Trade reform talks stumble

Agriculture Minister Jim Sutton is concerned that World Trade Organisation officials are falling off the pace at the Doha talks. Picture / Mark Mitchell

New Zealand's trade-negotiation team remains optimistic that trade reform can be kept on track despite another stumbling block being hit in the latest round of talks.

The world's agriculture ministers are nearing the final phase of the World Trade Organisation's (WTO) Doha round of trade talks.

But the breakdown of talks in Geneva late last month has threatened to prevent the process meeting a series of key deadlines.

The British media last week reported that talks had stalled over an agreement to convert tariffs which are expressed in monetary value into a system - called ad-valorem - which expresses them as a percentage of the product's value.

Trade and Agriculture Minister Jim Sutton is understood to be concerned that WTO members are falling off the pace that is needed if the Doha talks are going to meet their targets of delivering a first draft of new rules in August this year.

Sutton was in Columbia last week for a trade meeting of Cairns group ministers. But a spokesperson for his office said progress was still being made in the Doha round and key deadlines could still be met.

If the round is successful, the changes to could add up to $1 billion a year to New Zealand's economy.

The Government estimates that trade liberalisation during the WTO's Uruguay round in the 1990s gave New Zealand's economy a $9 billion boost and created 17,600 extra jobs over nine years.

A framework for an agreement was reached in Geneva last July. That deal set a ceiling on the use of trade-distorting domestic support to 5 per cent of a country's agricultural output. An official said negotiators were now "putting the flesh on the bones of that framework".

The ad-valorem equivalents have to be worked out so it is possible to see clearly what other countries' tariffs are relative to their total agricultural output. Until those are agreed, it will be impossible to proceed.

Sutton's office is describing the debate as "a disappointment rather than a stumbling block".

There was a mass of data on the table in Geneva and, while members resolved about 85 per cent of the issues, 15 per cent remained unfinished, the spokesperson said.

"We remain hopeful that the unfinished work can be completed by the time of the next agriculture negotiating session in Geneva on April 13. If it isn't, it then has the potential to become a major stumbling block and could affect negatively other areas of the negotiations."

Sutton is working with the Cairns Group to avoid this scenario playing out. The group is a collection of nations with a special interest in agriculture. It includes Argentina, Australia, Bolivia, Brazil, Canada, Chile, Columbia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand and Uruguay.

The Doha Round

* The latest round of trade talks was initiated in November 2001 by the World Trade Organisation in Doha - capital of the Gulf state of Qatar.

* The ultimate aim of the round is to reduce poverty by making international trade more fair.

* Reforming the use of tariffs and subsidies for agriculture is of most interest to New Zealand.

* It is estimated that the last completed round of WTO trade negotiations added $9 billion to the New Zealand economy and created 17,600 extra jobs over nine years.

* Officials hope a final agreement may be in place by the end of next year.