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Focus Shifts to Bilateral Trade Following Collapse of WTO Negotiations

by 5m Editor
2 August 2008, at 9:42am

CANADA - Following the collapse of the latest effort to secure a new global trade agreement, Canadian agricultural producers are counting on the federal government to step up and place a greater focus on securing new regional trade agreements.

Negotiations Collapse Without a Deal

Earlier this week (July 29), following nine days of intense discussion, World Trade Organization director general Pascal Lamy suspended a ministerial meeting in Geneva after negotiators failed to approve blueprint agreements for agriculture and industrial products.

"A successful deal for Canada is important," says Canada's Minister of International Trade Michael Fortier.

"We're a trading nation as you know. We depend on the ability of our exporters to access markets worldwide and, in particular markets in emerging or developing economies."

Fortier acknowledges his disappointment with the suspension of the talks but he remains cautiously optimistic that WTO officials can kick start the talks in the not too distant future.

Breakdown of Talks a Setback for Canadian Farmers

"There's no doubt that this is a significant setback especially for our farmers and exporters given the economic benefits that they and Canada as a whole stood to achieve from a positive outcome," observes Canada's Minister of Agriculture and Agri-Food and minister responsible for the Canadian Wheat Board Gerry Ritz.

"These talks may have stalled at this time but we remain committed to more liberalized trade, a rules based system and the overall objectives of the Doha negotiations."

Ritz is pledging to press ahead with Canada's trade agenda and efforts to find more opportunities for producers and exporters.

"When the talks resume, we'll be there," he says.

Special Safeguard Mechanism Identified as Main Outstanding Issue

Although there were a number of outstanding issues around which a consensus could not be achieved, the main stumbling block appeared to be the special safeguard mechanism in farm products for developing countries.

This is a mechanism by which developing nations would have the authority to impose tariffs in the event of a large increase in imports of a particular agricultural commodity or product.

Canadian Pork Council executive director Martin Rice fears, an increase in imports of a particular commodity as low as 15 to 20 percent could result in duties which is considered unacceptable by developed countries that are looking at making major concessions what will benefit developing countries.

"The developed countries on the one side, like Canada, the U.S., and Europe have come to an agreement to accept these special safeguards but the threshold or the trigger levels need to be a little less protective than what the developing countries are looking for."

Despite Failure Progress Reported

Although the talks were suspended observers report significant progress on several fronts. Agricultural Producers Association of Saskatchewan president Glenn Blakley points out negotiators came a long way down the road to an agreement in a lot of areas. It's just that they ran into a couple of roadblocks they couldn't work with."

Rice adds, "There's been, in our view, significant progress achieved between Hong Kong two years ago and these meetings this past week, far too much progress to let it be dropped, let it be put on the shelf for an extended period."

Although a number of issues remain outstanding Fortier believes additional preparatory work by senior officials, away from a full ministerial meeting, could resolve some of these issues resulting in a successful outcome when delegates return, when ever that is.

Resumption of WTO Talks Dependent on Unrelated Events

"The challenge is there's a number of extenuating circumstances around that, including the U.S. presidential election," Blakely explains.

"It's going to be very very difficult to get them up and running again before this fall."

Rice suspects the negotiations will resume where things have left off but he fears that could take two or three years.

He recommends allowing the negotiators to do their work with a little less scrutiny and hopes there will be a little bit more sober second thought by some countries that took pretty strong stands against any compromise.

Increased Emphasis on Regional Trade Agreements Encouraged

"I think the most significant thing we can do in the interim is begin a very aggressive program of bilaterals," suggests Keystone Agricultural Producers president Ian Wishart.

"We have a lot of room and a lot of opportunity to make bilateral agreements that can be beneficial to Canadian agriculture."

Fortier agrees, "I think what you will see is, whilst many countries will express what we're expressing today that hopefully the talks can be revived sooner than later, there will be many of us that will seriously engage toward bilaterals."

He notes Canada's global commerce strategy has been to focus on the Americas and emerging economies such as China, India and Brazil and initial agreements have already been signed with Peru, with Columbia. Discussions with the Republic of Korea are ongoing and Fortier is hopeful negotiations can be opened up with the European Union.

Ritz points out, although no global trade deal was reached, Canadian negotiators took the time and the opportunity to sit down with many of Canada's key trading partners such as the U.S., the EU, China, India, Japan, Mexico and several others.

"We will push ahead with our trade agenda and our efforts to find more opportunities for our producers and exporters. These talks may have stalled at this time but we remain committed to more liberalized trade, a rules based system and the overall objectives of the Doha negotiations. In the meantime we're going to be knocking on doors around the world to create new opportunities for our farmers and our exporters."

Canada Trails Competitors on Bilateral Front

"We've fallen behind United States and we've also fallen behind other pork exporting countries such as Chile," Rice observes.

Blakley agrees, "I don't think they've measured up in regards to getting other bilateral agreements signed as some of the other countries have. A number of the other countries have gone ahead and signed bilateral agreements not waiting for WTO to be the answer to all of their problems so I think Canada is maybe lagging a little behind."

"It's not that we haven't done it ourselves," Blakley stresses. "It's just that we maybe haven't been as quick out of the gate as some of the other countries.'

Rice notes producers have been supportive of the negotiations with Columbia which have been completed and will hopefully be implemented and an agreement needs to be finalized with Korea.

"We would not want to see ourselves fall behind the U.S. as a supplier to Korea."

Food Quality and Safety Canada's Best Advantage

Blakley is convinced there's an opportunity to be had.

"Our producers are producing some of the safest food in the world. If we sell it properly as that and the premium type product that we are able to deliver to those markets, I think that we can improve our position in world trade. That should be the role and the goal of this government, to help the industry develop some of those markets."

5m Editor