High stakes for the West at trade talks
WORTH REPEATING
With the Grey Cup now behind us, prairie- dwellers can turn their attention to another confrontation, one that will have far greater implications than any sporting event.
It’s the next set of negotiations under the World Trade Organization’s Doha Round. These talks will be held Dec. 1318 in Hong Kong and have been the subject of much speculation.
Better than almost anyone else in Canada, we in Saskatchewan know how high the stakes are. Farming is in a crisis because of ( among other things) the prolonged subsidy war between the United States and the European Union that has bid down commodity prices to poverty levels. The portents for next month’s talks are mixed. A preliminary meeting in Geneva seemed to go nowhere. The sticking point, as ever, is agriculture. New Zealander Crawford Falconer, chairman of the WTO’s agriculture committee, wrote in a report that “ failure to move ahead on agriculture risked jeopardizing the progress made in trade negotiations since July 2004.”
Balancing that, there are a few encouraging factors. Preliminary work is starting in Washington on the next U. S. farm bill, which customarily runs for five years and should be passed by next summer. Once its provisions are set, they cannot realistically be altered for another five years, so a failure in Hong Kong would make substantial changes in global agricultural trade practically impossible for another five years. That puts pressure on all sides to come up with some sort of agreement. As well, both the U. S. and EU desperately want to trim their spending on agricultural subsidies — the former because of its enormous federal budget deficit; the latter because of its recent expansion into the backward economies of Eastern Europe, where farming is highly inefficient. Extending to them the kind of agricultural subsidies now enjoyed by Western Europe would not quite bankrupt the EU, but would make taxpayers in wealthy Western European countries wonder why they are paying so much.
What, if anything, will Canada have to give up in these negotiations? The conventional wisdom is that we will have to give ground, perhaps a great deal, on Canada’s system of marketing boards in egg, dairy and poultry production and also on the Canadian Wheat Board. The board is, by law, the sole offshore seller for wheat grown in Western Canada. One recurring train of thought is that Canadian negotiators will offer up as a sacrifice the CWB’s monopoly powers, although they would insist the board remain in existence. How important is this round of trade talks for Canadian agriculture? Last week saw the federal government unveil an agriculture aid package aimed at producers of grains and oilseeds. A total of $755 million has been allotted and all experts agree even that is far too little.
For Saskatchewan farmers, the best outcome would be a drastically reformed global agriculture market. What will actually happen in Hong Kong in December is anybody’s guess. Cross your fingers. This is an edited version of an editorial from the Regina Leader-Post.