WTO Ministerial Meeting in Geneva

In contrast to New Zealand's progress with its free trade agreements, the Seventh WTO Ministerial Conference, held in Geneva from 30 November to 2 December 2009, did not achieve much.  Expectations were not high and the results did not defy those expectations.  The Conference was not a formal part of the stalled Doha Development Agenda, but it was an opportunity for political will to be shown.  Instead, the outcome was a resolution for political will to be shown sometime in 2010, which is the new goal for the conclusion of the Doha Round, which began in November 2001.

New Zealanders will remember the Conference mostly for the use made by the US delegation, in the context of agriculture discussions, of Turners & Growers’ July 2009 New Zealand High Court challenge, which alleges that Zespri is acting contrary to the Commerce Act 1986 and the Kiwifruit Export Regulations 1999 (which are themselves alleged to be in breach of the Commerce Act). 

The US delegation requested:

“That New Zealand please provide information on why it is that a key player in the New Zealand kiwifruit industry had to file legal proceedings in relation to collaborative marketing arrangements.  Additionally, we request that New Zealand please expand on the court documents alleging anti-competitive behaviour and abuse of Zespri's dominant position”.

There is an interesting context to this question.  One part of it concerns the high-profile public campaign Turners & Growers have been waging, with which the US question would seem to be connected.  Another part concerns the nature of the Doha agriculture negotiations themselves.  One of the “modalities” of these negotiations concerns the status of monopoly agricultural export State Trading Enterprises, which are a natural vehicle for export subsidies.  A 2004 draft text called for:

“elimination of trade distorting practices with respect to exporting state trading enterprises (STEs), including eliminating export subsidies provided to or by them, government financing and the underwriting of losses. The issue of the future use of monopoly powers will be subject to future negotiation”. 

The 6 December 2008 draft text calls for developed country STEs to be abolished by 2013, but is composed in a way as to eliminate the Canadian Wheat Board but not New Zealand’s Zespri, which is the only other notified developed country STE.  This is due to a footnote in the text crafted to exempt Zespri, which does not receive subsidies, from the proposed rule.  It may be that the US question was mischief-making, rather than a serious request for information.  However until the Doha Agreement is finalised it remains to be seen whether Zespri – which remains one of the last single-desk producer boards in a developed country – will come under further international scrutiny. 

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Related topics: International trade & investment; Connected Asia Pacific; International trade agreements

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