After almost seven years of effort, World Trade Organization trade negotiations have collapsed raising questions about the future of the Doha Round of talks and the WTO itself.
Talks aimed at reaching a global trade deal likely will not resume until late 2009 or 2010, after the new American administration and Congress are in place. Some say the negotiations, and maybe the entire WTO process, is dead.
The collapse was triggered by India and China and centred on a developing world issue of how much tariff protection could be used to thwart sudden increases in food imports from exporters in the developed world.
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It forced WTO director general Pascal Lamy to declare July 29, “there is no escaping that this meeting has failed.”
It also allowed Canadian trade minister Michael Fortier and agriculture minister Gerry Ritz to dodge the bullet of how to deal with the politically sensitive issue of supply management protections.
Fortier said Canada was not prepared to deviate from its “no compromise” position, aimed at maintaining the high tariff and quota system that protects the supply-managed dairy, poultry and egg industries.
Reaction to the WTO failure was mixed among Canadian farm groups.
Canadian export sector lobbyists in Geneva said they were convinced Canada would have compromised if it had been forced to vote.
“Ministers told us they supported the process so how could they support the process of reducing trade barriers and still support maintaining barriers if the rest of the world was against them?” asked Alberta cattle producer and Canadian Agri-Food Trade Alliance (CAFTA) president Darcy Davis.
Canadian exporters said much was lost by the collapse of talks, including a key promise by the United States to sharply cut domestic farm subsidies and a commitment by the European Union to substantially increase market access.
CAFTA said a deal could have offered Canadian exporters access to compete for new foreign markets worth as much as $3 billion.
Canadian Pork Council president Jurgen Preugschas from Mayerthorpe, Alta., said his sector was particularly hurt by the collapse. EU access offers would have made possible new exports amounting to as much as 200,000 tonnes of product.
“It would be a high-end market and we would have been a prime supplier,” he said. “I’m not sure any sector was as damaged by this as us.”
Supply management leaders were quietly breathing a sigh of relief.
Dairy Farmers of Canada president Jacques Laforge said supply management leaders were relieved that Canadian ministers did not have to make a final decision on the issue, despite their steadfast promise to support supply management.
There had been growing indications that Canadian ministers would not reject a deal that benefitted the Canadian economy at the expense of supply-managed industries.
“I think we were relieved when it stopped and that it stopped not because of us but because of another issue,” he said.
Canadian Federation of Agriculture president Bob Friesen, representing both export and import-sensitive sectors, said it was a mixed result.
“On the one hand, I think we lost some real opportunity for our exporters and on the other hand, it would have been a bad deal for our supply managed sectors,” he said.
The deal on the table when talks collapsed also would have ended the Canadian Wheat Board monopoly by 2013, although Canada was not forced to accept or veto that proposal sponsored by the United States and the European Union and endorsed by other core negotiators at the WTO.
Despite claims by supporters of trade liberalization that a deal was close, a core group of seven countries could not agree on a deal. If they had, their agreement would have had to be embraced by all 153 members of the WTO, many with serious objections to the emerging G7 consensus.
There is overwhelming agreement that negotiations will not resume for a year or more, if ever. There are also doubts about whether new talks, if they occur, would pick up where they left off July 29 after nine days of intense negotiations.
“The fact that the ground will move so dramatically in a year or two, elections will happen, personnel will change and issues will evolve, it is highly uncertain if they can start where they left off,” said Toronto trade lawyer Lawrence Herman.
Herman called the collapse and the undermining of WTO credibility a “tragedy.”
National Farmers Union president Stewart Wells saw it a different way.
The proposals to undermine supply management and the CWB made the proposed deal a negative for farmers and should not be endorsed, he said in a letter to prime minister Stephen Harper.
