24 November 2008
350 billion reasons to get Doha sorted for ‘NZ Inc.’
“New Zealand will be bound for the top half of the OECD if the Doha trade round can be completed successfully,” said the president of Federated Farmers, Don Nicolson, in response to the positive noises emanating from the APEC summit in Peru.
“The New Zealand Treasury tells us we need an unprecedented increase in the average annual rate of economic growth just to hit the median OECD income per capita. If the Doha trade round is concluded successfully, it will the proverbial magic bullet for the economy.
“There are 350 billion reasons for the world to end the pestilence of agricultural subsidies, tariffs and restrictive market practices. Each one is called a US dollar,” Mr Nicolson said.
The World Bank’s Global Economic Prospects 2004 report highlighted that agricultural producers in the OECD receive US$300 billion in subsidies each year. If the Doha trade round can be concluded successfully, the benefit to the global economy is estimated to be at least US$350 billion.
Federated Farmers’ single biggest fear from the current global crisis is a return to protectionism. Protectionism is now seen as one of the major reasons why the share market crash of 1929 turned into a global economic depression. By contrast, New Zealand agriculture has been proudly subsidy free since 1985. Despite predictions other countries would follow suit, New Zealand’s example for much of the past 23-years has been just that, an example. This makes the current APEC summit and the pledge to kick start the Doha round of trade talks, so important for every single New Zealander.
“Sometimes it takes a sharp recession to focus political minds on what is really important,” Mr Nicolson added.
“It makes no sense whatsoever for OECD countries to pour US$300 billion of subsidies just to prop up inefficient agricultural producers. This is as bad for the global economy as inefficient agriculture is for the global environment.
“Subsidised agriculture is a cancer on trade as the protectionism it masks is the single biggest threat to global economic recovery.
“Given just how bad the global economic outlook is, perhaps, finally, politicians will realise they’ve wasted billions of dollars to achieve nothing. Surely they can find a better use for those subsidies, such as on health, education and infrastructure.
“I am absolutely convinced that if we crack Doha, New Zealand will make better progress in reaching the top half of the OECD. We produce food with lower food miles and much better green miles than almost any other country and we do it all on a level playing field,” Mr Nicolson concluded.