After six days (13 - 18 December 2005) of intensive negotiations, ministers from the WTO's 149 member governments approved a declaration that many described as significant progress from the July 2004 package. Five main achievements/agreements were reached in this meeting, namely (i) an end date for all export subsidies in agriculture; (ii) an agreement on cotton; (iii) solid duty-free, quota-free access for the 32 least-developed country members; (iv) a significant framework for full modalities in agriculture and non-agricultural market access; and (v) an agreement on services.

Among these agreements, the first three can be expected to have a positive impact on poverty alleviation, which Green (2005) termed as “the least worst” part of the results taken as a whole. The agreement to end export subsidies in agriculture by 2013 was only reached at the last minute. The elimination of export subsidies has been a recurrent problem, mostly opposed by developed countries, in particular the European Union. High subsidies in developed countries', amounting to US$ 318 billion per year (World Bank, 2003), have created an unfair playing ground for most developing countries (Abbot, 2003; Madeley, 2004; Twyford, 2003). Many delegations welcomed the agreement on 2013 as the deadline for eliminating agricultural export subsidies, although most of them showed preference for an earlier date.

Elimination of export subsidies will encourage a better trade environment for developing countries to expand their agricultural sectors, including some Asian and Pacific countries. As stated by Rahman (2004), growth in agriculture is essential for poverty reduction since for every dollar spent on agriculture, another two dollars is generated for a developing country's national economy. Furthermore, history has demonstrated that agricultural development can generate higher incomes, which lead to savings and investments, and finally to abate poverty.

In terms of cotton, the elimination of export subsidies has been accelerated to the end of 2006. In addition, cotton exports from least-developed countries will be allowed into developed countries without duty or quotas from the start of the period for implementing the new agriculture agreement. Moreover, it was also agreed to cut trade-distorting domestic subsidies on cotton by more than would normally apply under the new agreement, and to do so more quickly (WTO, 2005). This will create a better trade environment for cotton producing countries; mainly African countries (Green, 2005).

Agreement on solid duty-free and quota-free access for the 32 least-developed country (LDC) members again indicates that the heart of the negotiation intends to benefit LDCs. This agreement will give wider and more direct access for LDCs' products to developed countries' markets. This may be an effective avenue to reduce poverty in rural areas because around 2.5 billion people in the developing world depend on agriculture for their livelihoods (Green, 2005; FAO, 2005).

Although the commitments indicate positive signs toward poverty alleviation in developing countries and LDCs, we should not expect this to be automatically realized. The long history of trade negotiations teaches us that there are at least two main obstacles on the ground. Firstly, when the general platforms and political commitments have been agreed, there are always long discussions and debates to translate them into real policies or actions. Secondly, almost all countries, especially developed countries, have tricks up their sleeves to minimize the negative impacts of agreements on their protected sector (agriculture). They look to sacrifice some of their interests, but by using other rules under the WTO umbrella, they can compensate their losses. For example, a country can eliminate export subsidies, but at the same time, increase their domestic support through the green box, which does not entail limits for subsidies (Green, 2005). Similarly, export subsidies can be hidden under various forms such as subsidies on credit, food aid, or sales of exporting state enterprises.

To conclude, the Hong Kong Ministerial Meeting came with some positive results in the development issues of the poor. Some believe that these results have been a rebalancing in favour of developing countries. The task at hand now is to translate these political commitments into policy instruments and actions that will really benefit the poor.

Written by Wayan R. Susila, UNESCAP-CAPSA, Bogor, Indonesia.

(References available upon request)