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Speech by SCIT at Asia Society luncheon (English only)

    Following is a speech (English only) by the Secretary for Commerce, Industry and Technology, Mr John Tsang, at a luncheon organised by the Asia Society Hong Kong Centre today (January 6):

Mr Chairman, distinguished guests, ladies and gentlemen,

     Thank you, Ronnie, for those warm words of introduction. I feel privileged to be invited here today to take my place on the podium of this distinguished organisation that does so much for our region on the international stage.

     I must confess, not yet a week into the New Year, that the year 2006 carries a special meaning for me. For quite some time now, I have been thinking about, and talking about the year 2006. I've repeated it like a mantra in meetings, in speeches, in interviews and in every day conversation. Like Queen Mary who had the word "Calais" engraved on her heart, I think if they looked into mine they would find the four magic numbers 2-0-0-6.

     The reason is that 2006 íV to be precise the end of 2006 íV is the final deadline for completing the Doha Round of multilateral trade negotiations, which took over my life 18 months ago, and which still figures prominently in my thoughts today, two and a half weeks after we successfully concluded the Sixth Ministerial Conference of the World Trade Organisation here in Hong Kong.

     That conference was an important milestone on the way to completing the round, which is known as the Doha Development Agenda because of its aim to level the playing field of world trade for developing countries, and for the poorer economies, which still struggle to provide more than survival living for millions of their citizens.

     The end of this year is a real deadline for a simple reason. The United States Trade Representative, Rob Portman, must take whatever comes out of this package to Congress for an up or down, yes or no, vote before President Bush's so-called fast-track authority expires in the middle of 2007. If that deadline passes, that is the end of the game, because nobody believes Congress in its present mood will approve a renewal. And no country is willing to allow the US Congress to tinker with the contents of that agreement. Moreover, given the US electoral cycle, and the likely priorities of a new President, the probability is that we won't see another fast track in Congress for another five to 10 years.

     That is one reason why our Chief Executive, Mr Donald Tsang, said at the opening of the Hong Kong Ministerial Conference that Doha represents a once-in-a-generation opportunity to do some real good for the world. Whatever the outcome at the end of 2006, we in Hong Kong can genuinely raise our collective hand and say that we have played our part, a pivotal part, in trying to achieve a laudable result.

     Let me recap for a moment. Looking behind the headlines about protests, and the whiff of tear gas, there was a lot going on inside the Convention and Exhibition Centre in mid-December.  For more than 100 pretty gruelling hours, the leading diplomats and statesmen of world trade were locked in tense, difficult and occasionally volatile and acrimonious negotiations.

     For the last 48 hours, these talks went on almost non-stop, lasting until dawn or up to brunch time. As host, I chaired all of these meetings. And, in tandem with the Director-General of the WTO, Mr Pascal Lamy, it was my job to keep people talking and listening, giving and taking, bargaining and compromising, even when they were on the verge of breaking down and also when it was obvious they wanted to go to bed and get some sleep. Some fellow Ministers had even criticised me for trying to employ the strategy of wearing them out. The task of getting agreement out of the 149, now 150 members of this organisation, has been likened to rounding up cats!

     In the end, all the hard work paid off, and we came away with what the New York Times correspondent described as "a surprisingly broad document calling for changes in everything from European agricultural export subsidies to industrialised countries' tariffs on exports from countries like Bangladesh and Zambia".

     That is quite a neat summary of the Hong Kong Declaration, as the Ministerial Declaration that emerged from our meeting is now known. I am pleased to say that the Hong Kong Declaration is a phrase that carries a positive ring in world trade circles from now on.

     I can say now that there were times íV many times íV when it looked as though we might not emerge with any document at all. Or come up with one so mean and lean that it would have been seen as little more than a flimsy fig leaf. Or something that captured the fact that we had merely met. But in the end, statesmanship prevailed over brinkmanship, and we produced a package worthy of Hong Kong's good name in world trade.

     Briefly, on top of the substantial draft document that was agreed in Geneva prior to the Hong Kong meeting, Members agreed to a phased withdrawal of agricultural export subsides by 2013; detailed a package as duty free quota free measures for 32 of the poorest countries; and made commitments íV from the US in particular íV to help 10 million African cotton growers by eliminating subsidies to their own cotton-growing industry by the end of this year.

     As I said at the time, the Hong Kong Declaration was a clear win for development. That was particularly pleasing for me as chairman, for as long ago as last March I started putting together the framework containing a number of development issues that I thought should be achieved, no matter what Hong Kong might produce on the big ticket items of agriculture, industrial tariffs and services.

