VANCOUVER – The global financial meltdown could be the galvanizing force needed to get World Trade Organization talks back on track, says a proponent of the deal.
Darcy Davis, president of the Canadian Agri-Food Trade Alliance, said there are rumblings out of Washington that world leaders are beginning to see the Doha round of the WTO as a possible way out of the darkness.
Last week, leaders of the G20 group of rich and emerging economies agreed to try to resuscitate the stalled deal by the end of the year in an effort to kick-start the global economy.
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“If they want to use this as a solution to the economic crisis, it could move ahead fairly quickly,” said Davis.
He told delegates attending the Canada Grains Council semi-annual meeting that there are also some disturbing vibes coming out of Washington.
“Some of the rhetoric that (U.S. president-elect) Barack Obama was using is pretty disconcerting,” he said.
During the election campaign it became clear Obama was not a strong supporter of free trade agreements and he raised the specter of re-examining the North American Free Trade Agreement.
Outgoing president George Bush, meanwhile, has made considerable concessions in an effort to stitch together a WTO deal.
“The Bush administration would like to move ahead with the deal. The $14.5 billion they offered on domestic supports is very serious,” Davis said during an interview following his presentation.
Despite the Obama rhetoric, Davis said he can’t see the U.S. shifting directions and backing away from a free trade agenda.
“(Trade) is just too big a driver of the American economy for them to go back to protectionism.”
Davis said it will be interesting to see how the Obama administration juggles funding of the lucrative 2008 U.S. farm bill during a time when money is pouring out of government coffers to prop up the financial sector.
CAFTA will also keep close eye on the Indian election coming up in May. The country has become a leading voice for the developing world in WTO discussions.
“How they go forward in the negotiations is important,” said Davis.
India has a parliamentary system similar to Canada’s with the potential for the formation of a coalition government in which the anti-trade Communist party could play a big role.
Davis told delegates a WTO deal offers farmers more than bilateral trade agreements because in addition to reducing tariffs, it tackles domestic supports and export subsidies that eat away at farmer profits.
Over 90 percent of Canadian farms produce commodities for export and exports make up 78 percent of annual farm receipts.
The association has calculated that if the Doha deal were implemented, it would increase Canadian farm receipts by $3 billion annually.
“We need to get this deal done,” said Davis.
