WTO denies it wants to destroy Swiss farming

Supachai Panitchpakdi, outgoing head of the World Trade Organization Keystone

Supachai Panitchpakdi, head of the Geneva-based World Trade Organization (WTO), has said Switzerland can continue to subsidise its multifunctional agriculture.

In order to unblock the stalled Doha Round of trade-liberalisation negotiations, he does not intend to separate the agriculture dossier from other, less problematic, ones.

“No one is going to force Switzerland to undertake devastating agricultural reforms,” Panitchpakdi said in an interview with the Geneva newspaper Le Temps on Saturday.

He said it was acceptable to defend multifunctionality, which describes the fundamental link between sustainable agriculture, food safety, territorial balance and maintaining the landscape and the environment.

“It’s a good thing to want to preserve the Swiss landscape and rural atmosphere – subsidies can be paid perfectly well to that type of agriculture,” he said. “On the other hand, this assistance should not be allowed to ruin the rest of the world.”

“That is why we’re discussing support that is tied to neither production nor price,” said the former Thai deputy prime minister.

In broaching the elimination of price imbalance, Panitchpakdi tried to be reassuring. “We don’t want every single Swiss farmer to lose his job,” he said.

Hot potato

When asked about the importance of keeping the agriculture dossier in the Doha Round of trade-liberalisation negotiations, Panitchpakdi underlined that “that maintains pressure on negotiating”.

“After the Uruguay Round [a trade negotiation from 1986 to 1994 which transformed the General Agreement on Tariffs and Trade into the WTO], we had to wait until Doha for discussions to really get going again,” he explained.

Panitchpakdi said the WTO was “not interested” in abandoning the agriculture dossier to make progress on other topics that appeared to have fewer sticking points.

Farm subsidies are one of the most contentious issues in the Doha Round of free-trade talks, which is aiming for a draft accord on lowering barriers to commerce – with a focus on making trade fairer for developing countries – by the end of this year when trade ministers meet in Hong Kong.

Talks have stalled over a divide between the rich developed countries and the major developing countries (represented by the G20). Agricultural subsidies are the most significant issue on which agreement has been hardest to negotiate.

The EU has agreed direct export subsidies should go, but neither it nor the United States or Japan, other big subsidisers, are ready to talk about getting rid of everything.

Dead subsidies

Panitchpakdi realises, however, that times are changing – the expansion of Europe for example – and that it is necessary to change with them.

“I am an economist,” he said. “My ideal would be to do away with all distorting means of support. But things are different for politicians, who decide on reforms – they have to please their electorate.”

In a separate interview on August 1, Panitchpakdi said rich nations would eventually have to stop subsidising their farmers. He added that it was not a question of if, but of when, subsidies would be abandoned because everybody knew they were unsustainable.

“There is no argument over whether we should get rid of them or not, subsidies are dead,” he said. “In a globalised world, we do not have a place for this kind of unlimited and unsustainable expenditure.”

swissinfo with agencies

Key facts

In 2004 Swiss agricultural production totalled SFr10.6 billion ($8.4 billion) and government contributions to the sector were SFr3.9 billion.
In 1990 there were 92,815 farms in Switzerland. In 2003 there were 65,866.
In 1990 the agricultural sector employed 253,561 people. In 2003 it employed 193,179.
In 2003 Swiss farms had an average yield of SFr55,029.

In brief

Supachai Panitchpakdi has been head of the World Trade Organization (WTO) since 2002.

On September 1 the former Thai deputy prime minister will take over as head of the UN conference on trade and development, UNCTAD, when he hands over to former EU trade chief Pascal Lamy at the WTO.

Launched in November 2001, the Doha round of trade negotiations was to have concluded last year.

However, negotiations failed at the ministers’ conference in Cancun, Mexico, in September 2003.

The 148 members now hope to conclude the round by the end of next year.

The next key stage will be a ministerial conference in Hong Kong at the end of this year.