HONG KONG – In the hours after a Dec. 18 World Trade Organization deal that appeared to give the Canadian Wheat Board monopoly a bit of a reprieve, CWB chair Ken Ritter was more subdued than jubilant.
“We would be na•ve not to expect the Europeans and the Americans to continue their attacks,” he said. “We have to be vigilant.”
Indeed, the six days of WTO talks last week were marked by some of the harshest European Union language yet on the issue of the CWB monopoly. The EU will continue the attacks during the next four months of negotiations in Geneva as attempts are made to draft reforms for food aid and state trading enterprises as part of a package ending export subsidies by 2013.
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The United States, while less vocal, also said through the week that the end of the monopoly remains its goal.
For the Europeans, the position appears to be part strategy, part conviction and part payback politics.
The strategic angle relates to the fact that the EU promised in 2004 to negotiate an end to the export subsidies it has used for years to get rid of surplus production that has been encouraged by high domestic subsidies. As domestic production-support subsidies fall and domestic European farmgate prices tumble toward world levels, there is less need for export subsidies.
Still, the EU must convince its farmers that the promise to end export subsidies was not a concession made without concessions in return from competitors. Targeting the wheat board as Canada’s government-supported export advantage is part of the bargaining.
As well, the Europeans insist the monopoly conveys a hidden economic advantage to Canada as a grain exporter, although they have yet to meet Canada’s demand to provide numbers to back up their assertion.
There also clearly is an element of payback in the decision to target the CWB.
The Europeans note Canada’s role in the Cairns Group, which it sees as little more than a stalking horse for the United States. They have listened for years to what some describe as “sanctimonious” Canadian criticisms of the Europeans that make it sound as if Canada is without blame.
Mandelson showed a bit of that during a news conference when he returned to the wheat board issue several moments after having been asked a question about it.
“It’s all very well for Canada to deliver lectures on export subsidies but it’s time for them to put their own house in order,” he said. “A year ago, they made a commitment on STEs (including acknowledgment that the monopoly was part of the negotiation) and since then, they have done and said nothing on the issue. Just silence.”
