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PRI's Environmental News Magazine

WTO Showdown

Air Date: Week of May 23, 2003

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Agriculture is currently the biggest stumbling block in World Trade Organization negotiations. Edward Alden, Washington correspondent for the Financial Times of London, explains the implications to host Steve Curwood.

Transcript

CURWOOD: It's Living On Earth, I'm Steve Curwood.

Debates over genetically modified foods and agricultural subsidies are driving a wedge between Europe and the U.S. in the current round of World Trade Organization talks taking place in Doha, Qatar. Developed countries give their farmers hundreds of billions of dollars a year, either by paying subsidies on the export of goods, as the Europeans do, or on making up the difference to farmers if prices drop, as we do here in the U.S.

Edward Alden, Washington correspondent for the Financial Times of London is following the debate over this issue. He says the U.S. wants to lower subsidies which would even the playing field.

ALDEN: The Europeans subsidize their farmers more heavily than the U.S. subsidizes its farmers. And so, basically, the U.S. feels if there were an agreement that would bring those subsidies to roughly equal levels, the U.S. would come out well ahead.

CURWOOD: How likely do you think it is that this will go through, that the U.S. will get this reduction in agricultural subsidies?

ALDEN: I think the U.S. is not going to get anything close to what it's asking for. I think the most optimistic version is that the European Commission's proposal will get support in Europe, which would mean, still, a significant cut. They have called for about a 55 percent cut in these trade-distorting domestic supports, and a one-third average cut in tariffs. So that would be significant for us, not nearly as much as the U.S. has asked for. Even that, realistically, if it happens, is only going to happen after several years of difficult internal political wrangling in Europe.

CURWOOD: How big a deal is the subsidy question for the developing world?

ALDEN: Well, it's a very big deal because subsidies in advanced countries have the effect of driving down market prices across the world, both in the advanced countries and in the developing countries. So the elimination of subsidies could bring a lot of benefits to developing countries in terms of increasing the market price for their products. So they have a lot at stake in how the U.S. and the Europeans resolve this difference.

CURWOOD: What's the environmental impact of this, if it's not an impasse, very slow progress?

ALDEN: There is general agreement in the environmental community that the trade-distorting subsidies, the subsidies that are linked to production, are bad for the environment because farmers will take fields that they might otherwise have left fallow and plant them with corn or wheat or whatever other crop that gets subsidized. They, obviously, in drier climates they use water heavily in order to irrigate those crops, which is environmentally damaging. So I think there's general agreement it would be a good thing for the environment if those subsidies were reduced.

CURWOOD: Now, this is a tricky enough issue to have at the World Trade Organization, but at the same time, we're looking at another move by the United States. This country and a number of others have requested that the WTO look at this European moratorium on genetically modified foods. Americans say that under the WTO Agreement, Europe must prove scientifically that GMO foods are not safe before they can restrict the import. How deep is this divide?

ALDEN: This is a very fundamental divide. I mean, the European position is, well, the scientific evidence is uncertain. Yes, you cannot declare authoritatively that these products are unsafe, but there are many things that we don't know about them. It's a new technology. There may be problems that emerge over time. And therefore, we should have a right to regulate these in a way that takes that uncertainty into account. The U.S. position is, well, that's all well and good, but that's basically, as far as we're concerned, just an excuse for blocking trade. And the WTO will say, you really do need to be able to demonstrate some scientific basis before taking actions that are effectively an import barrier, because the result is the U.S. farmers who use these genetically modified crops quite heavily can't sell into the European market. So it's a very fundamental split.

CURWOOD: So, Edward, tell me, what do these debates about agriculture mean for the future, the fate of the World Trade Organization? You've got the U.S. going up against Europe. It doesn't look like they will come to much of an agreement over genetically modified foods. It seems that the subsidy issue is going to be a long, difficult path to resolution. What happens to the WTO itself in that kind of scenario?

ALDEN: Well, I mean, I think the difficulty is that the WTO is the only international organization ever created that actually has binding dispute settlement authority, that can tell its members through a process that's equivalent to a court of law what they can and cannot do, and whether they're upholding the rules that they agreed to. The difficulty is that the Europeans and the Americans really have pretty different notions of what those rules mean, and they want to organize their agricultural economies very differently. And I'm not certain that that's something that panels in the WTO--which are basically made up of trade experts, former trade bureaucrats and trade lawyers and others-- I'm not sure that those panels can really resolve those kinds of disputes. These are fundamental disputes between nations that need to be resolved through negotiations.

And I think the danger is that if the U.S. and the Europeans push the WTO too hard to try to resolve those disputes, they'll end up destroying the organization that they created. And I think that's the danger that everyone is aware of, and both sides try to tread at least a little bit gingerly on.

CURWOOD: Edward Alden is the Washington correspondent for the Financial Times of London. Thanks for taking this time with me today.

ALDEN: Thanks very much, Steve.

[MUSIC: Foday Musa Suso “Sunset” Pieces of Africa - Elektra (1996)]

 

 

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