By March, trade negotiators will probably have gone as far as they can in crafting the outline of a new World Trade Organization agricultural deal, says Canada’s chief agriculture negotiator.
But significant gaps still will remain, Steve Verheul said.
Then, it will be up to politicians to decide if they are prepared to make the politically sensitive compromises necessary to reach a new WTO deal this year.
Ministers could be called to WTO head offices in Geneva as early as late March, Verheul said.
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“We have seen real movement from some of the key players in the last few months,” he said.
“I think we are close to finishing what we can do. What will be left then is the question of ambition and it will be up to governments to decide if they are prepared to make the decisions necessary to reach a deal this year.”
Verheul said with the extent of delicate compromises still to be made in agriculture and other nonagricultural files, the odds against a deal in 2008 or even within the next several years are high.
However, he said positive developments have been made recently for those hoping for a 2008 deal:
- In agricultural negotiations, considered key to progress in other areas, the United States, European Union and Japan have been signaling a willingness to compromise.
- Agreement gaps in technical details have been closing as negotiators find ways to prepare the ground for political decisions.
- American negotiators have been signaling that the administration of U.S. president George Bush would in its final year like to present a WTO deal this year to Congress as part of his legacy, even if it will not make it through Congress before November elections that could return a more protectionist Democratic majority.
“We certainly have seen more flexibility and compromise in the past few months from the Americans than we saw through earlier years of the negotiation,” Verheul said.
However, there are real questions about whether governments will be willing to make the necessary compromises to forge a deal on export rules, domestic subsidy levels and permissible levels of imports into import-sensitive sectors such as Canada’s dairy and poultry industries.
And if politicians miraculously break the agricultural logjam through compromise, will deals be possible on nonagricultural product import rules, government procurement standards, rules on how to calculate subsidies and all the other areas of contention?
“I still think it is a long shot but who knows,” Verheul said. “The dynamic is there and an end to the agricultural impasse could create momentum. Who knows?”
To end the agricultural impasse, Canada will have to decide whether to accept a large majority WTO opinion in favour of watering down supply management protections, something Canadian governments, both Liberal or Conservative, have vowed to oppose.
It also will have to deal with American and European insistence that any deal on ending export subsidies by 2013 include an end to the right of state trading enterprises such as the Canadian Wheat Board to operate behind a government-mandated trade monopoly power.
“We are reaching the point where we have done our work and political decisions will be required if a deal is to be struck,” Verheul said.
