Long-term hope for NZ trade

By FRAN O'SULLIVAN assistant editor

Wim Kok has a sobering message for New Zealand agricultural exporters looking for a quick resolution to the stalled World Trade Organisation talks.

The former Dutch Prime Minister - who this year issued a ground-breaking report on the upcoming European Union enlargement - says 2004 will prove a "lost cause" for global trade liberalisation.

But, says Kok, the forces of agricultural protectionism within the European Union will diminish in the long term: "The taxpayers will see to that."

In an interview in Auckland this week, he pointed to the huge pressures on European budgets caused by an ageing workforce. Kok predicts that when the EU enters its next major budget-setting exercise for 2007, taxpayers will cut back strongly on farming subsidies in favour of meeting social costs.

The EU - currently responsible for more than one-fifth of global trade - will become the world's largest economic bloc next year as 10 Eastern European nations with 75 million people join the EU's 375 million people from 15 nations.

But its inability to speak with a common voice on foreign and security policy will be a handicap.

Kok adds that the EU will continue to look outward, presenting a good market opportunity for New Zealand exporters. "It will not be a Fortress Europe."

He currently heads an EU taskforce examining employment challenges in Europe which suffers from a lack of young skilled labour.

Other factors which will prolong the WTO's stalled Doha Round include the need for a new EU trade commissioner when Pascal Lamy's term expires.