West asked to surrender trade benefit

With the failure of recent World Trade Organization (WTO) meetings in Cancun, Mexico, the world’s New Economy gave little thought to the consequences. Lawrence Solomon, executive-director of the Toronto-based Urban Renaissance Institute, lauded the result as no more than a temporary setback and urged the new Prime Minister, Paul Martin, to move rapidly against agricultural subsidies.

He lavished praise on what he calls the international-government-financial elite, expecting it to move firmly against the "single-biggest" impediment to world global trade, the US$300 billion a year in subsidies lavished by Western nations on their farmers.

This, we are told, is the antithesis of the New Economy. Apparently, for every dollar of rural income Canadians earn they are "provided {with} close to four dollars in subsidies." Instead of providing products for high-value niche markets, Canadian farmers produce low-value commodities which governments then export at a loss.

Then comes the supposed clincher: Does Mr. Martin have the stomach to take on Canada’s farmers and "enforce a long-overdue restructuring?"

Wait a moment. Where does Mr. Solomon go for his figures? He breathlessly whispers Maurice Strong who "renounces foreign aid." Then comes the revelation that he is the world’s leading critic of US$700 billion spent on agriculture, water, energy and transportation. That’s not too far short of the magic one-trillion dollars but little is said about how the money is spent. Apart from a modest amount on cotton, how else would he and Mr. Martin blow the funds which come from tax dollars?

The amount, although wildly inaccurate, still falls $400 billion short of the hyped $700 billion. And almost overlooked are those "most-developing" countries seeking continued protection for "special products." How does this really differ from what farmers in most countries seek? Moreover, carefully ignored is that the developing country bloc ties progress to the outcome of agricultural negotiations.

The WTO is thought to have been on the verge of a breakthrough to cut trade barriers. This may have been so but what did it entail? Both the U.S. and European Union likely agreed to a gradual tariff reduction. Mr. Franz Fischler, Europe’s agriculture commissioner, contends that "we left useless procedural discussions behind. We’re now engaging in serious discussions on substance."

However, it seems that this was not good enough for the newly christened G21 bloc. This grouping includes India and China, which pressed for deep cuts in Western subsidies, too deep and unrealistic for the West. It seems the group’s hard line on this issue resulted in the WTO conference foundering. Brazil, a major world player, sought the U.S. and Europe to agree on protection from challenges to some of their private subsidy policies.

There was no way the two super powers could agree to a virtual surrender. The result was an end to serious discussions on gradually reducing farm subsidies, at least for the time being.