Fonterra Welcomes Breakthrough In Wto Round
Fonterra Chairman Henry van der Heyden today welcomed the agreement reached in Geneva in the early hours of this morning
on a framework for the WTO Doha Development Round.
“This is the breakthrough we have been looking for. It more than makes up for the disappointing set-back in Cancun last
year, and puts the Round back on track for a substantial outcome for dairy farmers,” Mr van der Heyden said.
For Fonterra and other dairy exporters the major achievement is the agreement that all export subsidies will be
eliminated. “While the date for that is still to be negotiated, nailing down that commitment has been a major objective
of New Zealand farmers for decades.
“Export subsidies are the single most damaging and trade-distorting weapon in the protectionist arsenal. They depress
prices for all involved in the world market. The wording in the framework now means that we can look forward to a time
when this constraint on prices will disappear completely. That is good news for dairy farmers and will be reflected
directly in Fonterra’s bottom line.”
“The second key element in the framework agreement for us is market access. The framework is less precise and ambitious
in this area. A disappointing amount of flexibility has been granted to so-called ‘sensitive products’ in developed
countries. But we are pleased that the text specifies that there will be substantial improvement in access for all
products, including sensitive products. This is to be achieved through a combination of expansion of tariff-rate quotas
and tariff reduction.”
The agreement also contains useful commitments to further define and limit domestic subsidies to farmers, particularly
in rich countries.
“This agreement means we can now move into the final phase of the negotiations, which will be about translating these
commitments into real numbers,” Mr van der Heyden said.
Noting that the negotiation of the framework was only achieved after a long and exhausting effort in Geneva, Mr van der
Heyden paid tribute to the New Zealand negotiating team.
“I would like to thank Jim Sutton and the New Zealand officials for their untiring and dedicated efforts in
representing New Zealand’s interests in Geneva”. Mr van der Heyden also praised the efforts of the chairman of the
agricultural process, New Zealand ambassador Tim Groser.
“New Zealand has played a key role in achieving this outcome.”