to make further concessions on agriculture (viz. on domestic support for farmers or import duties of agricultural products) in the Doha round, "given the few concessions on offer from its trading partners in Hong Kong". He also emphasised that the budget review agreed for 2009 at the recent EU summit could not be linked to the Doha talks.

Commissioner Peter Mandelson said he could see no reason to hold another large-scale ministerial meeting in the coming year while questioning whether WTO members would be able to stick to the new April deadline for making progress in the talks.

With the US President's fast-track mandate to conclude a trade agreement without Congressional approval expiring in mid-2007, many observers now wonder whether the Doha Round can come to a meaningful conclusion beforehand.