Punke: Doha ag negotiations ‘dire’
April 11, 2013 | 07:26 PM
U.S. Ambassador to the World Trade Organization Michael Punke said Wednesday that the prospects for a package of achievements that WTO member country trade ministers could approve at their scheduled meeting in Bali in December is “grim” and that the prospects for agriculture negotiations is “even more dire.”
“Only three months ago, a diverse group of ministers met at Davos and pointed us in a clear direction — a small package for Bali built around trade facilitation, an element on agriculture, and an element on development,” Punke said in a statement to the WTO Trade Negotiations Committee in Geneva.
“There was genuine hope that intensive work could deliver such a result. Yet only three months later, the picture is grim. While it is not my intention to throw bricks, I will be frank in our substantive assessment of where various issues stand. That is the whole point of ‘taking stock.’ ”
Punke noted that there has not been agreement on trade facilitation, the issue that is supposed to be at the center of the agreement, but added, “The situation in our agriculture negotiations is even more dire.”
The United States, he noted, would have preferred a large-scale agriculture initiative, but agreed to consider a small package.
Punke said a G-20 proposal on tariff rate quota administration “aims to promote trade” and is not technically difficult to negotiate, but that the G-33 proposal on stockholding of food put forward by India “represents a step back from existing Uruguay Round disciplines — creating a new loophole for potentially unlimited trade-distorting subsidies.”
“This new loophole, moreover, will be available only to a few emerging economies with the cash to use it,” he added. “Other developing countries will accrue no benefit — and in fact will pay for the consequences.”
“First, in the immediate term, when the governments using the program buy up stocks, world prices will go up, making it harder for poorer countries to meet their food needs,” Punke said.
“Later comes the inevitable problem of miscalculation. Over the longer term, the lure of guaranteed prices that are set before the planting season will draw more acres into production. If recent history is repeated, more stocks will be created than anticipated, and the surplus then will be dumped onto international and domestic markets — competing with the products of countries which aren’t subsidizing — and lowering prices that farmers around the world get for their commodities.”
Punke said concerns about the proposal from India had been heightened by a report in the New Delhi Economic Times that India was tendering an international wheat sale at a loss of over $300 million, after it miscalculated its stockpiles and found it necessary to dump surplus stocks on global markets.
“It is ironic that this proposal comes under a title of food security,” Punke said. “Even if it did contribute to food security for the two or three countries that can afford the costs to support such a system — and this is debatable — it will certainly create volatility and insecurity for the vast majority of others.”
The United States, he said, could not support moving backward on agricultural disciplines and is concerned about new agricultural proposals.
For the WTO’s negotiating function to remain relevant, Punke said, it is vital for WTO members to develop a package that can be approved in Bali.
“If Bali fails, it is hard to imagine how Doha can succeed. It defies logic to believe that, if we fail to deliver on the easier issues that the WTO is capable of delivering on the more difficult issues — issues at impasse now for more than a decade.”
