WTO future in doubt

August 4, 2014

Trade Minister Tim Groser says the collapse of  the World Trade Organisation (WTO)’s Bali deal  poses fundamental questions about the body’s future role in international trade.

A trade facilitation agreement to cut red tape at borders had been reached in principal in Bali last December at a meeting of trade ministers from the WTO’s 160 member countries.

Although important to efforts to streamline global customs procedures its larger significance had been in the impetus it would have given to finishing the Doha round of trade negotiations, which aims to slash tariffs and agricultural subsidies but which has been languishing since 2008.

That is all in tatters now after the deadline to sign off the Bali deal passed this morning without agreement from all members.

Groser said any efforts that WTO members had been ready to make to move on to a larger deal tackling tariffs and subsidies might now have been dashed by the failure of the trade facilitation deal.

“God knows where this leaves that – if there is no Bali deal then by definition there is no post-Bali work programme.”

The WTO’s director-general Roberto Azevedo said the latest failure threw the organisation’s future into doubt.

“This not just another delay which can simply be ignored or accommodated into a new timetable – this will have consequences.”

Azevedo said the WTO was important not just for its role in negotiating new agreements but also in preventing countries from backsliding into protectionism.

The countries which will be hurt most by this are those which can afford it least.

He said smaller countries had the most to fear if the WTO was to lose its importance in the world trading system.

“The major economies will have other options open to them. But the smaller, more vulnerable economies may not – they’re the ones that may no longer have a seat at the table.”

Groser said the WTO’s mandate as policeman in international trade disputes could come into question if it was no longer seen as a credible institution.

“What will happen if a legal finding about some major country comes through that is politically difficult for that country to implement?

“What will they do? That is the sleeper issue here.” . . .

Liberalisation of trade on a global scale has been moving at a glacial pace but it has been moving forward.

The collapse of the Bali deal and the implications for further liberalisation and the policing of international trade disputes is of great concern.

New Zealand already has free-trade deals with important trading partners including Australia and China and it will continue with bi-lateral and multi-lateral deals.

But any threat to the WTO is a threat to global free trade and a win for protectionism, politics and bureaucrats at the cost of producers and consumers.


Labour wants non-tariff barriers

April 4, 2014

Labour is calling for a ban on imports of fruit from all high-risk areas.

Labour is calling on the Government to immediately ban the importation of fruit from high-risk areas after the discovery of the second Queensland fruit fly in Whangarei today, Labour’s Primary Industries spokesperson Damien O’Connor says.

“The Ministry for Primary Industries this afternoon established a 1.5km controlled area around Parihaka where the fruit fly was found. Fresh fruit and some vegetables will not be permitted to be taken out of this zone.

“However, Labour believes more drastic action must be taken until the pathway these pests took into New Zealand has been determined.

“It seems pointless to set up a controlled area when we are still importing fruit from Australian states such as Queensland and New South Wales which are struggling to control fruit flies.

“Labour wants fruit imported from these states immediately halted until the Ministry for Primary Industries can assure the public our crucial horticulture industry can be protected from these devastating pests,” Damien O’Connor says.

MPI is treating the discovery of a fruit fly in Whangarei very seriously.

. . . MPI Deputy Director General Compliance and Response, Andrew Coleman, says the insect was trapped in the Parihaka area of Whangarei, approximately 400m from where a single fly was found in January this year.

“However, all our information at this stage tells us this detection is a new find and not related to the January incident.

 “Queensland fruit fly has been found four times in New Zealand previously, including the January Whangarei detection. In all these earlier cases, increased trapping found no further flies,” Mr Coleman says.

MPI has responded promptly and field teams are already working in the area setting additional traps to determine if other fruit flies are present and providing information to residents.

“As in January, it is vital we find out if the insect is a solitary find or if there is a wider population in Whangarei.

“This insect is an unwanted and notifiable organism that could have serious consequences for New Zealand’s horticultural industry and home gardeners.  It can damage a wide range of fruit and vegetables,” Mr Coleman says.

MPI is working closely with international trading partners and the horticultural industry to minimise the risk to New Zealand growers and exporters.

The Ministry is defining a controlled area around the location of the fruit fly detection and the movement of fruit and vegetables out of this area will be restricted. MPI will provide extensive information about this in the near future and will work closely with the local community. 

“The Whangarei community were immensely supportive of our efforts earlier this year and we anticipate they will be again. It is, of course, disappointing that this situation has recurred.”

Mr Coleman says the most likely way that fruit fly can arrive in New Zealand is in fresh fruit and vegetables.

