Sutton foresees 'seismic shift' in world trade

Agricultural nations such as New Zealand are looking at a "seismic shift" in world trade negotiations, says Trade Minister Jim Sutton said.

He said the economic superpowers were seriously looking at ending export subsidies.

"We are standing on the brink of what appears to be a major shift in the international trading system," the minister told the Deer NZ annual conference in Taupo yesterday.

Sutton said that in the current Doha development round, the economic superpowers had agriculture as a vital part of the talks, and had registered a readiness to see a date for ending export subsidies.

"The significance of this is huge," he said. "For more than 50 years they have been defending the use of export subsidies.

"Their recognition that export subsidies will have to go in this negotiation is an enormous step."

The shift would be seismic - equivalent to when agriculture was included for the first time a decade ago as an integral part of the Uruguay Round of world trade talks.

Government research had assessed the overall benefits from the Uruguay Round - the last big round of multilateral negotiations - as having been worth at least $9 billion to New Zealand over its 10-year implementation period, as well as producing 17,600 jobs throughout the economy, including 2000 in agriculture.

Exporters had also gained from firmer trade rules, a strengthened disputes settlement system and the dynamic effects of a world economy stronger than it would have been without the Uruguay Round.

But the Uruguay Round had given only a toe in the door to agriculture, which had remained one of the most heavily protected trade sectors.

"The Doha development round has even greater potential."

Sutton said that at the same time, a World Trade Organisation disputes panel had ruled that the United States' subsidy regime for its cotton producers was illegal.

Effectively, it had told Washington to halt much of the lavish aid it gives the country's cotton farmers: a decision that went to the heart of the debate over reforming world farm trade.

- NZPA