Moment of truth for agriculture at WTO

By Martin Parry

SYDNEY (AFP): Liberalizing agricultural trade will be the hot topic for the Cairns Group of exporters in a new round of global trade talks beginning this month, but analysts question the likelihood of any breakthrough.

Agriculture has been one of the thorniest issues in the preparations for a meeting of trade ministers in Seattle, Washington, from Nov. 30 to Dec. 3 to launch a new round of global free trade talks.

The United States and the Cairns Group of 15 agricultural exporters are demanding the removal of trade barriers, notably an end to export subsidies for farm produce.

The European Union, which accounts for 85 percent of world subsidies for agricultural exports, is firmly opposed to any attempt to treat agriculture as a sector for market opening like any other.

It is now arguing that the "multifunctionality" of agriculture -- its importance for village life, the environment and social factors -- should be protected.

Japan also wants to maintain its protectionist policies.

For key Cairns Group member Australia, the trade round to be launched in Seattle is the "moment of truth" for agriculture, as Australia's Bureau of Agricultural and Resource Economics put it.

"We have got to get it (agriculture) on the table and get it negotiated," Australian Trade Minister Mark Vaile said recently.

He has already accused Tokyo and the EU of "seeking continued discrimination against agriculture in the WTO."

His comments follow reports that it was the Cairns group's "all or nothing" stance on agriculture that was stalling progress in negotiations on the text of a declaration to be issued by the Seattle meeting to set the scope and timetable of the new round.

"Australia and the Cairns Group are committed to the successful launch of agriculture negotiations as part of the Seattle meeting," Vaile said.

"I am therefore concerned at attempts by the EU, Japan and others like Switzerland and Norway to deflect attention from their own uncompromising positions in this way."

He accused them of making their own big demands on issues of interest to them but offering little in return.

The Cairns Group and most developing countries, he said, wanted a mandate for real liberalization of trade in all agrifood products.

To ignore this would be a snub for all developing countries who "most of all need fair agricultural markets."

"For them agriculture is a matter of economic survival," Vaile said, urging all WTO members to approach the meeting in a positive, pragmatic and flexible spirit.

But one trade analyst said that given the power of domestic farmers' lobbies in the EU, significant progress in Seattle was doubtful.

"The danger for Australia and the Cairns Group is that agriculture might get on the millennium round agenda but any real reforms are frittered away over long negotiations that bring in unrelated trade-offs on the environment, labour standards and competition," he said.

While tariffs have rapidly dropped in most other sectors, protectionism abounds in agriculture.

Tariffs of more than 300 percent are not uncommon with official statistics here showing the biggest distortions in wheat, rice, oilseeds, sugar and milk in Japan and wheat, beef and sheepmeat in the EU.

"Australia in particular, with 80 percent of its farm production exported, has much to gain and little to lose," another analyst said, but also poured cold water on an outcome acceptable to Cairns Group members.

"The EU is happy to talk about agriculture in any millennium round but not on the terms of Australia and the Cairns Group," he said.

"A 36 percent reduction in agricultural support -- the target set by Uruguay -- could produce a significant gain for the global economy but the pain levels for big protectionists like the EU and Japan would be very high."

Agriculture proved such a thorny issue in the previous Uruguay Round of global trade talks that after a marathon seven years of negotiations which ended in 1994 the participants agreed to come back and try again in 2000, but it is already clear that the problem remains immense.

The Cairns Group comprises Argentina, Australia, Brazil, Canada, Chile, Colombia, Fiji, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand and Uruguay.

Together, these nations account for about 20 percent of the world's agricultural exports.