Thursday, July 29, 2004

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A step forward on agriculture?

Richard Waddington has a Reuters story suggesting that the Doha round of trade talks has overcome the agriculture obstacle:

Five core members of the World Trade Organisation have ended hours of hard bargaining with an accord that could open the way to a deal on a trade pact by the full membership, a leading negotiator says.

"It brings the possibility of an agreement (of the full membership) nearer," the negotiator, who had been involved in the talks, told Reuters on Thursday.

The five are the United States, the European Union, Australia, India and Brazil, who are considered to represent a wide range of trade interests within the 147-state body.

The WTO has set itself until midnight on Friday to seal outline deals in four key areas - farm and industrial goods, services and a new customs' code - in a bid to put its troubled Doha Round of free trade negotiations back on track.

However, a number of other members, including Switzerland, suspicious at the leading role assumed by the five, have warned that they will not be railroaded into a deal just because the big trading powers back it.

The negotiator, who declined to be named or to go into detail, said that the ideas accepted by the five covered all points of the hotly disputed text on agricultural reform, which is widely seen as crucial to an overall pact....

Although there were still problems in the other issues, diplomats said that there was a good chance that they could quickly be overcome once the all-important question of agriculture had been decided.

"The feeling is that they are all doable," said one diplomat, who asked not to be named.

It's worth noting that 15 years ago, when the Uruguay round was being negtiated, the "core members" of the world trade body were called the "Quad" -- the U.S., European Union, Japan, and Canada. The fact that India and Brazil need to be consulted at this level is a testament to how the balance of power has shifted within the WTO.

posted by Dan on 07.29.04 at 09:53 AM


This begs the question: why is it that the world's trade ministers (whose success is measured largely by their ability close trade deals) are charged with rewriting national agricultural policies (as opposed to, say, the world's agriculture ministers who have a much firmer grasp on the importance, constraints and dynamism of the world food system)?

posted by: Adam on 07.29.04 at 09:53 AM [permalink]

re Adam's question. In the case of the United States, the U.S. Department of Agriculture provides U.S. negotiators with support, analysis, & had the dominant large role in determining the initial position of the U.S. and the acceptability of other countries’ offers. I am sure that this is true for other countries.

On a sarcastic note: Ministries of Agriculture generally overestimate the importance of agriculture, farm policy is one of the important constraints on agriculture, & farm policy is generally designed to reduce the dynamism of the food system.

posted by: Bill on 07.29.04 at 09:53 AM [permalink]

Further re: Adam's question, if it were up to national agriculture ministries and departments farm trade talks wouldn't happen at all. Even during the Reagan administration Congressional resistance to reducing subsidies and trade barriers was supported from within the bureaucracy at USDA. European farm ministries are even worse (USDA's constituency, unlike that of its European and Japanese counterparts, includes many farmers who want export opportunities more than they fear import competition). Agriculture departments want to support farmers; their employees depend for their livelihoods on programs designed to do this. For the most part they have little incentive to support trade negotiations that if successful will reduce their own role and disappoint farmers used to extensive government support.

posted by: Zathras on 07.29.04 at 09:53 AM [permalink]


Generally speaking, the USDA has been officially pro-trade-liberalization, reflecting the priorities of the last few administrations. The positions of the long-term employees varies by Agency. For example, the Economic Research Service, being full of economists, generally supports economic efficiency & market liberalization. The “blue box” policies suggested by the WTO also allow governments a wide range of latitude in writing checks to farmers.

Regarding Prof D’s comments about the importance of Brazil & India. Brazil and India allied themselves during the Cancun meetings against the existing draft agricultural agreement. This was an important cause of the failure in Cancun. There will be no agreement on agriculture without their approval. (Google WTO, Cancun, agriculture & Brazil to find reports & commentary on last fall’s failed Cancun meetings & the Brazilian & Indian roles.)

posted by: Bill on 07.29.04 at 09:53 AM [permalink]

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