News & Views

Despite World Events, Multilateral Trade Discussions Moving Forward

By Barbara Spangler Executive Director
Wheat Export Trade Education Committee

The work of the World Trade Organization (WTO) Committee on Agriculture was not halted by demonstrators in Seattle, and nor has it been by terrorist attacks on the United States. Further trade liberalization work has proceeded. Ideas have been put forward formally and informally, papers have been presented, and countries have been able to meet a time-line for putting all issues on the table.

The horrible atrocities against the United States on September 11 seemed to have brought increased focus on the importance of finding a cooperative way to move the multilateral trade discussions forward.  These events, coupled with economic stress being felt around the world, have highlighted the importance and benefits to be gained from the work of the WTO to improve world trade. Many leaders have said it is through trade that we can build strong relationships and improve economic well being around the world.

At a North American-European Union Conference on Agriculture in Austria in October, the events of September 11 seemed to enhance the attitude of cooperation and increased the willingness to find answers to issues where the U.S. and most of North America, differ in policy from the Europeans. It will be interesting to see if this spirit can carry into the WTO negotiations, which were really at the heart of almost all agenda issues.

The next world trade ministerial is scheduled to be held in Doha, Qatar (in the Persian Gulf, bordered by Saudi Arabia and the United Arab Emirates.) November 9-13, 2001. The WTO is mandated to meet at the minister level every two years, and the Doha meeting will be the fourth regular session, though there is talk at this writing of possibly moving the meeting to another location, perhaps Switzerland.

Regardless of location, the focus of this meeting is whether a new and comprehensive round of trade negotiations will be launched.  The 142 members of the WTO will meet and determine if there is sufficient agreement on issues to move forward. The important issue is that no one is saying anything about canceling the ministerial. There is a growing determination that business of opening trade must go on. There may be a new venue and/or a delay to make plans for a new location but most member countries are poised to begin the discussion.

This meeting is expected to also be the welcome event for China and Taiwan into the WTO family.  There are many political parts to a successful ministerial, everything from welcoming new members to addressing concerns of developing countries, to bringing reality to the European Union’s positions on non-trade issues in the agricultural negotiations, including food safety and labeling, animal welfare and environmental issues. The latter may pose the greatest hurdle, although the EU is beginning to stand alone in their demands for these issues to be an equal part of WTO trade negotiations.

The WTO Council General has released the first of what may be several Draft Ministerial Declarations.  Ministerial meetings usually end with a declaration of accomplishments and/or an outline of future WTO actions.  The Agriculture section of the Draft Declaration outlines issues expected to be handled in a new trade round.

The text reaffirms the commitment of the membership to the long-term objective of establishing “a fair and market-oriented trading system through a program of fundamental reform” as spelled out in the WTO’s Agriculture Agreement. The draft is broad and while not including reference to every issue on the table it does not serve to exclude negotiations on any issue.

While preparations for the Qatar meeting are clearly the focus for most WTO work, an agenda has been put forward for meetings scheduled for December.  These of course would follow the outcome of the November Ministerial. The December agenda includes discussions on food aid, consumer concerns and labeling, trade preferences and environment. Many of these elements are of great concern to the wheat industry. There is little doubt that these discussions will be influenced by the outcome of the Qatar meeting.

The Chairman of WTO Council General has put forward a draft text that includes agriculture for the upcoming Ministerial Declaration. However, for this work to culminate in improved access to world markets for American producers, several pieces are still missing.

One critical piece must be achieved within our own Congress– providing the administration the mandate and authority to negotiate new trade agreements and bring them back to Congress for a yes or no vote under Trade Promotion Authority. The beginning steps toward passing Trade Promotion Authority have been taken, but we must complete the process.   Our negotiators must be able to assume the leadership role that the rest of the world expects.

Congressional action on farm policy is also a piece of the WTO trade puzzle that must be addressed.  Our trading partners are keenly attuned to actions that reform or enhance farm programs and have their own ideas as to how they effect (distort) world markets.   While strongly supporting WTO action to ensure fair and open market access and elimination of trade distorting subsidies, U.S. farm programs are under attack by our competitors.   Our good faith negotiations should be enhanced by language that appears in the House version of the Farm Bill that essentially states that the USDA Secretary may make adjustments to domestic support levels, to ensure they do not exceed levels allowed under the WTO.

House Agriculture Committee Chairman Larry Combest has said that in no way will the U.S. exceed our commitments under the WTO.  There is a strong message here to our competitors that we will abide by our commitments. At the same time it is believed that the U.S. will be willing to negotiate when others, especially the EU, have put their programs on the table to be reformed.

The third piece of the puzzle needed for further ag trade reform in the WTO is that the multilateral agreement has to be comprehensive in scope. Only limited progress can be expected in the Committee on Agriculture without a broad comprehensive round that includes all business sectors at the negotiating table at the same time.  Past history has proven that all sectors’ issues must be on the table to bring balance to the trade-offs that must occur in any negotiation.  This is especially true for American agriculture, as we made extensive market opening reductions to barriers during the Uruguay Round. However, U.S. agriculture still faces many multiple barriers around the world that can only be addressed in these multilateral discussions. 

The Wheat Export Trade Education Committee, based in Washington, D.C., is affiliated with U.S. Wheat Associates and sponsored by wheat checkoff programs in wheat states across the nation, including Minnesota. The purpose of WETEC is to monitor and educate the industry and members of Congress on trade issues facing the U.S. wheat industry.