Kiwi plan to cut subsidies gets the chop

NZ Farmers Weekly, 15 December 2017 by Nigel Stirling
A proposal by New Zealand to rein in the galloping use of agricultural subsidies has sunk without a trace at global trade talks.

NZ’s proposal was one of several on the table to tackle farm subsidies ahead of the World Trade Organisation’s 11th biennial meeting of trade ministers in Argentina last week.

Returning from the meeting Trade Minister David Parker expressed his disappointment that no progress was made.

“We’re pretty disappointed that on agriculture the conference wasn’t ready to agree to cap the subsidies that major countries give their agriculture sectors, which distort world markets and disadvantage not just our farmers but subsistence farmers in developing countries.”

Progress expected on fishing subsides and subsidies for consumers of fossil fuels also crashed and ministers were unable to even agree on a concluding statement that would have reaffirmed several of the core principals of the 167-country organisation.

The meeting in Argentina came after several small wins at the previous two WTO ministerial meetings in 2013 and 2015 when members agreed to ban subsidies for agricultural exports.

However, the organisation had come in for heavy criticism from the United States since the election of President Donald Trump who believed it unfairly favoured competitors such as China.

Given that criticism the Government’s agricultural trade envoy Mike Petersen said it was an achievement that the WTO had survived to fight another day.

“There was certainly some concern going into this meeting that the WTO could blow apart.

“The fact that it has stayed together … is frankly a victory.”

However, he said the patience of the rest of the membership was not unlimited and countries needed to act quickly to come up with new proposals.

“It makes the next meeting in two years’ time very important because if they went through two ministerial meeting cycles where they failed to agree any outcomes then people would really question the value of the WTO.”

Petersen said the WTO remained vitally important to NZ as the best means of tackling global agricultural subsidies, which, for the top nine countries, had increased by US$250 billion between 2001 and 2014 and were on track to hit US$1 trillion by 2030.

NZ’s proposal heading into the Argentina meeting was for a fixed monetary cap set above current subsidy limits.

A competing plan from the European Union and Brazil suggested subsidies be fixed as a percentage of total agricultural production, which would have seen higher subsidies as agricultural production increased.