September 11th 1999

New Zealand tees up for the WTO

Will Tom Parlon be made Ireland's special Ambassador for Agriculture in the run up to the next WTO talks?

That is what New Zealand has just done. The just retired president of Federated Farmers, Malcolm Bailey has been appointed by the New Zealand Government as their special agricultural trade ambassador in preparation for the WTO. The talks to kick off in Seattle in the US in November.

Agriculture and the WTO matter to New Zealand. Their view on both is totally different to the EU. While comparatively small New Zealand is very much the intellectual powerhouse of the Cairns Group - the group of major agricultural exporters who want to see world wide free trade in agriculture. But as their new agricultural ambassador Malcolm Bailey put it "we had no option we went down the agricultural subsidy route in the 70s/early 80s and the money ran out. We had to change course. During those days of farmer dependence on government of course we kicked in the doors of government offices, but now relationships are extremely close as we both share the same objective".

From the New Zealand perspective these objectives are worth pursuing. Mr Bailey acknowledges that every step along the path to free trade is a step forward for New Zealand.

The last GATT - or the WTO round has shown that agricultural trade talks can deliver. In the last round export refunds were cut and the amount of product that could also be exported with the aid of export refunds were also reduced. Access to the EU and other markets were increased. At least five per cent of each market had to be opened up to imports and discipline and ceilings were imposed on national aids.

So what are the aims this time?

The Ambassador's priority is to get rid of export refunds completely in this round and as soon as possible.

He comes with the usual reasons for their abolition - they distort trade, reduce world market prices etc. In his view the Agenda 2000 decisions will cause EU production o expand beyond the limit allowed by the Uruguay or present GATT round. So at a minimum he expects changes to be forced on the EU to cut back on present export refunds. He then wants commitments to gradually phase them out over succeeding years. Judging from the noises from Brussels he may well get his way.

How much access to EU markets does he want for New Zealand products. The EU is already by far their major lamb market. They have a quota of 225,000 tonnes of lamb with scope to send in as much vac pac product as they wish.

Mr Bailey says that the five per cent minimum access figure of the last time should be increased but so far no figure has been pencilled in as a new target. Mr Bailey is at his smoothest in discussing the whole network of direct and area aid payments that came in with the MacSharry reforms in 92.

"We see farmers in Europe dependent on subsidies but infuriated by the bureaucracy".

"We are not saying that our model of agriculture is the only one we recognise, that different countries have different circumstances, but we would like to see these `Blue Box' payments channelled through the Green Box - in other words they would be neither trade nor production distorting".

This is going to be one of the nubs of the WTO negotiations.

The EU payments are normally dependent on livestock numbers being maintained and tillage crops being sown and harvested.

New Zealand and the Cairns Group want these production conditions abolished.

The EU maintain that these payments are acceptable because they are part of production limiting programmes. This for the Cairns Group is not enough.

Another of the major battlegrounds is on the animal health, welfare, biotechnology sides.

For Mr Bailey the WTO should not be involved. It's up to the international scientific bodies to adjudicate on the scientific merits and then once products are declared safe they should circulate freely.

The consumer should then decide if it wants to buy these products on the basis of clear labelling. The newly created Ambassador acknowledges that this may be utopia, but he has to start somewhere.