AGRICULTURE: Cairns Group Tones Down Criticism of US Farm Bill

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, May 15 2002 (IPS) - The nations that will feel the greatest impact from the latest protectionist barriers in agriculture adopted by the United States chose to keep their criticism mild and to express optimism regarding the multilateral talks in the World Trade Organisation (WTO).

The Cairns Group, comprised of 18 agricultural exporting countries opposed to farm subsidies, declared their “deep regret” over the farm bill signed Monday by U.S. President George W. Bush, which increases agriculture subsidies by nearly 80 percent.

Although the original draft of the statement that was released Wednesday in Geneva “condemned” the farm bill, the final version expressed a milder “deep regret,” on the urging of New Zealand, said a source close to the Cairns Group, who preferred to remain anonymous.

Australian Trade Minister Mark Vaile expressed “disappointment” with the U.S. farm bill on Monday in Geneva. Australia is the permanent chair of the Cairns Group, which was founded in the mid-1980s in the Australian city of Cairns.

Vaile said his government would “critically analyse” the bill, and added that “we reserve the right to ensure it is compliant with U.S. obligations under the WTO.”

By contrast, the Cairns Group communique made no reference to possible legal action in the multilateral trade body.

Nevertheless, several of the group’s members are studying the possibility of challenging the farm bill at the WTO.

Brazil may call for consultations with the United States, the step prior to filing a complaint, regarding the effects the new U.S. law will have on its soy bean and sugar exports.

At the same time, Uruguay is analysing the effects of the farm bill on its rice exports, while Argentina is considering legal action in the WTO because of the harm that the increased U.S. subsidies will cause its grain exports.

The Cairns Group is made up of Australia, Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Fiji, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand and Uruguay.

The criticism voiced by the statement was intentionally muted in order to avoid giving the impression that “the game has been lost,” and to prevent the Cairns Group’s words from being used by “the other side” (countries that protect their agricultural production), said the anonymous source.

The Cairns Group pins high expectations on the results of the new round of multilateral trade talks launched at the WTO’s fourth ministerial conference in Doha, Qatar last November. The first results of the talks are due in September 2003, when the next ministerial conference is held in Cancun, Mexico.

The main Doha Round negotiations are currently focusing on agriculture and services.

The chief concern of the Cairns Group is the talks on agriculture, which are still discussing procedural aspects, but could turn to substantive questions at the next informal session, scheduled for Jun 3-4.

The June talks will address key agricultural trade issues like farm export subsidies, export credits and food aid.

With its sights set on the negotiations, the Cairns Group preferred to keep the wording of its statement on the U.S. farm bill mild, in order “to avoid giving the enemy ammunition,” said the source.

The Cairns Group is involved in a more frontal dispute with the European Union and its allies Japan, South Korea, Norway and Switzerland, than with the United States.

The members of the Cairns Group believe Washington played a key role in getting the final declaration in Doha to put priority on negotiations on agriculture in the new round of talks.

Hence, Wednesday’s communique put a greater emphasis on expressing the group’s commitment to the Doha Round and on “the attainment of a comprehensive programme of agricultural liberalisation and reform in the current WTO negotiations” than on slamming the new U.S. protectionist measures.

The angle that the Cairns Group was most keen on emphasising was the “relief” that the farm bill represented for WTO members that are determined to “oppose justified reforms” in trade in agriculture.

According to the statistics of the Organisation of Economic Cooperation and Development (OECD), there is no great difference between the level of agricultural protectionism in the United States and that of the European Union and its allies.

The 30 OECD countries, which include the world’s industrialised nations, shell out around one billion dollars a day to subsidise their inefficient agricultural production.

But the Cairns Group points out that the United States uses internal price supports and export credits, while the European Union employs export subsidies, seen as more damaging in economic terms and more unfair in terms of trade.

The group’s statement took an upbeat tone with respect to the Doha Round, even though Vaile expressed concern Monday over the latest developments on the trade front, which he said could change the climate of the new round of talks.

Although the Cairns Group communique did not refer to the U.S. Senate decision to weaken President Bush’s authority to negotiate free trade accords, the anonymous source said the legislative amendment that was introduced to the bill on trade promotion authority or “fast track” could lead to “the end of the Doha Round negotiations.”

Fast track authority enables the U.S. administration to negotiate free trade deals that cannot be amended by Congress, which must limit itself to a straight up or down vote.