MPI has strict import requirements in place to minimise this risk.  All plant material and fruit that can host the Queensland fruit fly can only be imported if it meets our standards and these include measures such as approved pre-export treatment or certification of pest freedom by exporting countries. Air and sea passengers are prohibited from bringing fresh fruit and vegetables into the country.

“The Ministry is aware that fruit fly populations have dramatically increased in Australia in recent months and in light of the previous Whangarei find, we have been reviewing our importing requirements for fruit fly risk goods.”  

Andrew Coleman says it is important to bear in mind that MPI has to date been highly successful in keeping this insect threat out of New Zealand crops.

“This latest find demonstrates the benefit and effectiveness of MPI’s lure-based surveillance trapping network and the biosecurity system. 

“By setting traps for these pest insects, we are able to detect their presence early, have assurance about exactly where the problem is located and respond faster and more effectively where finds like this are made.”

Residents in affected parts of Whangarei may notice increased activity in their neighbourhood over the next few days as MPI staff go about their inspections and trapping.  MPI asks that people support this important work.

An infestation of fruit fly would have a serious impact on our horticulture but O’Connor’s call for a ban is an over reaction.

That would effectively be a non-tariff barrier, similar to the one the Australians used to stop the importation of our apples.

New Zealand spent years battling that through the World Trade Organisation. We don’t want to go back there as the defendant.


Free trade for ‘green’ goods

January 27, 2014

Freer trade could be one of the measures used to counter climate change:

The world’s biggest trading powers have unveiled a joint initiative to achieve global free trade in environment-related goods, as part of the fight against climate change.

The United States, European Union, China, Japan and several other developed economies said in a joint statement that the agreement would take effect once there is participation by a critical mass of members of the World Trade Organisation (WTO).

The WTO estimates that the global market in green goods, technologies and services – ranging from solar panels to wind turbines and water recycling plants – at some $US1.4 trillion annually.

The initiative gets round the WTO’s requirement for unanimity on trade deals, and is in line with new WTO chief Roberto Azevedo’s drive to break a decade-old deadlock in world trade negotiations by first tackling the most promising areas for agreement. . .

Any progress on freer trade should be welcome but will the definition of green goods be based on science?

Will it favour goods with a lower carbon footprint over those with a higher one, such as New Zealand meat?

If the proposal is ever put into practice will it make a positive difference to trade and the environment or just be another triumph for bureaucracy and politics which consumers and producers will pay for?


WTO delivers

December 8, 2013

The World Trade Organisation has delivered:

The World Trade Organisation (WTO) has agreed on its first-ever global deal aimed at boosting commerce. Analysts say it could add $1 trillion to the global economy.

The agreement – reached in Bali after marathon negotiations between trade ministers from 159 nations – simplifies trade procedures and also makes it easier for the poorest countries to sell their goods by reducing export barriers and allowing such nations more scope to use subsidies to safeguard food supplies.

It is seen as an important step for the WTO, which has struggled to make new trade agreements since being founded in 1995, the BBC’s economics correspondent reports.

“For the first time in our history, the WTO has truly delivered,” says WTO chief Roberto Azevedo. “This time the entire membership came together. We have put the ‘world’ back in World Trade Organisation.”. . .

The core of the deal is trade facilitation:

. . . This is about reducing the costs and delays involved in international trade. It is often described as “cutting red tape”.

Some analysts suggest the benefits could be large. An influential Washington think tank has put the potential gains to the world economy at close to $1tn and 20m million jobs.

It also estimates the cost of administrative barrier as double the cost of tariffs.

The rich countries have agreed to help the poorer WTO members with implementing this agreement.

Another important aspect of the Bali package is about enabling poor countries to sell their goods more easily. This part is about tariffs, and also quota limits on imports.

Rich countries and the more advanced developing countries have agreed to cut tariffs on products from the poorest nations.

The head of New Zealand’s International Business Forum says a new global trade deal agreed by the World Trade Organisation (WTO) will mean cheaper and faster exports.

International Business Forum executive director Stephen Jacobi says exporters’ goods will be fast-tracked through international customs as the facilitation part of the deal cuts down on red tape for traders.

“The main benefit of this agreement is that it will become easier and faster and cheaper to move goods around supply chains, to export our goods around the world, and indeed to import our goods from other countries.”

Business New Zealand chief executive Phil O’Reilly says the WTO deal will boost the confidence of trade ministers meeting in Singapore to try to reach agreement on the proposed Trans-Pacific Partnership trade deal.

