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.
