There are some crucial details that have been released and substantially reduce the impact of the stunning World Trade Organization agreement to eliminate export subsidies on food and agriculture products.
The most important is that these new measures lack the enforcement disciplines of other World Trade Organization agreements.
For now, the only clout is “naming and shaming” those who break the new rules, according to a United States official offering a briefing on the weekend deal reached in Nairobi, Kenya.
Another detail is that developed countries, which are to immediately scrap their export subsidies, will in fact have up to five years to implement them for processed, pork and dairy products. Developing countries get up to seven years.
The announcement stunned most Canadian agriculture-industry leaders, particularly because the deal could end all Canadian exports of dairy products since the World Trade Organization has already determined that Canada’s supply management system is an export subsidy.
The same reasoning could end chicken exports, including large volumes Canadians send to China. All exports of chicken feet, which have no practical market in Canada, could be stymied.
One surprising detail of the deal is that domestic transportation subsidies could be included in the determination of export subsidies.
That would impact all U.S. grain and other agricultural exports moving down the Mississippi River.
The deal includes specific limits on export credit (loans) and new disciplines on food aid, especially on the U.S. practice of selling food in Third World countries and using the cash to fund food aid programs.
Africans have complained bitterly about the impact those sales have on markets.
The lack of disciplines is significant because, as Canada learned in the long-drawn-out dispute about Country of Origin Labeling regulations in the United States, it could not achieve compliance with World Trade Organization rulings until it was granted the right to retaliate by imposing tariffs on U.S. products.