The Canadian government has joined 17 other small and medium-sized exporting and importing countries in calling for the rapid elimination of agricultural export subsidies.
For the first time, the Cairns group of trading countries has laid out a proposed timetable for that elimination.
The timetable proposes that export subsidies be cut in half during the first year of a new World Trade Organization deal and eliminated shortly thereafter.
The proposals were presented recently at negotiations in Geneva, Switzerland.
“There is no justification for export subsidies to continue in agriculture,” said the brief from the 18-nation Cairns group whose members include Canada, Australia, Brazil, Indonesia and Thailand.
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Only 25 of the 137 WTO member countries are still allowed to subsidize their exports under the 1994 WTO deal.
“Export subsidies are the most trade-distorting agricultural policies and damage both developed and developing countries,” the Cairns brief said. The Cairns countries are proposing that export subsidies be reduced to two base levels.
Developed countries would begin reductions from subsidy levels allowed in the year 2000. Developing countries would begin reductions from subsidy levels allowed in 2004.
The Cairns proposal also calls for strict disciplines on use of export credits, credit guarantees, insurance or food aid.
It also called for the elimination of export credits heading into last November’s WTO meeting in Seattle.
That meeting collapsed and a new round of WTO talks has yet to be launched. The next agriculture negotiations are planned for September and November.
Negotiations under way in Geneva are intended to clear the way for a new round of talks and to and prepare countries for broader talks, possibly in 2001.
Face opposition
The European Union opposes any move to eliminate export subsidies.
The United States has said it supports the idea and has not used its Export Enhancement Program for years.
Still, the Cairns proposal targets the American policy of providing grain on concessional terms.
Several years ago, Canada lost commercial wheat sales to Cairns member Indonesia when the United States provided tonnes of cereal food aid.
The Americans have tabled a WTO proposal that calls for changes to state trading enterprises such as the Canadian Wheat Board.
The U.S has also criticized EU domestic subsidies in its WTO submission, even though American farm subsidies are at record levels this year.
Canada’s position in Geneva calls for WTO members to negotiate rules allowing greater market access.
The Canadian submission encourages countries to honor access commitments on a product by product basis rather than through aggregate access.
It also suggests that tariffs should not be increased if the value of a product rises through processing.
Canadian exporters have complained that raw canola often faces a higher tariff than processed canola oil.
