The federal government’s plans to strip the Canadian Wheat Board of its single marketing desk for Prairie wheat and barley have been welcomed by Canada’s partners in the Cairns Group as a “positive contribution” to global grain trade.
The group of 19 ag exporting nations, whose representatives wrap up their three-day ministerial-level meeting Friday in Saskatoon, specifically called out the Canadian government’s plans for praise in their joint end-of-meeting communique.
The federal government’s planned reforms were hailed in the communique as “a positive contribution to improving productivity, promoting growth and enhancing the multilateral trading environment.”
In a separate release from Canada’s Agriculture Minister Gerry Ritz, Australia’s Trade Minister Craig Emerson said that “following a remarkably smooth transition to an open market, our economy and farming businesses, both large and small, have benefited from an open grain market.”
For example, Emerson said, “in the very first year after deregulation of Australia’s single desk, our grain farmers exported to more than double the number of markets.”
In the broader trade picture, the Cairns countries noted the benefits of a multilateral rules-based system for international trade “were evident during the global financial crisis,” and that trade has since rebounded from a sharp drop seen during the resulting economic downturn.
That said, the Cairns Group ministers noted, “the slow growth prospect can become a source of pressure to introduce trade-protectionist measures.”
Multilateral trade talks haven’t fared well under such pressures, with the Cairns countries noting “it has become clear that we have not made sufficient progress to conclude the Doha round (of World Trade Organization) negotiations by the end of 2011.”
While “after 10 years, an agreement still remains elusive,” the WTO negotiations on agriculture “have taken us far in terms of addressing distortions,” the Cairns Group said.
However, agriculture “remains one of the most highly trade-distorted sectors,” the Cairns countries said, and most WTO members’ existing commitments leave them with “considerable scope… to increase levels of protection and distort international trade” through subsidies and other means.
While some ag-exporting nations, including Canada, have sought bilateral deals with other trading partners in the wake of the standstill at the WTO, the Cairns countries acknowledged that “the benefits which might be secured through further improvements in market access multilaterally, far exceed the benefits which may achieved through bilateral and regional trade agreements alone.”
The upcoming eighth WTO ministerial conference, set for Dec. 15-17 in Geneva, Switzerland, “presents an opportunity that cannot be missed to assess the situation and take decisions on the way forward in the Doha negotiations,” the Cairns Group said.
The Canadian Cattleman’s Association, in a separate statement Friday, said it supports the Cairns Group ministers’ assessment that countries need either to conclude the decade-long Doha round with a “comprehensive and ambitious agreement” or to “determine an alternate process to achieve these objectives.”
The Cairns countries also encouraged “large economies” now considering domestic ag policy reforms, such as the U.S., Japan and the European Union, not to put off such reforms “waiting for better times.”
The proposed reforms, in some cases, “can have the potential to offer direct benefits in terms of improved productivity and budgetary relief and also significant positive knock-on effects for the global trading system,” the Cairns countries said.
Specifically, the current Common Agriculture Policy (CAP) discussions in the EU and talks toward a new U.S. Farm Bill “provide an opportunity for real reform.”
The Cairns Group also noted that efforts to open up trade and ensure predictability can be undermined by individual nations’ “overly complex and restrictive sanitary and phytosanitary measures and technical regulations, including food labelling requirements.”
On that point, the Cairns Group also noted a Canadian initiative to organize an international meeting in 2012 on the issue of the “unintended low-level presence” of genetically modified product in exports of ag commodities.