Contrary to what you may have heard, negotiations to establish a new round of trade talks under the World Trade Organization did not come to a complete halt in Seattle last December.
Although protesters did manage to garner maximum publicity for their efforts to derail the talks, the negotiations are alive and well, thank you, according to WTO Director-General Mike Moore.
“So far, 36 negotiating proposals have been made in the agricultural area, covering the whole range of specific issues,” said Moore, speaking at the USDA Outlook Conference. “There can be no doubt that governments are intensively and seriously involved and that these negotiations are making all the progress we could expect under current conditions.
Moore said the key words are “under current conditions.”
“I think almost everyone involved accepts that however hard the negotiators work we are simply not going to get an optimal outcome from these negotiations unless we can relate them to a wider agenda — to a new round,” he said.
“The next stage of negotiations is bound to be tougher, as political decisions are needed to narrow the wide gaps among positions. The arguments on the various sides of the agriculture talks may speak for themselves, but the political logic for most of the participants demands the possibility of broader trade-offs.”
Moore, the leadoff speaker on a panel on trade issues at the annual Outlook Conference, said U.S. leadership in the negotiations is crucial.
“It is difficult to overstate what is at stake here,” he noted. “The United States is the world's biggest exporter of agricultural products, accounting for 12 percent of the total. This makes up 10 percent of total U.S. exports.”
Although the North American Free Trade Agreement has played an increasing role in U.S. trade, three-fourths of U.S. exports still go outside the NAFTA area, 40 percent of those to Asia alone.
“That is why a multilateral approach to agricultural negotiations is so important for the United States,” he said. “For the United States and other export-oriented producers, the negotiations could open up, on a secure and predictable basis, better access to the most dynamic food markets of the future.”
For other countries, the negotiations offer the possibility of improved growth through trade in products in which they might have a competitive advantage if trade conditions were less distorted. “This, in turn, will make it less attractive to grow illegal crops.”
Cutting trade-distorting subsidies, as he called them, also can lower prices for consumers and reduce the incentive to farm in ways that are unfriendly to the environment.
The last round of world trade talks, the “Uruguay Round,” laid the foundations of a fair and market-oriented agricultural trading system, he said. It set new rules on subsidies, outlawed non-tariff barriers and began reducing trade-distorting domestic support, export subsidies and tariffs.
“Some governments and their farm constituents feel the Uruguay Round promised benefits that have still not arrived,” Moore noted. “Others fear a further erosion of existing protection in terms of a threat to traditional values and lifestyles. And no one should underestimate the reality of the concern for food safety, which is particularly acute in Europe at present but which is by no means only found there.”
He said most of the negotiating proposals submitted by WTO members call for improvements in market access, “although there are clearly differences in the level of ambition, approaches and details. In one way or the other, all aspects of market access are on the table.”
While difficult negotiations are still ahead, Moore is heartened by the progress made to date. “I can recall when many said that no world trade agreement would ever include agriculture because it was too hard,” he said. “We have gone far beyond that stage and into a new era of negotiations.”