Canada favours end of any ag support

By John Phillips

Those September talks designed to change the face of world agriculture collapsed when the U.S., Western Europe and Japan refused to surrender their price setting structures. A number of less prosperous countries accused the West plus Japan of leaning hard against poorer countries into accepting trade rules they didn’t want.

George Yau, Singapore’s trade minister, tried to persuade the World Trade Organization (WTO) to accept a compromise on farm subsidies but the new G21 Brazil-led bloc refused to bend. Eyes were set on them getting a large part of the (US)$300 billion a year spent helping farm families but their own markets were not open to dealing. The basic issue, according to reports, were four proposals on foreign investment and competition.

A major fly in the ointment was political. Brazil had an election where Marxists took an unexpected lead. This development triggered under-developed countries, including China, India, Indonesia and many African states, to create the G21. Meanwhile, terrorist groups increased their strikes against U.S. forces in Iraq and Canada appeared to have two prime ministers.

After hours of wrangling over diverging agendas, the Cancun meeting’s chairman, Luis Ernesto Derbez, closed the session. "Unfortunately, we didn’t achieve the advances we had proposed to achieve," he declared.

And Uganda’s Irene Ovonji Odida complained that "trade ministers have been pressured, blackmailed," an indirect reference to the U.S. and its allies.

U.S. Trade Representative Robert Zoellick said some countries were more interested in flowery speeches than negotiations. "Some will now need to decide whether they want to make a point, or whether they want to make progress." Sebastien Theberge, an official with Canadian International Trade, said he was "disappointed" with the WTO discussions and urged a return to a "prize we all seek… a balanced and a critical trading system that will benefit Canada’s economy, as well as the developing countries."

There’s little doubt that Cancun’s failure was a major blow to the WTO. Moreover, the emergence of the G21 suggests rough times lie ahead. The U.S. and the European Community, often rivals in recent years, were thrown together in their efforts to sustain a workable farm economy. On the other hand, the G21 grouping sought to slash farm subsidies paid by the so-called rich countries, making it easier for their farmers to compete in a world economy.

With Paul Martin waiting in the wings, Canadian farmers ponder the future of supply-management and the survival of the dairy and poultry industries. Based on family farms, they got tariff protection during the last world trade negotiations, but they gave up just under 10 per cent access to the domestic market.

However, in September Mr. Martin lauded the importance of the New Economy which suggests farm subsidies are an impediment to global trade and that they are a major irritant between rich and poor countries.

So where does this leave WTO and Canadian agriculture?