Jun. 14, 2004

WASHINGTON - Tim Groser, the New Zealander who chairs the World Trade Organization's agricultural talks, is at this moment the most powerful man in world agriculture and also one of the least known.

By late July, free trade advocates expect Groser to convince agriculture negotiators for all the members of the WTO that they should to establish a "framework" agreement on the content of those negotiations. If they fail to agree on how to cut tariffs and domestic and export subsidies, it's likely the Doha Development Round that started in 2001 will fail.

Groser has spoken little in public since his appointment in February. He participated June 3 in an extraordinary hour-long videoconference with 400 farmers from 70 countries who were meeting in Washington under the auspices of the International Federation of Agricultural Producers. Groser revealed himself to hold the views of the consumate agriculture trade professional, but also to be influenced by the experience of New Zealand, which once heavily subsidized and controlled its agriculture but has shifted toward free markets and advocates that other countries follow the same course.

'Unfinished business'

Groser said the agriculture negotiations are "absolutely the political key to this development round." Even though agriculture makes up only 12 percent to 13 percent of world product trade and even less of all trade if services are included, he said, agriculture represents "the biggest piece of unfinished business" in 50 years of multilateral trade agreements.

The WTO, Groser said, "cannot solve of all of agriculture's problems. It can only negotiate opportunities. We are not negotiating outcomes." He said he hopes that the Doha Round will create greater opportunities and that international development agencies will help the developing countries increase their ability to produce agricultural products. He also said he is "sometimes worried about the low status" developing country leaders have given to agriculture during the last 50 years. He noted that when New Zealand reduced subsidies and controls, farmers found that New Zealand still had many other problems to solve such as slown transportation in getting products to foreign markets.

U.S. farmers have said Brazil and other advanced developing countries should not be able to have developing country status, which allows them to avoid reductions in subsidies or tariffs like much poorer developing countries, but Groser said he does not believe the negotiators will agree on a new category for those countries. Groser said he believes "the answer" to this question will lie in negotiations on special and differential treatment for those countries. Groser said he believes countries like Brazil "will reform," but said "forcing them to do it is not realistic."

Groser also told a questioner from Senegal that West Africans "should be encouraged" that they "raised their profile" with their recent WTO cotton case. "To me it is inconceivable that we could conclude the Doha Round without a very significant deal on cotton." But he also warned West Africans who have said they do not want "to be submerged" in the agricultural negotiations that they should recognize the agriculture negotiations are "a train" and that they should should "attach (their goals) to a train that's moving." Groser told them they should "preserve the political achievements of the cotton initiative and make sure it is moving in the round."

Subsidies

Groser said he considers the European Union offer to eliminate its agricultural export subsidies to be "conditional" on other countries meeting European demands because the offer by EU Trade Commissioner Pascal Lamy and EU Agriculture Commissioner Franz Fischler was "an offer of some vision but was extremely sensitive to our friends in the EU."

Groser also said he doesn't think the negotiators will cap so-called Green Box subsidies that are not supposed to be trade distorting such as income payments that are not related to a specific product, conservation payments or agricultural research. But he urged countries that believe another country's payments are trade-distorting to sue in the WTO. "I've never been impressed by a label," Groser said, advising the farm leaders that countries sometimes try to apply labels and "pretend a policy" is not trade distorting.

Groser said there are two views of the Green Box. "The guys without the money look at this in fairly simple terms. You've got millions to spend and we've got nothing. The guys with the money (the developed countries) have not just a political but social problem" of trying to adjust to market agriculture "not by the way of revolution but evolution." Noting that economists say "all funds are fungible," Groser said it is not possible to "to give a dollar without having some trade distortion." But he said the Green Box expenditures are less trade distorting and that developed countries "can reasonably say don't block our exit strategy" from trade distorting subsidies."

Peace clause

Groser also said he believes a decision on whether the Uruguay Round peace clause that prevented most WTO lawsuits over the negative effects of farm subsidies will be renewed "will be decided in the political end game of this negotiation." Noting the recent Brazil case that apparently has found U.S. cotton subsidies to violate WTO rules, Groser said the developed countries may have a point when they ask the developing countries, "Could you please accept we are making a contribution rather than pursue us."

Asked by National Farmers Union President Dave Frederickson, the host of the event, whether the negotiations would deal with currency fluctations, Groser firmly said they would not be dealt with. Groser said he was a Treasury official in New Zealand when President Nixon ended the fixed exchange rate for the dollar and that New Zealand had to learn to live with flexible exchange rates. Groser said he understood that after the 1996 U.S. farm bill, the rise of the dollar "put immense pressure on U.S. farmers" that may have led to the 2002 farm bill that most agriculture negotiators consider a step backward in market liberalization, but that the negotiations would not deal with exchange rates. Groser said that as a New Zealander, he has "come to a very crude view - 'get over it and live with it.'"

View All News