The chances of a substantive World Trade Organization agricultural deal this year evaporated last weekend with finger pointing and mistrust among key players.
Agriculture or trade ministers from more than 60 countries came to WTO headquarters in Geneva June 29 to try to close a deal that would sharply cut domestic subsidies and tariff barriers, while eventually eliminating export subsidies.
By late July 1, talks ended in stalemate over familiar issues – the United States’ refusal to offer deeper cuts to its trade-distorting domestic subsidies and the European Union refusal to offer deeper cuts to import tariffs.
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With a tight schedule looming and American negotiating authority due to expire in July 2007, WTO director general Pascal Lamy said he will try to bridge in two weeks the gaps that have separated the major players for four years.
If major compromises can be wrung out of Washington and Brussels by the third week in July, he will call ministers from all 149 WTO countries back to make their own compromises and sign on.
Contentious disputes between developing and developed countries would then take centre stage.
It appears to be an impossible deadline. If the talks do not collapse entirely, any chance of a deal likely will be delayed for years.
Even if a weak agricultural deal is struck to save face, negotiations on industrial goods tariff levels, services, fisheries subsidies and several other items also must be complete before there is a deal. Little work has been done on those files pending an agricultural deal.
“It is a crisis but it remains doable,” Lamy told an evening news conference July 1 after saying the previous day that failure to make progress likely would doom the talks.
Canadian agriculture minister Chuck Strahl, for one, is not committing himself to another July visit to Geneva.
“The chances of something happening now are slim,” Strahl said July 2. “It’s still possible but the logjam is very real and it involves market access and domestic support. I fear the iron is not hot anymore. I don’t sense the same dynamic that forced it last time. They had to do something.”
Reaction from Canadian agricultural lobbies to the stalemate was mixed.
Ontario farmer Liam McCreary, president of the Canadian Agri-Food Trade Alliance representing both farm and agribusiness exporters, said the failure was devastating.
“We definitely have a crisis on our hands and CAFTA and its members are very scared that no progress is being made,” he said July 1.
McCreary was one of more than 70 Canadian industry lobbyists, provincial ministers and federal and provincial officials who spent at least five days in expensive Geneva watching nothing happen.
“For us, not getting a deal is not an option,” he said.
Supply management officials who feared a deal would come at the cost of losing some of their import protection seemed relieved.
“Supply management can do nothing but lose in this trade round so from that aspect, the fact that there’s no deal at least for another period of time, recognizing that parts of Canada want a deal and there must be some frustration,” said Ontario dairy farmer Bruce Saunders, vice-president of Dairy Farmers of Canada.
“My personal view is I’d far rather have the complete deal that recognizes what everyone wants than what I might describe as a bad deal that is, ‘let’s sign something and get out of here.’ My fear, if you went that route, is that those who need special attention, like supply management, might not get it.”
Canadian Federation of Agriculture president Bob Friesen said missing the July deadline is not the end of the world. It is better to take time to get a good deal than to settle for a flawed one.
“We need an agreement but we also need an agreement that works for Canada and if the delay gives us an opportunity to build more allies, maybe we can still accomplish something.”
