Current News Articles


DOHA and Agriculture

Press articles periodically mention the DOHA talks.  What are they and how do they affect us? World trade organization negotiations have been going on since 2001. Called the DOHA Round after the fourth ministerial conference set in Doha Qatar, the negotiations cover a broad array of global trade issues of which this article will focus on agriculture.  

One may ask why the negotiations are taking so long.  Given there are 153 member countries all with differing agenda agreements take time1.  When it takes 8 pages to define the word “Subsidies” you know to accomplish anything will be laborious.

The latest G20 summit of leaders held in Seoul, Republic of Korea on the 12th of November, 2010 professed a commitment to bring DOHA negotiations to a conclusion and to resist forms of protectionism. Similarly, at the APEC leaders conference in Yokohama Japan on the 14th of November, 2010 a desire to conclude DOHA negotiations was also pledged. With acknowledgment of the need to have members seek domestic support for the agreement once a conclusion has been reached.  In addition, APEC felt that the trade distorting processes that were introduced due to the Global Financial crisis would need to be eliminated.

WTO Director General, Mr. Pacal Lamy, on February 2nd, 2011 told WTO ambassadors that multilateral agreements of substance must happen now to meet the expectation of a 2011 conclusion.  He stated that progress has been made in the establishment of base data and verification of the base data for the 3 pillars of concern in agriculture. The agriculture three pillars are: market access, domestic support, and export competition.  He also indicated that members were meeting to consider various parameters, including the issue of Overall Trade Domestic Support (OTDS).  In addition, the formulas and technical aspects for eliminating domestic support and export subsidies, known as “modalities”, were being discussed2.
 
A normal Trade policy review of Australia will occur in Geneva April 5 and 7th 2011. Australia is reviewed every 4 years with the last review occurring in 2007. The goal of such a review is through transparency of trade to aid the process of the multilateral trading system policies of WTO member’s.  A fact finding mission to Australia occurred November 22 – 26th Nov 2010 to fulfil this review3.  

The Australia point of view is that export subsidies result in trade distortion. To the farmer this can mean that their products are not competitive in the domestic and/or international market. Australia chairs the “Cairn group” which consists of 19 exporting countries that desire trade liberalization4.  The group met in Punta del Este, Uruguay in April 2010.  The elimination of all export subsidies by 2013, the reduction of domestic supports, and improvement in market access are the three key areas of concern for the group5.

Non trade distorting domestic support are not considered part of the reduction scheme.  This includes items such as infrastructure, development, research and extension6.  

Is free trade important to Australia? Yes. In Australia, two million people are employed in trade related industries. Australian agriculture is export driven, with 60% (volume) of total agriculture production being exported. Hence export levels and prices have a significant contribution to farmers ability to produce food efficiently and profitable. Without this larger market, production efficiency would be lost and higher costs to consumers would occur.    Australia agriculture contributed $32.1 billion to the Australian economy in 2008/097.

Without trade liberalization and the demise of subsidies the playing field for agriculture production is not level. Cheap food imports may seem wonderful to the consumer in the short term, however in reality this undermines all domestic farmers’ ability to compete, driving them out of business. Then when climatic or political conditions limit food supply there are no domestic farmers to meet food needs, creating a problem with food security and increase food prices.

 

Reference

  1. WTO.  2008. Understanding the WTO. Members and Observers.  www.wto.org
  2. WTO. 2011. Lamy outlines what is needed to conclude round this year.  WTO 2011 new items.
  3. WTO Doha Round Bulletin 2010 End of Year Summary.  Australian Government Department of Foreign Affairs and Trade.
  4. WTO. 2011. Groups in agriculture negotiations.  www.wto.org
  5. Communique. 2010.  35th Cairns Group Ministerial meeting, Punta del Este, Uruguay.  www.cairnsgroup.org
  6. WTO.  Briefing notes. Agriculture: negotiation modalities. www.wto.org
  7. NFF. 2011. Farm Facts 2011.
Loading