Agriculture crucial in world trade talks

Press, 13 June 1986, Page 12

Agriculture crucial in world trade talks

Agricultural trade is the most difficult but most important issue for the biggest players in the forthcoming negotiating round of the General Agreement on Tariffs and Trade, according to Sir Ronald Trotter. After 40 years of no effective international rules much of the agricultural sectors of the United States, the E.E.C. and Japan is almost completely divorced from world prices, he said. Agriculture has been put in the “too hard” basket in all previous multilateral negotiations, said New Zealand’s Minister of Overseas Trade, Mr Moore, recently. Sir Ronald is the chair-' man of Fletcher Challenge, Ltd, and the international president of the Pacific Basin Economic Council and he gave a speech this month to the Wellington branch of the New Zealand Institute of Internatinal Affairs. “The extent to which the three major powers in world trade can come to grips with their agricultural sectors will essentially determine whether this new G.A.T.T. round makes real progress or just tails off into almost indefinite discussions,” he said. New Zealand and Australia had much to gain from the big trade powers tackling agriculture, he said. But he questioned whether the E.E.C. could still seek to preserve mul-

tilateral trade policies. “Is the European Community now so big, so complex, so politically demanding that it has got past the point where it can change its policies to accomodate the rest of the world?” he asked. In a recent speech the British Foreign Secretary, Sir Geoffrey Howe, said the political and economic paradoxes of food today were extraordinary — there was no other word for it. “And they derive, at least in part, from one simple but misguided idea. It is that sun, soil and rain are not sufficient; for modern agriculture to succeed one extra vital fertiliser is essential — taxpayers’ money liberally applied,” said Sir Geoffrey. He went on to say that the reckless “subsidy race” must be addressed as it damaged world trade, held back development and wasted re-

sources. Now agriculture was on the G.A.T.T. agenda. "The sheer impossibility of continuing as we are will before long compel reform,” said Sir Geoffrey. “The longer it is put off, the more traumatic it will be. Prolonged economic mismanagement can ruin nations as effectively as wars.” Sir Ronald said that the credibility of the multilateral trading system was at stake in the new round and the price of a stalled round would be very high. “Textiles, safeguards and all the new issues like services, important though they are, will not set the key developed countries at complete loggerheads with one another — agriculture may.”

“The failure to integrate agriculture into the world trading system has so far grievously affected the interests of only a small group of countries — New Zealand, Australia, some of the relatively efficient Latin American producers and a number of small sugar producing countries.

“But it has been a timebomb ticking away and the prospect of really major damage is just around the corner.” He said New Zealand had been a classic case of a country whose economic policies had been manipulated by sectoral interests and the over all wealthreducing effects were only just being recognised by the public.