Crawford Falconer, chairman of the agricultural talks for the WTO Doha Round, followed up his release in late December of four working documents on domestic supports with release on January 4 of eight documents on market access. Progress is being made on market access, but the large number of nuances makes it hard to grasp what the final outcome will be.
The seventh year of trade policy negotiations under the Doha Round of the WTO has begun. A first session in Geneva will last two weeks and draw on progress made since last September. The Doha round began in November 2001 and was originally scheduled to end on Jan 1, 2005. While the talks have been much too slow, keep in mind that the Uruguay Round began in 1986 and the agreement creating the WTO from the General Agreement on Tariffs and Trade did not take effect until January 1995.
Freer trade in dairy products was partially left behind when NAFTA began in 1994. It was mostly excluded in the U.S.-Canada relationship and provided with a 10-year transition for U.S.-Mexico and Canada-Mexico trade in most products and a 15-year transition in the highest volume product, nonfat dried milk. Nonfat dried milk trade becomes duty free on January 1, 2008 at a time of high prices for nonfat dried milk and changes in international trade.
Dry beans are one of the commodities with a 15-year transition in NAFTA implementation even though they account for less than 1 percent of U.S. harvested crop acres and about 110,000 metric tons of yearly exports to Mexico. As with white corn, dry beans have been a traditional staple of the Mexican diet and are facing lower demand as diets become more diversified. Mexican production is about 1.2 million metric tons (MMT) per year by 300,000 farmers on 4 million acres. NAFTA has smoothed out shipments year to year, but U.S. exports to Mexico are only 7 percent of the market.
Just a year ago the Mexican corn market was in turmoil with sharply higher prices for corn tortillas, a staple of the diet at about 150 pounds per capita per year and a major food for many low income people. The market has stabilized since then and appears to be prepared for the ending on January 1, 2008 of the 15-year transition under NAFTA. Mexico is already a major importer of U.S. corn and volumes are expected to increase in 2008.