Many commentators assume that the Doha round of World Trade Organization negotiations have already failed, and that failure would not matter for Canadians. Wrong on both counts.

After more than six years of hard work, technical negotiators are closing the gaps and it will soon be up to ministers to make the final difficult decisions. Canadian politicians need to consider the importance of a deal for the future of the world trading system, the growth prospects for developing countries, the benefits for consumers and the opportunities created for Canadian exporters of goods and services.

At the centre of the negotiations is agriculture, and Canada faces significant risks if this round of negotiations fails. Some think a WTO failure wouldn't matter because we have the North American free-trade agreement, or because we can negotiate bilateral deals with other countries. Unfortunately, Canada is an attractive market for some smaller partners but pales in comparison with the giants such as India, China and the European Union. We lack the clout of large economies when it comes to asking for concessions in bilateral trade negotiations.

This global initiative holds far more promise than negotiations with individual countries or regional blocs, especially for agriculture. Bilateral trade deals haven't reduced the most trade-distorting forms of farm support, particularly in Europe and the United States.

The agricultural trade reforms that can make a difference to Canada's agrifood exporters will only be achieved in multilateral negotiations. The proposals now on the table would cut trade-distorting support significantly and provide gains for Canada's grain, oilseed, red meat and food processing sectors.

A failure of the negotiations would be a lost opportunity to address some of the vexatious trade remedies that countries have been using – some say abusing – to protect domestic industries. For example, U.S. anti-dumping duties on pork and hogs have been a major trade irritant for Canadian farmers.

The biggest risk from failure is the potential to plunge the world into a period of deteriorating trade relationships that will further embitter long-standing tensions between the U.S. and the EU, and emerging conflicts with China. U.S. presidential candidates' threats to reopen NAFTA may be posturing, but they would have to be taken very seriously if the WTO negotiations fail.

If grievances cannot be resolved in the multilateral negotiations, there is also a significant risk that frustrated countries will increasingly turn to litigation, thereby putting the WTO under intolerable strain. Litigation can make things worse still if countries begin to ignore the WTO's rules and findings they dislike. In agriculture, there is a well-founded concern that, if the WTO loses credibility, food safety worries with no foundation in science will be raised as a red herring issue to block trade.

This round of negotiations started with the ambitious goal of raising the incomes of developing countries by expanding trade. These are markets that, coincidentally, hold the greatest promise for new sales of Canadian agrifood products, and also the ones that will lose the most if rich countries do not reduce their trade-distorting barriers and subsidies.

In responding to Doha round proposals, Canada has to reconcile its traditional export interests with its dairy and poultry import sensitivities. Walking away from the negotiations, as these industries suggest, is not a credible threat. This strategy forces Canada to accept the rules other nations negotiate for handling the developed world's most highly protected agricultural products. Supply management (i.e., Canada's dairy and poultry sectors) can survive the Doha round, albeit with some adjustments. But it is important for governments and the industry to recognize the need for, and to jointly develop a plan for, making these industries more compatible with a future of liberalized trade.

If the Doha round is to succeed, it will require everyone to compromise. We will not get all we want. Canadians should be insisting that our politicians take the lead in bringing their fellow politicians around the world to an agreement that will be good for everyone, including Canada and the poorest and neediest people in the Third World.

Karl Meilke is a professor of food, agricultural and resource economics at the University of Guelph and director of the Canadian Agricultural Trade Policy Research Network. The other authors are Michael Gifford, Centre for Trade Policy and Law at Carleton University; Alex McCalla, University of California at Davis; Karen Huff, University of Guelph; William Kerr, University of Saskatchewan; Kurt Klein, University of Lethbridge; James Rude, University of Alberta; and Robert Wolfe, Queen's University.

KARL MEILKE

March 30, 2008 at 6:05 PM EDT

Source: www.theglobeandmail.com