World Grain - December 2007 - 6

from the editor-in-chief

Global support fails to
produce easy win for Doha

o issue is of greater importance to the
future well-being of the global grain
and grain processing industry than
the successful conclusion of the Doha Round
negotiations being conducted under auspices
of the World Trade Organization. Failure of
the round, which suddenly does not seem
impossible, would write finis to more than
five years spent in trying to secure an accord
aimed at, among many goals, opening global
markets to grain and products. These negotiations cover one of the wildest swings ever
witnessed in global grain trade, one in which
demand has fallen and risen at a speed and
in a dimension unparalleled in this industry's
long history. That failure might come just as
the importance of unencumbered trade has
been made evident by year's amazing price
swings seems catastrophic.
The specifics of what is at stake are well
known. In the wake of the Uruguay Round,
which wrote rules governing agricultural
trade for the first time, the Doha Round could
best be viewed as solidifying that progress.
Doha is meant to write finis to agricultural
export subsidies and to effect a dramatic
reduction in domestic crop supports. The
progress achieved by the Uruguay Round,
if modified to the degree now under consideration, would translate into fundamental
restructuring of trade in grain. Seldom have
trade proposals been as balanced as what has
been attained in recent talks.
Much of the progress toward acceding to

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Morton I. Sosland
Arvin Donley
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Chris Lyddon
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demands for opening trade and reducing supports has been facilitated by the past year's
strength in grain prices. One has only to look
at how far the United States (U.S.) had gone in
its willingness to negotiate "amber box" limits
on domestic supports. America has agreed to
a cap between $13 billion and $16.4 billion,
compared with the annual limit of $19.1 billion in the Uruguay Round. Accepting the lower cap was facilitated by current "amber box"
support expenditures being at only $11 billion.
Considering that at the start of 2007, U.S. negotiators refused even to consider a $17 billion
ceiling, the impact of markets is striking.
Because of the U.S.' newfound flexibility
and a similarly positive stance by the European Union (E.U.), blame for negotiating failure
is placed on developing nations, particularly
India and Brazil. Both have refused to come
anywhere near to matching the trade liberalization accepted by the U.S. and the E.U. They
assert that their agricultural sectors are more
susceptible to expanded imports and that the
developed nations still want to restrict their
exporting opportunities. Brazil particularly is
critical of U.S. limits on sugar and ethanol.
Not only have trade patterns changed
hugely in the course of the Doha Round
negotiations, but attitudes among peoples
have been transformed. According to the
Pew Global Attitudes Project, a worldwide
public opinion survey, economic globalization - the main product of successful trade
negotiations - is embraced as positive by

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a majority of the publics around the world.
But the survey also found an evolving view
of globalization "that is nuanced, ambivalent
and sometimes inherently contradictory."
The latter was evidenced by the waning support on the part of Americans and Europeans, which contrasts dramatically with nearly universal approval of global trade among
the people of China and India. It found that
support for free markets has increased notably in recent years in Latin America and
Eastern Europe, where people have enjoyed
increased personal incomes and strong total
economies. The surveyed publics in all 47
countries accept the benefits of increasing
global commerce and free market economies
Pew noted, adding that most believe international trade is a net benefit.
Support like that, it would seem, should
mean that final adoption of improved trade
rules would be eagerly accepted, and the
global grain and grain processing industry
could anticipate a great new era in which
markets could function to the advantage of
all participants. Alas, politics have intervened, as evidenced by the declining backing
of Republicans in the U.S., once the strongest proponents of opening trade. All of this
reaffirms that continuing strong industry advocacy is essential if trade progress is to be
achieved in 2008.
Morton I. Sosland
Editor-in-Chief

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