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Farming the hot topic for Seattle

- 26 November 1999
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By Philip Clarke


NEXT week up to 5000 officials from 135 countries will fly into the US city of Seattle for the long-awaited world trade talks.


The session is scheduled to last just four days, after which the delegates will fly back home again.


Four days may not seem long for such a gargantuan meeting, especially considering the last trade talks – the Uruguay round – took seven years.


In fact, next weeks jamboree is merely to draw up an agenda for the so-called millennium round. But that in itself can be a tall order.


WTO envoys have been trying to put together a draft for the past three months, with over 150 subjects already tabled for inclusion. But, with less than a week to go, these preliminaries have become bogged down.


One of the few certainties is that agriculture will feature strongly in the millennium round.


This is because the last agreement, signed off in Marrakech in 1993, insisted fresh negotiations on agriculture should be under way by 2000. It will also be the most controversial subject.


Agriculture is often viewed as a polarised battle zone, with “fortress Europe” on the one side, fighting for its protectionist policies, and the US/Cairns group on the other, pressing for free trade.


The situation is more complex. For a start, the EU has already embarked on freeing up its trade, initially with the 1992 MacSharry reforms and more recently with Agenda 2000.


As farm commissioner Franz Fischler is fond of saying, by the time this process is complete, the EU will have cut support prices by 45%.


And while Agenda 2000 is the start point for EU negotiators, Brussels wants a broader agenda, including “non-trade” topics such as food safety, animal welfare and environmental protection.


It also wants to target other trade enhancement measures such as export credits – favoured by the USA – and state trading organisations, such as the Australian and Canadian wheat boards.


In contrast, the Cairns group, made up of 14 countries, including New Zealand, Australia and Canada, wants a tightly focused trade round, dominated by agriculture, with the main aim of eliminating all export subsidies.


“Non-trade objectives should not be used as a smoke-screen for protectionist policies which perpetuate poverty, hunger and environmental degradation,” it proclaims.


The USA falls somewhere in between. Like the Cairns group, Washington is keen to see an end to export subsidies and greater market access.


But, having itself agreed to US$14 billion in emergency aid for US farmers in the past 12 months, it realises that a total free-for-all is not entirely desirable.


It rejects the EUs broad-brush approach, however, which it believes will pave the way for trade-offs in the WTO process.


But it does recognise there are other issues, such as genetically modified crops, which need to be addressed.


Despite the differences, there is a strong incentive to get the talks wrapped up by 2003.


That is when the so-called “peace clauses” agreed in the Uruguay round and designed to protect certain agricultural subsidies from legal challenge, run out.


That may be an optimistic time frame.


The WTO admits that “past experience shows it is not always easy to complete large, complicated negotiations within the specified time”, but, as the European parliament said last week, a good deal is better than a rushed deal.


The danger for British farmers is that this may go beyond what has already been signed up to in Agenda 2000.


If that is the case, then deeper cuts in support prices will be needed to further reduce the EUs dependence on export subsidies.


And if that happens, then protecting direct income payments will be even more important.


The trouble is, not everybody within the WTO, or even inside Europe, believes they need protecting.


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