Appropriately on July 4 the Globe and Mail ran an editorial subtitled “Doha is dying.”
While the Globe didn’t get into the specifics of what happened – talking about differences between developed and developing nations the recently passed U.S. farm bill – which has more to do with vote buying than farm stability – played a role.
Amazingly, the new farm bill promises to prop up grain producer incomes while grain prices surge to record highs.
Or perhaps it isn’t all that amazing. U.S. politicians – like politicians in Canada, Europe and elsewhere – know how to count votes and know that votes in Iowa, Kansas, Montana and Missouri count while those in Africa, Asia and South America don’t.
As a result they decided not to change any of the policies that sparked international interest in a new trade agreement.
They seemingly also decided to ignore international food shortages and sky-high grain prices to continue pouring billions of dollars into grain ethanol subsidies.
If you add to that the reluctance of some European nations to accept substantive change to Europe’s farm policies and the reluctance of developing nations to open up their markets to trade in services you have a recipe for Doha failure.
Very soon there will be a round of last gasp negotiations. These negotiations could be very, very dangerous.
Trade negotiators and departing politicians like George Bush and the rest of his administration want to leave a legacy. Perhaps they will cobble together some sort of deal. It would, after all, be deeply embarrassing and perhaps fatal to the future of the WTO, if nothing came from almost seven years of talk.
This makes it a potentially dangerous time for Canada’s supply managed sector. An easy out for most countries would be to opt for reductions in tariffs and TRQs like the ones that protect Canada’s poultry and dairy industries.
Europe, the U.S. and others would be able to proclaim success while Canada would be left trying to figure out what to do. Canadian farm leaders and politicians are well aware of this risk but may have to work extremely hard to ensure it doesn’t happen.
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