World Trade Organization negotiators, along with some trade ministers, are in Paris this week trying to break a negotiating deadlock that is threatening to scuttle hopes for progress by the end of July.
Steve Verheul, Canada’s chief agricultural negotiator, said in a May 2 interview from Paris that the main dispute is over how to convert all tariffs to a comparable basis for negotiation purposes.
“This is a very technical issue and it has been before us for two years without resolution,” he said. “But it has to be resolved before we can make any progress on market access and without that, we will not have the package ready by the end of July that we had hoped.”
Read Also
USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
The Paris meeting is an attempt to find a political compromise to break the deadlock. Since Canada’s trade minister Jim Peterson is not attending the meeting, Canada will be on the sidelines of the discussions.
Verheul said agriculture negotiating committee chair Tim Groser from New Zealand has set a goal of creating a “first approximations” framework by the end of July that would contain the elements of a deal in all three key negotiating areas Ñ domestic support, market access and export competition.
“That would give ministers and governments an outline of where political decisions and compromises will be needed by the time they meet in Hong Kong (in December),” he said. “Failure to get a first text by the end of July will make it that much harder in the fall to prepare the groundwork for Hong Kong.”
Verheul said some progress has been made during the past year.
On domestic support, a broad agreement has been made that the European Union would have to cut the most, the United States and Japan would face the next biggest cuts and other countries including Canada would have lower obligations.
However, delicate negotiations over how to define acceptable domestic support and discussion of actual numbers and cutting requirements “is far away yet,” said the negotiator.
On the export competition file, Verheul said there has been discussion and some early progress on the issues of food aid and government financial supports for state trading entities such as the Canadian Wheat Board.
“I think the discussion over STE monopoly issues will not happen until fall,” he said.
However, the hold-up is market access and a debate over how to convert all tariffs to a similar rate based on the price of the imported commodity. A key part of the debate is whether the tariff percentage should be applied to the world price of the commodity, the domestic price or the landed price. The European Union is the main holdout to a deal, he said.
Only after that dispute is resolved can negotiators turn to the more politically complicated issue of which tariffs to cut and by how much.
Verheul said Groser’s first approximations report must include an outline in all three areas.
“It is possible that he will produce his own proposals if we do not come to an agreement,” he said. “We’ll see.”
