Clark thinks WTO talks are in deep trouble

Ottawa, Ontario - Veteran Canadian trade negotiator Peter Clark thinks the world trade talks are in deep trouble.

He says director-general Pascal Lamy of the World Trade Organization (WTO) is running a high risk in pressuring the 152 nations involved in the talks to try to reach the outlines of a deal by June 23 or 26, and to follow up within 10 days with a meeting of trade ministers.

Clark says this may not work because a deal remains so elusive the whole thing could collapse.

We are very dubious that this (Lamys proposal) is doable, Clark has written in an e-mail to Ontario Farmer.

There are too many unresolved issues in every part of the negotiations, and particularly in the NAMA (agriculture) text.

After reviewing some of the details, such as the lack of a proposal to resolve issues in the rules text, Clark writes failure at this stage could be fataland with all the hype could cause considerable damage to the WTO.

He says ambassadors at Geneva dont want to settle for a deal that involves only agriculture, but want a broader deal in which some of the issues in agriculture could be traded off against other issues in other sectors, such as financial services and market access for manufactured goods.

Its this broader set of tradeoffs, called horizontal negotiations, that Lamy is pushing to happen by June 23 or 26.

On the rules text, Clark notes that the U.S. wants to roll back the clock to eliminate one of the provisions of the Uruguay Round of negotiations so it can once again exercise more power with anti-dumping trade actions.

One of the key issues here is cross-subsidization rules for agriculture that were included in the Uruguay Round. This is the issue on which the U.S. lost WTO panel rulings against its sugar and cotton subsidies, and the issue on which Canada launched its current challenge against U.S. corn, wheat and soybean subsidies.

Clark says the U.S. Congress is strongly behind this demand for this roll-back in the rules. On the other hand, its a key issue for others at the trade talks who are angry about the continuing record-high levels of U.S. farm subsidies. The U.S. and other wealthy countries with high farm subsidies have been shifting their money into programs that they hope will escape WTO disciplinary action.

Clarks analysis pictures the WTO negotiations caught between a rock and a hard place. On the one hand theres the risk that pushing ahead with the process thats been frustrating for seven years will lead to total collapse, a greatly weakened WTO and a push by the U.S. and other big-clout nations to bully weaker countries into bilateral free-trade deals.

Another option is to start over with a different negotiating process, one that would recognize major differences among the 152 nations. That, says Clark, will result in a long list of exclusions that will be attacked by critics as unfair, discriminatory, imbalanced and free riding.

He says all of this could lead to a high-pressure, last-minute deal this summer, one that has more to do with optics than substance.

Clark said, While I have not been wrong for seven years (in commenting on this round of negotiations) I would not be sad if I were now.