The deal marks the WTO’s first global trade agreement since it was created in 1995 and follows years of failed attempts to secure the required unanimous approval from all its members. . . .

British Prime Minister David Cameron says the deal could be worth more than £1 billion a year to British businesses and £70 billion globally.

“. . . By slashing barriers to trade, this deal will also provide a lifeline to the world’s poorest people. Helping developing countries to grow is not only the right thing to do, but it also increases potential markets for us all. So this really is win-win and the World Trade Organisation is to be commended for this historic deal.”

Trade restrictions mean people get less for what they produce and pay more for what they consume and this hurts poorer people and poorer countries hardest.

Freer trade is fairer trade and poorer people and countries have the most to gain from it.


Key calls for end to ag subsidies

September 8, 2012

Prime Minister John Key used his opening speech to the APEC forum in Vladivostok to call for an end to agricultural subsidies:

. . . TPP would not be a substitute for World Trade Organisation trade talks, he said. The reality was less-developed countries often weren’t included in trade negotiations like TPP, he said.

And while agreements like TPP dealt with barriers to trade and investment, they did not get to the heart of subsidies.

Key said World Trade Organisation negotiations were the key to tackling high domestic subsidies in many economies’ agricultural sectors. He noted the New Zealand experience through the 1980s and 90s following the removal of subsidies there.

“While there is some pain…farmers responded very quickly to the signals – cut costs, increased productivity,” Key said.

“This level of subsidisation is no longer affordable nor sustainable,” he said.

“Now is the time for leaders around the world to be bold,” Key said, calling on them to eradicate subsidies, and start down the road of deficit reduction. . .

The mid to late 80s were very tough years for farming here. But I don’t know a single farmer who would go back to subsidies and farmers we met in England and Europe in June were looking forward to the end of subsidies there too.

They said they’d rather be answerable to markets than at the whim of politicians and bureaucrats.

Agricultural subsidies distort supply and demand, add to costs for taxpayers and consumers and promote inefficiency.

Getting rid of subsidies will open up trading opportunities to the benefit of producers and consumers.


Two NZers too many for WTO?

September 7, 2012

Trade Minister Tim Groser has confirmed he’s keen on taking the top job at the World Trade Organisation.

With his background in negotiations and more recently politics he would be well qualified for the position, but qualifications aren’t the only consideration.

Geography counts too and there’s a feeling two from New Zealand could be one too many:

. . . So far, only two have said they want the job.

One is New Zealand’s Trade Minister Tim Groser, who starts with a double disadvantage: most diplomats say it is the “developing countries’ turn”, and New Zealand has already held the job once in the WTO’s 17 year history.

One trade negotiator said it would be “very peculiar” for two of the WTO’s first six chiefs to come from the same small, rich country.

Another said he regularly met Groser and said he was “very down to earth. But another New Zealander? I don’t think so.” . . .

Former Prime Minister Mike Moore headed the WTO from 1999 – 2002 and was generally regarded as doing it well. But his relatively recent tenure could handicap Groser’s bid.


Apples away!

November 30, 2010

The World Trade Organisation’s Appellate Body, has upheld New Zealand’s case  in the dispute over exporting apples to Australia.

This is great news for orchardists which has been welcomed by Trade Minister Tim Groser.

 “The appeal report upholds the thorough analysis undertaken by the WTO dispute Panel around risk assessment and the science at issue. These findings – reached by independent external arbiters – settle any debate.  This is good news for New Zealand apple exporters,” said Mr Groser.

 New Zealand has been seeking access into Australia for its apples since 1986 but has been barred from the market as a result of restrictive quarantine measures.  Australia has maintained that the alleged risk of introducing fire blight, European canker and apple leaf-curling midge justified the measures.

 After exhaustive efforts to resolve the matter with Australia, New Zealand took the issue to the WTO.  The WTO Panel report on the case was released in August.  Australia appealed. The Panel had found that all 16 of Australia’s quarantine measures, along with their Import Risk Analysis, were inconsistent with Australia’s legal obligations under the WTO Sanitary and Phytosanitary Agreement. The Appellate Body has now upheld the Panel’s core findings. 

 On a subsidiary issue – whether there were less trade restrictive measures available to Australia – the Appellate Body overturned the Panel’s decision on technical grounds.  But this does not weaken the central findings around risk assessment and the science.    

 “The Appellate Body has confirmed that Australia’s objections to New Zealand apple imports are simply not backed by the science.”

 This ruling opens the door to apple exports to Australia worth millions of dollars.

That’s not only good for our producers it will offer more choice, and potentially lower prices through more competition, to Australian consumers.


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