WTO: Why should Hong Kong care?

To a casual observer reading only news dispatches from the government, one would wonder why Hong Kong is lifting stones only to drop at his own feet by inviting the World Trade Organisation to meet here in December.

 

1.                              Hong Kong will be hosting the Sixth Ministerial Conference (MC6) of the World Trade Organisation (WTO) in December 2005. Substantial resources, to the tune of over HK$200 million, will be devoted by the Hong Kong people to this event. At the same time, enormous expectations are placed on the outcome of the event by countries and peoples all over the world.

 

2.                              It is both the right and responsibility for Hong Kong’s civil society to articulate its views on MC6, and to make the Hong Kong public aware of the potential impact of MC6. It is not enough for Hong Kong to be only a good host to provide the venue and the hospitality, but it is essential for Hong Kong – government, business and civil society alike – to be a responsible host who is prepared to use every means within its control to achieve the most important goal of MC6: make trade work for sustainable development.

 

3.                              The stated aim of WTO is the promotion of trade liberalization. For countries around the world, especially for developing countries, trade liberalization can be a powerful tool for economic growth – a necessary condition for poverty alleviation and for enhancing quality of life. Under certain conditions, trade liberalization can have a positive impact on labour and environmental conditions through a more efficient allocation of resources and increases in productivity, leading to social development and higher wages. It can also contribute towards higher economic growth and inward investment, and create resources which can be used for environmental protection and poverty alleviation. However, none of these impacts are automatic; they depend on the design of the trade regime, the trade policies of individual states, the behaviour of the corporate sector and the choices of consumers.

 

4.                              In the Marrakech Agreement that leads to the establishment of the WTO, it is given a mandate firmly grounded on the principles of sustainable development. In no unambiguous terms, WTO’s mandate is “to raise the living standards, create employment for all and a high and growing income level in real terms, generate effective demand, growth of production, trade and services, while protecting and conserving the environment and to reinforcing the means so to do in a way that is compatible with the parties’ respective needs and concerns at the different levels of economic development’.

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5.                              Yet not all trade liberalization will lead to economic growth and not all economic growth will lead to sustainable development. Indeed, in the pursuit of trade liberalization, the disregard of the harmful effects of trade policies and trade-generated growth often works against sustainable development – worsening the plight of the poor and the disadvantaged, as well as damaging the environment and the eco-system. The average world citizen requires 2.3 global hectares to produce what he consumes every year and then to have a place to dump what’s left over. That is 40% more than is sustainable. If, through the spread of unmitigated trade liberalization, the rest of the world were to consume like the developed world, we would need the equivalent of 4 extra Earths.

 

6.                              The current trade regime adopted by the WTO has clearly failed to deliver sustainable development. The benefits of current international trade are unevenly distributed with large gains for rich countries and newly industrialized economies. Rich countries spend US$350 billion per annum on agricultural subsidy which not only prevents farmers in poor countries to increase their incomes through their own labor, but also often aggravates their poverty . Because of the noted absence of environmental sustainability in the design of the current trade regime, the current rate of extinction of plant and animal species, already 1000 times more than the background rate because of human activities, will only accelerate to the detriment of this and future generations.

 

7.                              Trade liberalization can however be re-shaped into a tool for sustainable development. The current phase of negotiation in the WTO, the Doha Round, is recognized by the international community as a “development round” with special focus on the developmental needs of developing countries. The MC 6 in Hong Kong thus presents a unique opportunity to turn the tide in favour of sustainable development. The outcome of MC6 – whether successful or not, will affect the lives of billions of people. The stakes are high in Hong Kong .

 

8.                              In its capacity as the host for MC6, the Hong Kong government has a duty not only to ensure the smooth running of the conference, but also use everything within its sphere of influence to encourage and persuade WTO members to make trade work for sustainable development. The fulfillment of the promises of this development round, including the installment of a fair trade regime and the promotion of responsible trade practices, is the single largest contribution that Hong Kong can make in the WTO negotiations, potentially for the benefit of billions of people who at present are either unable to enjoy the benefits of trade liberalization, or are suffering from its harmful effects.

 

9.                              For the business sector in Hong Kong , MC6 presents a valuable opportunity to review, rethink and re-adjust its trade practices in the context of sustainable development and corporate social responsibility. Hong Kong’s private sector, especially those in key positions of  global supply chains, should embrace the concept and the practice of responsible trade – trade practices that support international human rights, uphold dignified labour conditions, respect local culture, promote environmental responsibilities, and manage natural resources in a sustainable manner.  The leaders of the Hong Kong business community should take this chance to affirm their commitment to responsible trade.

 

10.                          Hong Kong’s civil society can play an important role by raising public awareness on the role of WTO, the inadequacies of the current trade regime, the significance of the development round, and the possibilities that may open up in MC6. Not only is it important for civil society organizations to position themselves as a constructive force in respect of the official outcome of MC6,  but it is of equal importance to promote in the local community the practice of sustainable consumption that supports responsible trade practices and a fair trade regime.

 

11.                          We call on all stakeholders alike – government, business and NGOs – to seize the opportunity of MC6 to make trade work for sustainable development. This is a rare chance for Hong Kong to live up to its claim of Asia’s world city, and for the Hong Kong public to stand up proud as global citizens.