Federated Farmers recently called for the Government to go beyond the WTO and use “direct diplomatic channels” to put pressure on the European Union to drop subsidies paid to its farmers to cushion them from the effects of falling international milk prices.
The lobby said the Government needed to move quickly if dairy farmers here were to avoid a third year of low milk payouts.
McClay admitted being bemused by the comments which he said he had yet to speak to the organisation about.
“So I am not really sure what they mean there. But my instinct is that the very best place for New Zealand to have a win of the type they are talking about is through the WTO process.”
McClay said the WTO was going through an “internal process” as to how to resurrect the Doha round of trade negotiations which aim to free up global trade through eliminating both tariffs and trade-distorting domestic subsidies.
Despite making little progress in reviving the long-stalled round at its biennial meeting of trade ministers in Nairobi in December, McClay said the membership’s agreement to ban export subsidies was a “step in the right direction” and a potentially valuable win for NZ farmers.
While he conceded subsidies have not been a disruptive influence on international agricultural markets for the best part of a decade the recent dip in dairy prices had threatened to revive their use.
“If we look at the oversupply of milk around the world at the moment there had been calls from producers for them to be put back in place.”
McClay said the directionless of the WTO in recent years had not rattled NZ’s faith in the organisation as a force for significant liberalisation of the international trading system.
“I actually think the WTO is of paramount importance to NZ when it comes to fairness of trade and that is where we will continue to put quite a bit of effort.”
Whether that effort is rewarded is another question.
WTO director-general Roberto Azevedo last week admitted there was still no consensus on the issues that divided the 162 country-membership in Nairobi and have dogged the round since it broke down after near-agreement on a deal in 2008.
Since the Nairobi meeting, however, a small hope has emerged from a push by some countries for so-called new economy issues to be added to the WTO’s negotiating agenda.
While some see this as adding impetus to the talks by boosting the potential gains from a global agreement, others see it as distracting countries from Doha’s initial aims of boosting access for producers from poor countries to the consumer markets of the rich world.
