Storm over WTO subsidies

INTERNATIONAL – The WTO’s first draft proposals for a worldwide agricultural policy have failed to find common ground for negotiation among its member nations, who met in Tokyo from 14-16 February.

The disagreement over the proposals, that are the blueprint for further talks, means an uncertain future for commodity dairy products like butter and SMP.

The targets, or ‘modalities’, set out in the draft address issues such as tariffs, subsidies and import quotas. Among the modalities is the elimination of export subsidies over a ten-year period, tariff reductions of up to 60%, cuts in domestic subsidies and a rise in import quotas.

The problems stem from the polarised positions of the WTO’s member states. On the one hand, there is an unlikely alliance between the USA and the 17-member Cairns Group, that includes Australia, New Zealand and Canada, who want greater liberalisation of the agricultural trade market to satisfy their export surplus. On the other, more protectionist groups like the EU and Japan want changes to be phased in slower and less drastically, to avoid having their markets flooded by cheap imports.

The WTO must now try to salvage what it can from the Tokyo talks, and come up with a proposal that will accommodate the cross-section of views among the world’s diverse agricultural communities.