CANCUN, Mexico – As delegations from close to 150 countries began to stream into this resort city, Australia’s free trade-preaching trade minister Mark Vaile warned that it could be the last chance to reform agricultural trade rules.
“The farmers in your countries need reform. They need improvement. They need change,” he told a Sept. 8 meeting of farm leaders from the Cairns Group, which was created 17 years ago by small and medium exporting countries to fight European and United States export subsidies.
“If we do not come out of Cancun with some real agreements, we will lose what I believe is the last opportunity for global trade reform,” Vaile said.
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A deal that largely leaves existing programs in place would do nothing “but lock subsidies and barriers into place. I think we have a clear choice and if we don’t succeed, I think it means the Doha Round sinks into irrelevance.”
From Sept. 10-14, members of the World Trade Organization are supposed to give political momentum to keep alive the talks that started 22 months ago in Doha, Qatar. The meeting is expected to attract as many as 10,000, including 300 Canadians, as well as thousands of demonstrators.
Canada’s primary focus is on agriculture.
At what was to be the halfway point of negotiations scheduled to end Dec. 31, 2004, negotiators remain far apart on the three key agricultural issues – domestic subsidy reductions, increased market access and ending export subsidies.
All sides have insisted if there is no deal on agriculture, there will be no deal on other items up for negotiation, from patent rights to investment rules and non-agricultural market access.
However, most players at the WTO see the issues in less black-and-white terms than the Australians.
The European Union and the United States have prepared a joint position that would lead to some limited reductions in domestic subsidies and a reduction, but not elimination, of export subsidies. They also proposed tariff reductions that are rejected by free traders as too timid and by many countries including Japan and Canada as too aggressive.
Besides undermining supply management, the EU-U.S. proposal also would eliminate the export monopoly of state trading enterprises like the Canadian Wheat Board.
Many developing countries have banded together to insist that the deal, used by the WTO to create a working text for the meeting, leaves too many rich country subsidies in place, while giving them too little access to rich markets.
Developing countries want “special treatment” that would allow them to keep import restrictions that rich countries must give up.
“There is a very complex cast of interests at play here,” a Canadian trade negotiator said last week at a background briefing. “This does not lend itself to simple solutions.”
The divisions were on display when Cairns farm leaders met. The group now counts developing countries as the majority of its 18 members and on Sept. 8, some delegates were resisting efforts by Australians to make tariff reduction and market access the primary focus.
“We have done nothing if rich countries get to keep most of their subsidies and developing countries have to open their markets to those subsidized products,” said a delegate from the Philippines.
