Dairy groups upset at WTO talks failure

By Chris Mercer

- Last updated on GMT

Related tags: Dairy, International trade, World trade organization, Eu

Failure to reach an agreement on global trade has upset dairy
industry officials from the EU and beyond, creating more
uncertainty about the future of the sector.

Dairy associations representing the EU and New Zealand said they were deeply disappointed that World Trade Organisation (WTO) negotiations had broken down.

Talks on a global trade agreement collapsed earlier this week after five years of wrangling, largely because of irreconcilable differences over agriculture support.

The failure leaves the dairy industry treading water on key issues going forward, such as export subsidies, tariff lines for dairy commodities and market access.

Dairy associations in Europe called on governments and the European Commission to set out their positions and thinking, particularly in relation to the planned review of Common Agricultural Policy reform in 2008.

"Whilst negotiations can always be put on hold decisions on investment and structure cannot, and the industry deserves to know where it now stands,"​ said David Curry, chairman of Dairy UK.

The European Dairy Association asked the Commission "to be reserved" in relation to further CAP or EU dairy market reform, seeing as no WTO deal had been reached.

Outside of Europe, there was dismay in New Zealand's dairy industry, which had hoped a WTO deal would open up new avenues for its exports.

"It is the only route we have to achieving across the board liberalisation of trade in dairy products,"​ said Earl Rattray, chairman of the Dairy Companies Association of New Zealand. Dairy brings in 20 per cent of New Zealand's export revenue.

It remained unclear this week whether the WTO talks could be revived and, if so, how soon.

Peter Dawson, policy director at Dairy UK, said before the talks broke down that it was possible a deal could be done in the autumn.

The mood in the EU was more pessimistic this week, however. Mariann Fischer Boel, European agriculture commissioner, said: "A time out has been called in the talks. That does not mean they cannot pick up again in the future. But to be honest, I don't think this will happen very quickly. There is no new deadline."

The US has taken an increasing share of the blame for the WTO failure in recent months, matching the fierce criticism launched at the EU before talks in Hong Kong at the end of last year.

"We were prepared to walk the extra mile if a final deal was within reach. Unfortunately, the US preferred to stand still,"​ Boel said.

Joop Kleibeuker, secretary general of the European Dairy Association, told DairyReporter.com​ recently the EU and others, including India and Brazil, were increasingly annoyed at the US position on market access.

The EU, however, has seen its flexibility in negotiations restricted by several member states. A group of countries, led by France, demanded last autumn that the Commission should offer no more concessions than those already laid down in its current CAP reform.

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