Are WTO talks nearing their final gasp or is there yet hope for a deal?
Western Producer reporter Barry Wilson travelled to Geneva recently to see what key players are saying.
GENEVA – The world trade deal that trade and agriculture ministers will accept or reject at the end of July represents potential wins and losses for Canadian farmers.
Under the umbrella of the three World Trade Organization categories to be negotiated July 21-25, these are Canada’s stakes:
- Domestic support: Ministers will debate a formula that reduces the levels of allowable domestic support by up to 85 percent and sets a benchmark of allowable support in the United States of $13 to $16.5 billion (US) compared to $48 billion now allowed.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Canada would see its ability to spend money on domestic supports such as crop insurance and stabilization fall to a maximum of $4.5 billion from $8.6 billion over the implementation period.
- Export competition: Export subsidies would be eliminated by 2013, and rules governing use of export credits and food aid would be tightened.
The European Union and the U.S. are pushing for an end to state trading export monopolies by 2013, which Australia, New Zealand and Canada oppose. Even though Canada’s Conservative government wants to end the Canadian Wheat Board’s export monopoly, it says it wants to accomplish it domestically rather than be ordered to do so by the WTO.
WTO officials say it will be one of the last political decisions made at the negotiation.
- Market access: The proposed deal calls for significant cuts in import tariffs that Canada’s exporters, represented by the Canadian Agri-Food Trade Alliance, say represent sales opportunities of at least $3 billion annually into foreign markets.
Canada’s supply managed sectors would face reduced tariff protections for dairy, poultry and egg industries by at least 23 percent as well as significant increases in guaranteed imports through tariff rate quotas (TRQ) at lower tariff rates.
Proposals for increases in guaranteed TRQ access range from four to six percent of domestic consumption on top of import access already available.
The result would be lower domestic prices and less predictability in a price-and-production control system that depends on accurate predictions of how much supply is in the domestic market.
However, because the Canadian government officially refuses to contemplate over-quota tariff reductions or TRQ expansion, Ottawa has refused to provide the WTO with domestic consumption figures that would indicate how much of the domestic market Canada would have to concede to imports.
The other five major importing regions, including the U.S., the European Union, Japan and Switzerland, have provided their domestic consumption numbers in anticipation of increased access based on the formula.
WTO officials have noted that Canadian negotiator Steve Verheul was instrumental in designing the formula for calculating domestic consumption and appropriate over-quota tariff cuts, but Canada is refusing to accept either of them.
