Four key World Trade Organization players failed last week to unblock the logjam that has stalled negotiations for years, casting further doubt on the prospect of a successful WTO deal this year.
One prominent Canadian trade consultant told parliamentarians last week that is not such a bad thing.
Peter Clark of Grey, Clark, Shih and Associates of Ottawa sent an analysis to MPs and senators arguing that the proposals now on the WTO table would be bad for Canadian agriculture. Exporters will gain little in access to foreign markets while import-sensitive sectors like dairy would be undermined.
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“There will be little in a salable potential package to benefit Canadian farmers and ranchers,” he wrote. “Canada needs to engage as a matter of the highest priority in preventing erosion of market access through negotiation of preferential arrangements with countries which have Canada outside looking in.”
Clark said proposals tabled by WTO agriculture negotiations chair Crawford Falconer would hurt rather than help Canadian interests and he questioned Canada’s traditional blind faith that trade liberalization benefits all.
“There would be serious costs to Canada and few gains in export access,” he said. “Canada will be a net-net loser in this exercise …. It treats Canadian interests in an unfavourable way.”
Meanwhile, the prospect of a WTO deal diminished last week when ministers from the so-called G4 – the United States, European Union, Brazil and India – ended what was to be a three day negotiation after just one day.
India said it was because the U.S. would not expand its offer to cut farm supports. Falconer’s proposal would allow the U.S. to increase trade and production distorting subsidies and the U.S. is proposing more than he suggested.
U.S. representatives blamed the Indians and Brazilians for refusing to offer more market access to manufactured goods from America and Europe.
The U.S. and EU were flexible, U.S. agriculture secretary Mike Johanns told a June 21 news conference.
“And yet we had two ministers who literally hadn’t moved an iota from a point that started nearly two years ago, showed no sign of flexibility and in the end we were literally faced with a situation where they basically said, ‘you keep putting out proposals, we’ll keep reacting to it, we don’t know if this is going to work,’ ” he said. “We stretched and it just seemed to me that they grabbed.”
In Geneva, WTO director general Pascal Lamy insisted the G4 fiasco does not mark another breakdown in the talks. He said he will continue to try to forge agreement among all 150 members this summer.
U.S. trade representative Susan Schwab sounded a similar note.
“The G4 may not ever be able to reach closure but that certainly does not mean the end of the round,” she told reporters. “I look forward to going to Geneva at some point to engage with the negotiating chairs, with like-minded countries, developed and developing countries that want to see a successful ambitious end to this round.”
Clark told MPs and senators on agriculture and trade committees that if a version of Falconer’s proposals on sensitive products made it into a final deal, it would hurt Canadian dairy and poultry farmers.
“It would appear that effective supply management systems would not be possible based on Falconer’s approach to sensitive products,” he said.
