More than four years after they were launched, World Trade Organization negotiations collapsed July 24 in a welter of finger pointing and Canadian warnings that trade wars, more subsidy competition and higher market barriers will be the consequence.
WTO observers and players suggest there is little chance the negotiations, launched in 2001 in Doha, Qatar, will be re-launched until at least 2008 after the next United States presidential election.
After failure during a weekend meeting among key negotiators to close gaps on agricultural subsidies and market access barriers, WTO director general Pascal Lamy announced the inevitable on July 24.
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“Faced with this persistent impasse, I believe that the only course of action I can recommend is to suspend the negotiations across the round as a whole to enable the serious reflection by participants that is clearly necessary,” he told a hastily convened WTO meeting in Geneva. “Time out (is needed) to review the situation, examine available options and review positions.”
The European Union blamed the United States for not making a better offer on reducing domestic subsidies. The U.S. blamed the EU for not offering more market access.
Canadians fretted and hoped for a resumption in talks.
“Although this is a serious setback, Canada remains committed to pursuing opportunities and seeking a fairer international trade environment for our agricultural producers and processors,” agriculture minister Chuck Strahl said in a joint statement with trade minister David Emerson late July 24.
The Canadian Agri-Food Trade Alliance, an aggressive trade liberalization lobby, was not hopeful.
“The consequences of this are all bad,” said Saskatchewan farmer and Agricore United board member Alanna Koch, vice-president of CAFTA. “There is no good that will come of this.”
In a July 24 interview, she predicted more trade disputes, higher subsidies, a resumption of export subsidies and a breakdown in trade relations.
“I really think we are in for some trade chaos,” she said.
Canadian Federation of Agriculture president Bob Friesen was more sanguine in his reaction.
He said the CFA had hoped for a deal that would open foreign markets, reduce foreign subsidies and still preserve Canadian marketing systems such as supply management. But there was a danger that in a rush for a deal, supply management over-quota tariffs could have been sacrificed.
“We have always said no deal is better than a bad deal so I think this gives us time to get a better deal,” he said July 24. “I don’t believe we will sink into trade chaos. I expect things will stay more or less as they are.”
Chief Canadian agriculture negotiator Steve Verheul said in an interview there is a danger that the breakdown in talks will lead to more trade dispute challenges against the United States, followed by a U.S. tendency to ignore trade judgments that would force them to dismantle farm programs, which in turn could lead to trade retaliation against the U.S.
“I do think there is a danger that we will head into that scenario,” he said. “Without talks and concessions from others, will the U.S. be willing to see some of its programs unravel?”
