Industry welcomes WTO movement

WORLDWIDE – The news that the World Trade Organisation (WTO) has reached an agreement that should see an end to agricultural subsidies has been welcomed by the dairy industry.

The text was released following a week of discussions in Geneva, Switzerland. While broadly written, the framework contains a number of goals that could significantly affect the dairy industry. Among these decisions is to eliminate agricultural export subsides.

The document commits to language to establish a more market-oriented international trading system. In addition to the elimination of export subsidies, the framework includes provisions to increase market access and reduce domestic subsidies.

If the framework language remains intact during the Doha negotiations, dairy policy in some countries, including the US and Europe, will have to change. For example, it is likely that the EU’s intervention system could not remain in its current form.

As yet, no time scale has been given for the changes but any future agricultural policy reform will have to take them into account.

“This framework is a major achievement,” said Clay Hough, senior vice president at the USA’s International Dairy Foods Association (IDFA). He added: “Negotiators and WTO members have made a tremendous effort to further liberalise trade and reduce market distortions that will greatly benefit U.S. dairy exporters.” New Zealand co-operative Fonterra, which relies heavily on exports, also welcomed the news. “This is the breakthrough we have been looking for,” said chairman Henry van der Heyden. ” It more than makes up for the disappointing set-back in Cancun last year,” he added.

Van der Heyden went on to say that the agreement means WTO members can now move into the first phase of negotiations, which “will be about translating these commitments into real numbers”.

The UK’s National Farmers’ Union (NFU) described the news as a “breakthrough” for the world economy.