Trade and Export Growth Minister Damien O’Connor is expected to press for a new framework to reduce agricultural subsidies during WTO talks.
New Zealand will make a familiar pitch to fellow delegates at high level trade talks at WTO’s 12th Ministerial Conference, which will be held in Geneva between November 30 and December 3.
Trade and Export Growth Minister Damien O’Connor will press for a new framework to reduce agricultural subsidies.
Other protected industries will also be in his sights: subsidised fossil fuel production and subsidised fishing.
But these issues could well be overshadowed by arguments over vaccines for covid-19.
Another issue will be the WTO appellate body, which collapsed during the Trump administration and might be revived though with reduced powers.
But agriculture will be one of the main concerns of O’Connor.
In the year till 2020, total primary sector sector exports were over $48 billion – more than 60% of which came from dairy, meat and wool.
But according to the NZ International Business Forum (NZIBF), this success has come in spite of continuing unfair trading practices by other nations.
The forum says NZ producers have benefited significantly from the trade liberalisation process that was begun in the Uruguay Round of trade talks and was continued in the Doha Round.
But it says there is a lot more work to be achieved and if left unchecked, the impact of agricultural subsidies that distort trade and production will reach US$2 trillion by 2030.
The executive director of the forum, Stephen Jacobi, says the grounds for reducing this cost make sense, but he is pessimistic about the prospects of achieving it in Geneva.
“The global trade environment is not very positive for an outcome,” Jacobi said.
“The director general (of the WTO) has been trying very hard to reduce the scope of the talks to a very small range of things and I wonder quite frankly how robust the outcome of this meeting will be.”
Jacobi says the world has got rid of export subsidies, but is still stuck with subsidies that governments can pay their farmers for domestic production.
“We’ve seen an enormous increase in these subsidies in recent years, particularly in the United States,” he said.
“WTO members already have entitlements to subsidise, but there are ceilings put on them … we are trying to get them down and there is a proposal from the Cairns Group to cut them by half.
“That would seem to be a very good thing but it appears to be a bit ambitious.”
In fact, the talks are bound to be dominated by pharmaceuticals.
Several large companies have developed vaccines against covid-19.
They want to maintain intellectual property (IP) rights to these products, to offset the huge cost of developing them and to maintain or increase their profits.
Developing nations say IP rights push the price of drugs above the level they can afford for many drugs produced in western nations and their people are dying from diseases that can be stopped.
Western countries say without protection for IP, pharmaceuticals would not be developed in the first place.
A compromise proposal has been developed but has run into fresh challenges from critics.
This argument is expected to dominate the talks and push agricultural subsidies to the sidelines.
Another issue will be the re-establishment of an appeals process to hear judicial arguments on trade disputes.
NZ has always wanted a strong appellate body to give small nations protection against big ones.
But the WTO appellate body lapsed because the Trump administration in Washington blocked the appointment of new judges.
Since last year’s US election, President Biden has maintained that position.
His nominee to the WTO, Maria Pagan, has told the Senate she wants to restore the appellate body.
But she said it would not be easy and stressed it would have to reduce the scope of its actions.
Similar comments have come from the US trade representative Katherine Tai.
Despite these difficulties, O’Connor will go to Geneva with an open mind and will seek to push NZ trade interests all over again.
“The WTO provides the foundation for rules based trade,” O’Connor said, adding “New Zealand would work to develop a meaningful trade response to the covid pandemic.”
