Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance International and Trade – II - Question Paper

The 6 days of the WTO Ministerial Conference held in Hong Kong were not free from brouhahas. There were several problems. a few of them had positive implications whereas a few of the results were shrouded in uncanny ambiguities. The biggest success that emerged out of the discussion was the concerted decision that 1 would not sacrifice the Doha Round at the cost of minimal national economic interests. Further there was also agreement on the fact that all the developed countries arrived at pertaining to the ending of all export subsidies by the end of 2013 and to start the process of substantial reduction before that period, though the developing nations preferred a timeline of 2010. This was added to the removal of the cotton subsidies by the next year. Cotton exports from the lowest Developed Countries (LDC) were allowed into the developed countries with zero duty. But, it is also to be remembered that the dumping of subsidized cotton would continue on in days to come. 1 more important aspect of the discussion hovered around the aspect of the LDCs struggling hard to allow all their products to enter the markets of the rich countries free of duties and quotas.

At the identical time, it is worth mentioning that the meeting also had its share of certain negative aspects. A closer look at the declaration will reveal the fact that there lies no finality about the schedules pertaining to the export subsidies, since the identical has been made dependent on the completion of the modalities, the timeframe for which has been set as April 30, 2006. Keeping in mind that the organization has failed several times to meet its deadline, there is no certainty that this date will be conformed to. 1 school of thought postulates that the poor countries lack the capacity to export most of the products and 1 of the clauses namely the escape clause facilitates the rich countries to block the imports of the products that the poor countries obtain competent to produce. The US feels apprehensive of the cheap textiles and the clothing from Bangladesh, and Japan feels jittery about the cheap rice from Cambodia. The result of the six-day conference also gave certain setbacks to the developing countries. The draft declaration requires these countries to participate in the new kind of negotiations in the WTO that are designed primarily by the rich countries.

Keeping aside the positives and the negative results of the meeting, the case for the lowest Developing Countries (LDCs) is comparable to providing people with money to buy their coffins. As rightly quoted by an activist "the outcomes of the meeting has been a way to facilitate the countries to get into the trade agreements and calling it aid or developmental packages, it is more like moving forward the trade agenda that is about trade and not development". Well, whatever may be the viewpoints of the critics, the plan chalked out by the members is believed to benefit at lowest 50 LDCs in Africa, the Caribbean and the Pacific region. These countries mainly export agricultural products like bananas, sugar and tea. The so-called developmental package includes the "quota-free and duty-free" access for all the 50 LDCs to markets in rich nations by 2008.

Earning:   Approval pending.