Participants were told the changes will not necessarily be negative for the Canadian trade.
In July 2004, a framework was established which sets the general outline for completing the Doha round of multilateral trade negotiations through the WTO. Negotiators are now working out some of the modalities ahead of the December 2005 trade ministers meeting in Hong Kong, said Professor James Rude, of the Department of Agribusiness and Agricultural Economics at the University of Manitoba.
The basic framework calls for the elimination of export subsidies, both direct and indirect, but implementation dates have yet to be negotiated, said Rude. Harmonization formulas to reduce domestic supports and tariffs are also included in the framework, although the depth of the cuts is still to be determined, he said.
The elimination of export subsidies may not occur until 2015 to 2017, said Rude, citing a 10-year implementation period.
"So we're going to be waiting a long time," said Rude. He added that a large percentage of the subsidies in the international markets have already been dealt with, and future cuts will not result in significant monetary impact for the grains sector.
"You don't get much bang for your buck with cereals," he said.
While the framework calls for the elimination of export credit programs longer than six months, Rude said virtually all of the Canadian Wheat Board's programs are under six months. Some premiums could pose a problem for the
CWB, Rude said, but the discomfort for Canada should be less than for its competitors.
Regulations regarding State Trading Enterprises, or STEs, would most directly affect Canada, said Rude. The framework calls for the elimination of guaranteed borrowing and underwriting of losses, which would negatively impact the single-desk CWB, said Rude. The CWB has relatively few assets and would see an increased cost of borrowing without the government support.
However, he added that of the C$6.4 billion borrowed by the CWB in 2003, only C$558 million was for operating expenses and new credit, as the majority was tied to government debt.
A couple of the options Rude saw for the CWB included moving the rescheduled debt off the CWB's books, providing an inflow of capital to start a contingency fund and adopting an approach more similar to the Australian Wheat Board model.
While the future of single-desk trading enterprises is built into the negotiations, the CWB could deal with the framework, said Rude.
Rather than doing away completely with STEs, Rude saw the issue as more of a bargaining chip to seek further concessions elsewhere.
The Cartagena Protocol on Biosafety is another international effort that will affect Canadian grain movement. Dale Adolphe, chairman of the Canada Grains Council's biotech committee, and Blair Coomber, director general of international trade policy with Agriculture and Agri-Food Canada, discussed the latest developments in the protocol, with particular attention to Article 18.2a, which deals with the transboundary movement of bulk grains.
Some 119 countries have ratified the agreement. Canada has signed on to the biosafety protocol but has yet to ratify.
About 67% of the world's grain production and 64% of the total grain exports comes from countries that have not ratified the protocol, said Adolphe. In addition, 95% of the world's production of GMO crops comes from countries that have not ratified the protocol. Canada exports to virtually all of the ratified countries, said sources. (OsterDowJones Commodity Wire. News Provided by COMTEX)
