The World Trade Organization: The Hong Kong Ministerial


 

Publication Date: January 2006

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

Type:

Abstract:

The World Trade Organization (WTO) held its 6th Ministerial summit in Hong Kong from December 13-18, 2005. WTO Ministerials are held every two years to bring together trade ministers from member states, often to make political decisions for the body. Although an original goal of the Ministerial was to agree on a package of modalities (methods by which the round is negotiated) for the ongoing Doha Development Agenda (DDA) round of trade negotiations, this aim was dropped in order to avoid a high-profile failure similar to previous Ministerials at Cancun and Seattle. Rather, members agreed to some modest advancements in agriculture, industrial tariffs, and duty and quota-free access for least developed countries. The final outcome of these negotiations could provide a substantial boost to the world economy, but if the round itself is not completed, there may be repercussions for the WTO as an institution and for the architecture of the world trading system.

Agriculture has become the most significant challenge for the members in the negotiations. At the Ministerial, members agreed to an elimination of export subsidies by 2013. Members also agreed to a three band approach to cutting domestic support and committed to achieving specific modalities areas of tariffs and domestic support by April 30, 2006. Trade ministers agreed to use a Swiss tariff reduction formula in the non-agricultural market access talks with specific modalities to be agreed by April 30, 2006. Members also reaffirmed a commitment to completing the services negotiations. With regard to the Trade Related Aspects of Intellectual Property Agreement (TRIPS), the WTO members acted before the Ministerial to approve the final amendment of the TRIPS agreement to incorporate the 2003 Decision on access to medicines. Members also made a commitment to extend duty-free and quota-free access to all LDC products.

The outcome of the Ministerial potentially has significant implications for Congress. Any agreement resulting from the round must be approved by Congress, and there is pressure to come to an agreement well before the expiration of U.S. trade promotion authority on July 1, 2007. In addition, any agreement on agriculture may affect the drafting or necessitate the revision of the next farm bill that may be considered by Congress in 2007. Congress has also expressed an interest in shielding U.S. trade remedy laws from negotiations. This report will be updated to reflect the outcome of the Ministerial.