WTO threat still far in the distance
David Spencer, Australia’s world trade minister, has warned that WTO will collapse in Mexico next September, and the EU and US will walk away and implement a plan B to go their own way and let the WTO system wither.
Although feared by EU farmers as a potential knockout punch after their recent pummelling in the CAP reform, a world trade agreement next September is unlikely, say more and more trade analysts.
They predict a repeat of the disastrous attempt in Seattle three years ago to reach an agreement.
Prospects of successful negotiations were boosted by EU agriculture ministers agreeing the CAP Reform.
But leaders of developing countries have said they are pessimistic about the chances of CAP Reform helping their farmers.
US officials welcomed the CAP Reform, but urged the EU to translate it “into meaningful WTO proposals.”
Agriculture remains the sticking point in the world trade talks, with countries missing a March 31 deadline for agreeing on the basic outline of a farm trade deal.
As the head of agriculture, fisheries and consumer affairs for the European Commission’s delegation to the United States. Irishman Gerry Kiely is at the centre of crucial talks, and he says the EU is unlikely to follow its CAP Reform with a new set of negotiating proposals at the World Trade Organisation.
He has argued that the EU’s current WTO proposal for reducing domestic farm payments, agricultural tariffs and export subsidies enjoys broader support than the US negotiating position.
“I think developing countries see much more in our proposal,” Kiely recently told a meeting of farm trade specialists. “The U.S. proposal is going to force them to reduce their tariffs by much more.”
He pointed out that the reform also freezes CAP spending until 2013. He said the EU will require concessions on “non-trade areas,” such as animal welfare and protections for geographical food names, as part of any WTO agricultural deal.
However, European trade chief Pascal Lamy has hinted at greater flexibility, and “new offers” on agribusiness by Brussels to drive global trade talks ahead.
He said that, despite differences, the EU and United States had similar agriculture interests, and could work together, although he was concerned about the trade impact of new US bioterrorism rules.
He said the EU expected others to move, and the US would have to change its subsidy-heavy Farm Bill in order to make new WTO commitments on agriculture.
The Cairns Group of exporters, including Australia and Canada, would also have to change their export enterprises.
“Of course we will move. The US and the EU have to move, we obviously have similar interests. We both support farmers in similar amounts,” he added.
But bioterrorism could be a divisive area, after the US passed new rules that tighten port controls, requiring details of imports and labels.
Lamy stressed that ending the WTO trade round on time was vital. “When you look at the situation we are in now, it is pretty obvious that we can create good news,” he said, referring to the stuttering world economy.
But at best, a world trade agreement which could leave EU farmers facing a new flood of low priced food imports, is probably many months away, if not years.
