While proposals at World Trade Organization talks last week from the United States and the European Union were hailed as momentum-injecting developments, a Canadian farm leader is warning against giving those two trading superpowers too much of a leadership role.
Canadian Federation of Agriculture president Bob Friesen recalled Oct. 17 that in 1993, the U.S. and EU reached a deal that was favourable to them and then sold it to other WTO countries as a take-it-or-leave-it proposition to end the seven-year Uruguay round of talks.
Most analysis of the deal says it produced little benefit for Canadian farmers.
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This time, the two giants again are being looked to for leadership, often in collaboration with Brazil, India and Australia – the so-called five interested parties.
Canada’s WTO position is not well articulated or supported by any of those countries.
“The last thing we need is too much American and EU leadership,” Friesen said during a webcast organized by the Canadian Farm Business Management Council.
He said Canada has to remain vigilant to be involved in all meetings on a potential new WTO deal.
India and Brazil are part of the group of five because they are key agricultural players in the developing world. Australia is chair of the Cairns Group of middle-sized trading countries and while Canada is a founding member of Cairns, it has parted company with the group over some of its more radical trade liberalization and subsidy cutting policies.
Friesen said the proposals presented last week by the U.S. and EU repeat the pattern of 1993.
They would preserve many of the trade and subsidy advantages those countries now enjoy, while offering little to others.
But in both the U.S. and the EU, last week’s proposals provoked political warnings that they are moving too far for their own constituencies.
In Washington, the chairs of the Senate and House of Representatives agriculture committees sent a joint letter to U.S. trade representative Rob Portman warning him that Congress will not support any deal that the politicians think does not give American farmers an advantage.
“We believe that an agreement that genuinely results in a more market-driven international trading system would be good for the United States and the rest of the world,” senator Saxby Chambliss and representative Bob Goodlatte wrote.
“Unfortunately, it appears that some of our trading partners are asking for a lot while offering very little.”
They told Portman that Congress will support a deal only if other countries make significant concessions, including the Canadian Wheat Board monopoly issue.
“A WTO agreement must eliminate export subsidies and unfair activities of state trading enterprises by an early date while permitting the operation of legitimate food aid,” they wrote.
Meanwhile, European trade commissioner Peter Mandelson and agriculture commissioner Mariann Fischer Boel were facing criticism for proposing sharp cuts in EU subsidies and some reduction on import barriers in return for concessions by other countries.
A majority of EU member countries, led by France, sent a letter warning that the European Commission should not go beyond “red lines” that member states have drawn on market access and export subsidy concessions.
