December 17, 2005, Hong Kong, Press Release

The much awaited revised Draft Ministerial Text is finally out. As expected the revised text is full of good intentions rather than any substantial movement forward since July 2004.

Elimination of export subsidies has been one of the bones of contentions not only between the G-20 and the EU but also the major players – the EU and the US. “Though the end date 2010 for the elimination of export subsidies is still to be agreed but the EU has been successful in making the language in the para 6 dealing with export subsidies more complex”, says CUTS International, a leading research and advocacy group.

In para 11 and 12, which deals with cotton, there is no firm and binding commitments on the creation of a “special development fund’ to compensate losses to the poor African countries in the interim period of elimination of domestic support. This has been one of the key demands of the cotton producing African countries. Although the text mentions that developed countries will eliminate their subsidies for cotton in 2006 but the reduction of trade distorting domestic subsidies, which is causing greater injury to the African cotton farmers, is subject to agreement on general formula by the WTO Members.

In NAMA and Services, the critical issues related to LDCs have not been adequately addressed. Para 18 of NAMA, has touched upon the issues of preference erosion as a result of MFN liberalization but consensus is yet to be reached. In duty and quota free market access for LDCs more conditionalities have been attached. The commencing year for operationalising duty and quota free market access is yet to be agreed. Moreover, the text ensures a gateway for developed countries will have liberty to exclude products originating from the LDCs.