Saturday, December 03, 2005

Fran O'Sullivan: Clark lays down cards

I am sure Helen Clark was wearing the trousers when she rolled up to the European Union's Brussels headquarters this week as the latest international leader to whip the "naughty school-boy" of global trade into shape.

Peter Mandelson - British Prime Minister Tony Blair's old political sidekick - is in a neat ideological bind as he finds his way into promoting Europe's interests as the EU's latest trade czar.

The pair - who know each other well - are both old-stagers from "progressive" political circles. He could reasonably expect "Clark the Europhile" to sit easily within the structured confines of European-style politics.

But when it comes to promoting agricultural liberalisation she is proving herself nothing but self-interested - almost a Friedmanite - pitting herself squarely against Mandelson on the concessions on agricultural liberalisation she believes Europe needs to make to secure a successful global trade round.

Clark clearly believes there has not been enough focus on market access, which is the "third leg of the trade stool", when it comes to reducing agricultural protectionism.

Europe - and the United States (but that is a different story) - has made progress on reducing subsidies at both domestic and export level.

But the tight quota system by which Europe still controls access to what is the world's richest consumer market means that even if other countries (such as New Zealand) can produce agricultural products more competitively than the Europeans they will not necessarily be guaranteed unbridled access.

This salient point does get lost during the jargon heavy reportage of the world's trade ministers' lengthy gavotte.

Brussels, however, is not going to lift its skirts unless big agricultural producers such as India and Brazil (and the US) also throw open their doors more comprehensively to European industrial exports.

Trade Negotiations Minister Jim Sutton - who is now in the last lap of his World Trade Organisation swansong - has been urging the WTO heavies that they should all be "flexible".

No one close to the action now believes that the WTO's Hong Kong meeting in 10 days will do other than agree a template on which the real negotiating concessions will be nailed at another meeting about March or April.

Sutton - like all trade ministers - has to publicly play WTO cheerleader far more often that his own farmer instincts would stomach.

But the reality is not lost on Clark.

The deep irony is that the Prime Minister chose Europe, rather than New Zealand, to make the most critical public concession I've yet heard from a Government politician on the upcoming global trade talks.

And that is that there will be nothing much in it for this country's exporters unless the international trade heavies can persuade the EU (it is not the only recalcitrant) to lever open its doors for more agricultural products from developed and developing nations alike in the Hong Kong talks.

New Zealand does not usually "lift the diplomatic" veil too high when it comes to international tradespeak unless our own self-interest gets unmasked.

The "subtleties" are not lost in Brussels where a number of European MPs (who believe the WTO's Doha Round is being skewed in favour of industrialised agricultural exporting nations) have attacked New Zealand's position as "self-interested".

The New Zealand press contingent - side-tracked by latest instalment of "Hunt the Winston" - downplayed her EU admission.

But it was a major exercise in truth-telling that maybe only a smaller player can get away with without losing its own remaining privileged EU quotas.

In an interview with Berliner Zeitung, Mandelson struck out at the tough stance Paris, in particular, has adopted against further farm liberalisation. "With its criticism, France has done no favour to itself or to the EU," he told the German daily.

"In this way, they [the French] have given the impression that they are the single European brake [on progress], while other EU countries were ready to make more concessions."

Mandelson could have added - but chose not to - that even now-wealthy nations such as Ireland and Belgium are singing the French tune on protecting agricultural markets.

But Mandelson's key admission is that Paris obstructionism has created room for big agricultural players - such as Brazil, Australia, Canada and the US - to intensify pressure on the EU ahead of the Hong Kong talks.

"Big agricultural exporters are now flexing their muscles and demand a complete liberalisation of farm trade."

That Mandelson left New Zealand off this list is not a signal that we do not count among the world's top agricultural exporters.

Clark made it abundantly clear to Brussels that our own competitiveness is down to the fact that we faced up to reality two decades ago that subsidies ultimately skew economic performance. "There is little else we can give," she says.

But other nations can.

This is really the subtext to the public spat between Clark and Commonwealth Secretary-General Don McKinnon over his suggestion that democracy might take second place to trade when it comes to putting food on the table of the world's poorer nations.

The Commonwealth houses many African, Caribbean and Pacific nations which would keel over without preferential access to the EU market.

Clark, concerned that other struggling democracies will follow Zimbabwe's path, condemned his remarks as ill-judged.

But McKinnon is right to put the emphasis on economic prosperity as the WTO round reaches endgame.

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