      Frankly, we always knew that agriculture was going to be the hardest nut to crack, and it proved to be so. The EU simply did not come up with a sufficiently attractive offer after the Americans placed a particularly bold and encouraging package on the table in Zurich in October. And progress in industrial tariffs and services was always linked to progress in agriculture, no matter what the EU persistently argued.

     So the development issues assumed greater importance as we moved into the Ministerial last month. And, along with the commitment to phase out all agricultural export subsidies, and some useful movement on industrial tariffs and services, we produced the goods on the various development issues in Hong Kong. To be honest, we did better than I íV and many others íV had expected.

     At the closing press conference, I was confident enough to say that we had pulled a rabbit out of the hat. Now some, but not all, commentators and editorialists in the international media have since suggested that the outcome was so modest that my rabbit would look pretty scrawny. Maybe. Maybe not.

     The fact is that in the arcane world of international trade negotiations, progress comes slowly and tends to move in measured steps which increase by orders of magnitude towards the end. But ambition is the main thing, and the Hong Kong Declaration, in Pascal Lamy's words, has reawakened the Doha Round after a long period of hibernation. As he said, the Doha Development Agenda is now back on track, and those of us involved in it have a brief moment in time to bring home the bacon.

     We have set ourselves a target date of end April to unlock the shackles of agriculture and the related issues of industrial tariffs and services so that we can put some real meat on the bones of the Hong Kong Declaration. Given the US trade deficit, the political landscape in Europe and, for that matter, Japan, the task is formidable.

     But we will not overcome the problems by throwing in the towel before the fight begins. The pressure remains on the EU, in particular, to show the leadership on agriculture to give us the tail wind we need to bring SS Doha safely into port by the end of the year. This is the story of Cinderella Man.

      If we don't, the outlook for the WTO and the future of the multilateral trading system will be imperiled. That would not be good for the world. It would mean an accelerating move towards bilateral trade deals which, as the Financial Times noted in a recent editorial, promise much but deliver confusion and trade discrimination. I thoroughly agree with that assessment.

     Closer to home, a weakening of the WTO and multilateralism would be bad news for Hong Kong. We are unashamed and ardent champions of the multilateral trading system. As a free market, free trade economy, Hong Kong has benefited enormously from the prosperity which has resulted from trade liberalisation over recent decades. You only have to look around you to see the evidence of that. But I preach to the converted íV we are all here today the spiritual sons and daughters of Adam Smith.

     Indeed, it was our commitment to the WTO and the multilateral system which was a major factor in us bidding to host this conference. Some people thought we had taken leave of our senses in doing so. They pointed to the violence and failure of Seattle and Cancun.

     But, to borrow from the title of that bluish movie, we didn't go into this with our eyes wide shut. We knew the risks. We recognised the downsides. But Hong Kong has not got where it is today by shirking our responsibilities or ducking a challenge.

      We were determined to demonstrate our competence as a world city íV Asia's world city íV by tackling whatever challenges the conference threw up at us, both inside and outside the venue. As an icon of free trade and an unconditional supporter of the WTO, we were determined to discharge our responsibilities as a world citizen in support of the multilateral trading system. And, finally, we wanted to show the world what free trade has done for Hong Kong íV President Clinton's famous Exhibit A in the case for global inter-dependence and its benefits.

     And I believe that our police force showed what a thoroughly professional organisation they are, while our long experience as trade negotiators - and we have always punched above our weight in trade negotiations íV helped us get results inside the negotiating chamber.

     At the end of the day, what is the score card? It is not for me to mark it, but if the opinion of the 6,000 delegates, 2,000 NGO members and 3,000 media count for anything, I would suggest in a most un-Confucian manner that Hong Kong came out with flying colours. I certainly heard it suggested more than once that given the standard that we were able to achieve in the Hong Kong Conference, who would now have the courage to take up the baton and run the next leg.

     So was it worth it? The answer has got to be a resounding "yes". We are a community of risk takers íV that's what gives us our "can do" spirit íV and I think we would have regretted not taking this opportunity to show what Hong Kong can do. From a purely self-interested point of view, we have enhanced our reputation as a great world city, and shown to our own community that Hong Kong still has what it takes to play in the big league.

     But I think there is a bigger prize here. By shouldering our responsibilities as a global citizen, and by taking up the mantle for the poorest citizens on our planet, I believe Hong Kong has demonstrated a maturity and a concern for others that will be remembered and recognised well beyond the afterglow of this very successful WTO Ministerial Conference.

     Thank you.

Ends/Friday, January 6, 2006
Issued at HKT 15:08


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