Stalled summit limits progress on agriculture

By Brian Fallow

WELLINGTON - Talks on liberalising agricultural trade begin in the new year but they are expected to make little progress without an agreement on a broad round of global trade negotiations.

Such a round was due to be launched at the meeting of 135 Trade Ministers in Seattle but it broke up on Saturday without reaching agreement.

The talks to begin in January on agriculture and services were mandated at the end of the Uruguay Round five years ago.

Jim Sutton, expected to be Minister of Agriculture and Trade Negotiations in the new Government, said: "Obviously we are prepared to work on agriculture while others agonise over the objectives on other matters."

But he warned that real progress could be expected only in the context of a wider round of trade negotiations.

"It really isn't until you get a broad range of issues on the table, where there can be trade-offs that leave everybody clearly winning, that you can expect real progress."

Outgoing Trade Minister Dr Lockwood Smith agrees.

"The Europeans aren't going to move far on agriculture if they can't get anything anywhere else. They seem to need something in the area of rules on investment and competition policy, if they are going to take the hard hits on agriculture."

The European Union farm commissioner, Franz Fischler, made it clear before leaving Seattle that any concessions the EU had discussed there had been removed from the negotiating table.

The new negotiations would start "from the very beginning," although the ideas discussed in Seattle would not disappear, he said.

Dr Smith said that for a while negotiators seemed to be within a hair's breadth of agreement on agriculture, but the Europeans had choked on any dialogue, however qualified, which spoke of the elimination of export subsidies.

Supported by Japan and Korea, they also sought recognition of the proposition that agriculture has functions other than producing tradeable commodities, such as maintaining the rural environment and creating jobs, which can warrant subsidy.

Dr Smith said negotiators had also come close to an agreement on industrial tariffs - a category that includes fish and forest products.

"The thing that finally stymied us was tariff peaks."

The United States, for example, while its average tariff level is between 6 and 7 per cent, has much higher tariffs on some items, including textiles and utility vehicles.

"What might have helped [a deal on agriculture] was if the US had been able to move on tariff peaks. I thought towards the end they might be prepared to and that we might be able to clinch a deal, but we ran out of time."