GOOD news on the trade front was dominated again this week by a sinking dollar, firming US dollar prices for dairy commodities and more trimming of EU dairy export subsidies.
Meanwhile, the trade leaders of the European Union have stirred the nest of traditional Euro agriculture by sending a letter to the WTO suggesting they are prepared to walk away from the use of export subsidies in order to make progress in the Doha round.
The Brussels position has been well-known to most trade negotiators for a good while but this very public move has stirred a mixture of protest and support from within Europe -- mostly support -- from agriculture ministers in the expanding EU.
The French and Irish farm ministers have been quick out of the blocks to cry foul, but so have the supporters of this stance, who say the EU can now no longer afford the massive support for certain industries and must deal with the huge farm and consumer changes that will happen with the expansion of EU nation membership from 15 to 25.
Support for the move is so far much stronger than criticism within Europe.
A statement of position like this may just be a stunt, shooting a major salvo across the bows of the US and the staunch protectionists in Japan and Korea, and restating the moral high ground that the Europeans have safely taken each time into the aborted Doha meetings.
It is important to recognise the EU makes the statement that all its export subsidies are on the table with a couple of major provisos -- that "market access" is effectively improved and that there is major action to reduce trade-distorting farm subsidies.
Given the tolerance of the Japanese and Koreans for the concept of slashing major tariffs, and the defiance of the US farm sector against any reduction of farm support, it may well be the safest offer that the Europeans ever make, as they may never have to deliver on it.
Imagine George W Bush being altruistic about farm support as his ratings plunge from the Iraqi mess.
A few things are different now -- a couple of weeks ago the WTO ruled on a Brazilian appeal that the massive US cotton subsidies are in breach of existing rules. The US will naturally appeal but the ruling has increased the need for the US to get involved in Doha.
With a club of 25, EU budgetary priorities are shifting to the new and young in their midst.
The EU has also started to implement a restructure of its farm support which in the case of dairy is already (thought to be) having a positive impact on commercialising the market.
The restated offer simply puts the wood on others to act and match the compromise. The pulse of the Doha Development Round of the WTO is weak.
The next hope for resuscitation of this patient lies in meetings planned for July, but it is clear from the background reading of the environment since the failure of Cancun that nothing much has changed in the positions of the players, nor has the WTO made it clear how it handles a process of facilitating 146 people in the world's biggest workshop.
But then again, serious progress at WTO has always been a belief for the eternal optimist.Weekly Times (Australia):
