Tim Groser: It's all about market access to agriculture

It must be truly terrifying to be a Green MP. To have the responsibility of saving the planet from so many threats, and yet be understood so little. What catastrophe is it this time, you ask. According to Greens leader Jeanette Fitzsimons, the WTO ministerial meeting in Hong Kong next week may cause Auckland's electricity grid to crash - not to mention accelerate global warming.

Wow! Run for cover if the WTO meeting starts to gain traction.

In a sense, we should celebrate that the only real opposition to trade liberalisation in New Zealand today comes from the Green Party and, to the left of them, activists and one or two academics whose agenda is basically a continuation of the anti-capitalist, anti-market tradition of the far left.

How different it is in so many other countries where trade is such a divisive issue - as it was in New Zealand 20 years ago. I happened to be in one of those countries last week - Canada.

Canadian views on agriculture trade issues are a study in confusion. On one hand, Canadian grain exporters want what we want - fundamental reform. On the other, the dairy, pork and poultry producers want to freeze world trading conditions as they are.

For all WTO members with a stake in this negotiation, the first requirement is to have either power or credibility. Only a handful have power (EU, US, and Brazil and India as leaders of the key developing country group, the G20). For everyone else, it is about credibility.

Canada must be careful. It, like us, has excellent people. But that cannot be a substitute for coherent policy.

The key to progress in Hong Kong is obvious: we need a compromise on agriculture market access. Some positive decisions are essential.

Present strategic thinking is that Hong Kong will be followed by a further ministerial meeting in a few months. This is necessary but there is an obvious trap: it may create a perverse incentive to kick all issues forward in the naive belief that this would "create pressure" on the other side to capitulate. It won't work.

To avoid a fudge on all the important issues will require tremendous political leadership from the most powerful countries and help from smaller constructive players, like New Zealand.

The best strategy is for that leadership to be demonstrated on the first sticking block (agriculture market access) early in the week, to allow more balanced progress in areas of strength to many of the developed countries with major political problems in agriculture.

Two such areas stand out: trade in services and improved access for industrial goods (the WTO jargon is Nama, or non-agriculture market access).

The EU, Japan, Korea, Switzerland and many others with difficulties in agriculture could then see something positive coming out of this meeting.

On the other hand, these powerful and rich countries need to moderate, but not remove, their demands for liberalisation from the developing countries.

Developed countries should remember that they took eight previous multilateral negotiating rounds to lower their average industrial tariffs from around 50 per cent after World War II to less than 5 per cent today.

The major developing countries will benefit from liberalising their economies in these areas, but they too face political resistance to too rapid change. We once again need the "c" word to emerge: compromise.

This will not be the last multi-lateral round, although legions of armchair tacticians will tell us it will be, as they did in the last Uruguay round.

Every negotiation builds on what has occurred in the past.

The only reason we are looking at eliminating export subsidies today (a certain consequence of this round, provided it is brought to a successful conclusion) is precisely because we achieved in the predecessor Uruguay round a modest 24 per cent reduction in the volume of subsidised agriculture exports.

This result has underwritten the extraordinary expansion of the New Zealand dairy industry. There could be even better news in the future.

All negotiators need to find this balance - determination to use such a rare opportunity as a round to good effect, balanced by a realisation that in such human and political affairs, the excellent is always, not often, the enemy of the good. Such a round will even help us to pay for an improved electricity grid for Auckland.

* Tim Groser chaired the agriculture negotiations and was WTO ambassador before standing for National at the last election. He will attend the WTO ministerial meeting.