When World Trade Organization talks collapsed in Geneva last week, the main reason cited was a refusal by India and China to accept restrictions on their ability to use temporary tariffs to limit surges in the amount of food imports.
But there were many other contentious issues that had not been resolved and that could have been deal breakers.
The broad “convergence” that WTO director general Pascal Lamy claimed existed was actually a consensus by seven countries that had been selected to try to create a core agreement – the United States, the European Union, Japan, India, China, Brazil and Australia.
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Their “consensus” on issues such as the end of state trading enterprise monopoly powers or tariff cuts for sensitive products had not been approved by the ministers of at least 20 other countries, including Canada, for whom many of the G7 conclusions would be contentious.
The consensus also had not gone before another 120 other WTO members whose ministers were not invited by Lamy to be part of the select negotiating group. Their exclusion left many smaller countries angry.
Under WTO rules, any one of the 153 countries can kill a deal by voting against it.
Canadian agriculture minister Gerry Ritz dodged the question when asked whether Canada would have accepted a deal among the G7 that included a 24 percent cut in supply management over-quota tariffs, a doubling of guaranteed market access for imports into those dairy, poultry and egg sectors and an end to the Canadian Wheat Board monopoly by 2013.
Those issues did not come up for decision, he told a news conference.
Canada had continued to insist that supply management protections not be reduced and that the CWB monopoly is a domestic issue.
“But when you cannot get the major trading block in the world to agree, it really doesn’t matter what the rest of us do or don’t because the deal is still going to fall on their issues,” said Ritz.
Toronto trade lawyer Lawrence Herman agreed that pinning all the blame on India, China and the special safeguards mechanism, which would allow tariff hikes to counter import surges, over simplifies a complicated failure.
“I think as the SSM issue emerged, it became a lightning rod for the dispute between China, India and the developed countries,” he said July 30. “But there were many, many other issues that had not been resolved and that could have been trouble.”
Among them was the fact that the U.S. and EU were resisting demands that they sharply lower cotton subsidies, an issue that Lamy himself had said would have to be part of any final deal.
But in the end, Lamy talked as if a deal could not be achieved unless the dispute over how developing countries could protect against food import surges from developed countries had been resolved.
The view that most of the major problems had been solved allowed other countries to blame India and China.
U.S. trade representative Susan Schwab called the resistance of the two emerging trade giants “unconscionable” at a time when food price and security concerns are rising.
