Industry shares Ritz’s pessimism on WTO

Grain sector officials say the ag minister is saying publicly what others have been saying privately

Canada’s agriculture minister has abandoned all hope for completion of the Doha round of World Trade Organization negotiations.

“I don’t think I’ll see it in my lifetime,” said Gerry Ritz.

“I’ve been to too many meetings where everybody talks a good deal but nobody moves, nobody does anything.”

He said it will be impossible to forge a deal when all 160 members of the WTO have the power to block a potential pact, noting that India recently scuttled implementation of a trade facilitation agreement.

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“Everybody has a veto. You’re never going to get agreement,” said Ritz.

The minister’s pessimism comes as no surprise to Bryan Rogers, executive director of Grain Growers of Canada.

“He’s just voicing publicly what many stakeholders have been saying privately for a long time,” he said.

“You talk to pretty much any trade association in Ottawa and they would tell you the same thing, and they’ve been saying the same thing for months. The prospects for a deal are pretty bleak and have been for some time.”

Ron Bonnett, president of the Canadian Federation of Agriculture, agreed with Ritz that nothing ever gets accomplished at the WTO negotiations.

“That’s why you’re seeing all these countries heading into bilateral discussions,” he said.

The problem with bilateral and multilateral agreements is that they deal with market access issues but ignore trade-distorting government subsidies.

The WTO may have rules on subsidies, but a new study commissioned by U.S. Wheat Associates found that countries don’t necessarily follow those rules. Countries such as India and China have exceeded their allowable Aggregate Measure of Support levels established under the Uruguay WTO agreement by $36 to $110 billion over the past two crop years.

Bonnett still believes a WTO deal would benefit Canadian farmers who are heavily dependent on export markets.

“The best thing they could do now is have a discussion about how to negotiate,” he said. “Do you need everyone on (board) to still get a deal?”

Ritz said any future WTO deal would likely be futile anyway because the issues the members are trying to resolve are no longer pertinent.

“The day that you finally get that (Doha) round completed, it’s 20 years out of date, so why (do) we bother?” he said.

Countries that were struggling when the negotiations began are now thriving, so the text that negotiators have been working on for so long is meaningless.

“Part of the problem is you can’t have an open-ended deal that allows so-called developing nations to be developing nations in perpetuity,” said Ritz.

“I mean, Brazil outperforms all of us and yet they’re considered a developing nation, so they get a certain level of carrots and no sticks that the rest of us get.”

He said the WTO operates under the outdated mindset that food security is accomplished by making every little country self-sufficient. He believes the real answer is trade.

“What we have to do is look at the strengths of every country as to what to produce and not duplicate it simply because we can,” he said.

“If we’re the masters of growing wheat, then we become the masters of growing wheat and every little African nation can grow something else.”

Bonnett said the WTO still has an important role to play, even if its members can’t agree on a new trade pact. The WTO’s dispute settlement mechanism is the only way to take a country to task for violating international rules.

“We’ve been very successful when we’ve gone there, like country-of-origin labeling issues,” he said.