TRADE: WTO Uncertainty Jeopardises Agricultural Talks

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Dec 29 1999 (IPS) - International negotiations for reducing or eliminating agricultural protectionism, set to begin in early 2000, will be put off until the World Trade Organisation (WTO) clears up its current climate of uncertainty.

The failure of the WTO ministerial conference held earlier this month in the U.S. city of Seattle, Washington, took its toll on the institution’s planned activities, including previously mandated negotiations involving agriculture, services and some intellectual property issues.

The fate of these negotiations, as well as much of the WTO’s future course, will be decided at the next meeting of the general council, global trade’s highest governing forum in the intervals between ministerial conferences.

Following the Seattle debacle, the 135 WTO member countries agreed to take time off in order to assess the current status of the multilateral trade system. The ministerial conference took place amid massive street demonstrations and concluded without even the smallest agreement after four days of deliberations.

When the general council decided to call a time-out on Dec 16, it did not announce a date for its next meeting, in which it is to make decisions on vital aspects of WTO operations.

But sources close to the Group of Cairns (15 countries that promote liberalisation of agricultural trade) said the council will reinitiate sessions between Jan 15 and Jan 20.

At that meeting, they assured, general council delegates will establish dates for beginning the mandated negotiations and will draft guidelines for the talks.

The Group of Cairns sources acknowledged that their high hopes for broad agricultural trade liberalisation had been deflated by the setback in Seattle, where the world’s trade ministers were unable to reach a consensus on convoking a new round of international trade talks to pick up where the Uruguay Round left off in 1994.

Within a general round of trade talks covering several issues, agriculture would have been just one more card on the negotiating table. But options are reduced when all bets are concentrated on three items: agriculture, services and intellectual property.

Given the current situation, some Group of Cairns members prefer that negotiating sessions on the three issues be carried out in a parallel fashion, “so that nobody can speculate on winning benefits on one issue by giving in on another.”

In addition to the Cairns members, other participants in agricultural talks are the United States (which subsidises its farmers but encourages greater opening of world markets) and a group made up of the European Union (EU), Norway, Switzerland, Japan and South Korea – all defenders of farm production and export protections.

The WTO’s mandate from the 1994 Marrakesh ministerial conference requires it to hold negotiations in the year 2000 to continue the process of substantial and progressive reductions in assistance and protection for agricultural trade.

For the service sector, the mandate also establishes 2000 as the beginning of new talks for implementing increased liberalisation of the broad spectrum of activities the service sector encompasses, including areas previously excluded from market opening, such as tourism and aviation.

The mandate calls for intellectual property talks on issues of protecting names of origin, such as those used to identify the products “Champagne,” “Parmesian,” or “Roquefort.”

Pending negotiation points involve the creation of a multilateral system of notification and registry for names of origin for wines and some liquours, as well as greater protection for these products.

On names of origin issues, the Group of Cairns has adopted a flexible stance, expressing willingness to accept the EU extending this type of recognition to additional agricultural products.

But some developing countries emphasised in Seattle that they will not accept an agricultural agreement based on concessions for issues that benefit the industrialised economies where agriculture represents a relatively small portion of the whole.

The Hong Kong-China delegation warned it would reject the budding accord on agriculture because it had been elaborated based on concessions that met EU aspirations on investment issues.

In the end, the text on agriculture drafted during the four-day meeting in Seattle became a worthless document, like all other proposed initiatives, when the entire process at the conference broke down.

The outlook for agricultural trade will depend on the course followed by negotiations on other issues and on the general functioning of the international system, commented some of the trade delegates.

But the group of nations favouring agricultural protectionism will begin to crumble in coming years with the approach of the inevitable reform of the Common Agricultural Policy, the EU’s farm- supporting tax measures.

With the expansion of the EU, the bloc’s budget will not be able to handle expenditures at current levels, in which annual subsidies average 300 dollars per hectare, predict the Group of Cairns sources.

The EU is currently debating the admission of the Czech Republic, Slovenia, Estonia, Hungary and Poland, countries that would supply hundreds of thousands more to the queues of Europe’s army of subsidised farmers.

The new European agricultural reality would also reveal the true nature of protectionism in the United States and would spotlight subsidies in countries like Switzerland, Norway, Japan and South Korea, say the anti-protectionist sources.