Developed countries’ $900 mn farm subsidies harm environment, markets: New Zealand Minister

Todd McClay

About $900 million worth of annual subsidies provided to farmers in developed countries contribute to climate change and harm world markets, according to New Zealand Trade Minister Todd McClay who is also the Vice Chair of the World Trade Organisation’s (WTO) ongoing 13th Ministerial Conference in Abu Dhabi.

New Zealand, known for its high-quality safe food exports, operates without providing financial support to its farmers, he told the Emirates News Agency (WAM).

In contrast, the top trade official criticised the nearly $900 million in subsidies provided to farmers in wealthier countries, asserting that these subsidies often lead to environmental harm and distort world markets. Despite recognising the need for food security, he insisted that such measures must not negatively impact global markets.

Minister McClay also addressed the issue of public stockholding, a practice that allows countries, especially those in the developing world, to stockpile food reserves to feed their people.

“I think they made a fair case around food security. Governments have a right. They have an obligation to ensure that they can feed their own people,” he told WAM in an interview during MC13.

While the minister agreed on the necessity of such measures, he stressed the need to balance this with the impact on world markets and countries that want to trade freely.

“We just have to get that balance right. It is up to WTO members to decide. They will talk about those issues here and that over a period of time make commitments and reform in both of those areas.”

Fisheries subsidies

The top trade official also touched on the issue of fishery subsidies, a problem that New Zealand and a few like-minded countries have been addressing for nearly a decade. He noted the negative impact of these subsidies on fish stocks and smaller countries with flourishing fishing industries.

He emphasised the ongoing negotiations for a second stage to ensure sustainable fishing practices and fair benefits for nations with significant fishing resources.

Minister McClay pointed out “the strong case” made by the Pacific Island nations that despite having more than half the world's fish stock of tuna, they do not benefit because many other nations come and fish in their areas.

“They deserve a fair hearing here because I think they are right. We just have to make sure we are making constructive steps forward. We have an opportunity here [at MC13].

e-commerce, dispute settlement

Touching on e-commerce, the minister stressed its rapid growth and significance in global trade. He highlighted the need for clear rules to ensure that taxation and tariffs do not hinder the development of digital economies.

Minister McClay expressed optimism about reaching agreements and emphasised the importance of defining the rules governing e-commerce.

On the issue of the existing moratorium on imposing customs duties on digital trade, he acknowledged the majority's desire for its continuation. He urged a focus on defining the aspects of the digital economy requiring regulations to provide certainty to all WTO members.

Regarding the WTO's dispute settlement system, the top trade official emphasised its importance to countries like New Zealand. He expressed hope for a clear path forward and commended the efforts of WTO chair Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, in building consensus.

The New Zealand official highlighted the exceptional facilities in the UAE and expressed optimism about the ongoing ministerial meeting's potential positive outcomes.

New-Zealand-UAE bilateral trade

In discussing New Zealand -UAE bilateral trade, Minister McClay emphasised the strong relationship between the two countries. “The UAE is a close friend of ours.”

He highlighted the potential for growth in trade, particularly in high-quality, safe food products.

The minister expressed commitment to progressing negotiations on New Zealand-UAE Comprehensive Economic Partnership Agreement (CEPA) and reaching a mutually beneficial deal.

In conclusion, Minister McClay thanked the UAE government for their hospitality and expressed optimism about the success of the WTO meeting. He acknowledged the challenges but stressed the importance of making progress across various issues, signalling the commitment of delegations to stay engaged until solutions are reached.