WTO Public Symposium 2003: Session VII- Sustainable Agriculture and Animal Welfare

Organized by the Global Animal Welfare Movement

Panel Moderator: Dr. David Wilkins, Director of Eurogroup for Animal Welfare

The Global Animal Welfare Movement organized this session on non-trade concerns to address the highly controversial consideration of animal welfare in future negotiations regarding the Agreement on Agriculture (AoA). Different views on domestic (Green-box) support for farmers held to higher animal welfare standards, tariff/quota arrangements allowing preferential access for specially produced goods, capacity building in developing countries, and non-discriminatory labeling to indicate production methods all contribute to the debate. The Eurogroup for Animal Welfare seeks to achieve via moderate advocacy the introduction, implementation and enforcement of animal welfare legislation in the European Union.

Panelists and Viewpoints

Bob Norris, European Commission

Animal welfare is an issue of increasing importance because of the rising public awareness and consumer selectivity regarding the effects that treatment may have on animals. The European Commission (EC) believes that there should be limitations on how food is prepared, and this value demonstrated by established conventions in the EC, as well as by legislation in individual member countries. Still, the EC is often accused of protection when it articulates its legitimate concern for animal welfare.

It is important that animal welfare provisions not impede trade, but it is equally important that WTO members who apply high animal welfare standards be able to maintain them. The EC is encouraged by the Agricultural Chair's proposal to keep animal welfare provisions in the Green box - Higher standards do tend to raise prices; therefore compensation would probably be in order. Unless one feels that the existing environmental Green-box payments are being abused, he needn't worry that another provision for animal welfare would be exploited.

Paul Martin, Agricultural counselor at the Canadian Mission to the WTO

It is true that every country has the right to maintain its social choices in terms of high animal welfare standards. In fact, we in Canada keep such high standards and find that the WTO does not interfere with this choice. The WTO does and should, however, impinge upon a nation's ability to impose on others its values and the costs associated with its particular social choices by means of clamoring for market access.

Canada, a member of the Cairns Group, is skeptical of whether subsidies paid to farmers to compensate for particular costs can at the same time be called "non-trade distorting." In economic studies, costs are aggregated, and the prices of feed and other inputs are constantly changing. It is very difficult, therefore, to measure and separate out exactly what contributes to particular costs in any economic exercise, and we would ultimately have to rely upon some study to estimate the amount of subsidization to provide as compensation for added costs due to animal welfare standards. Any approximation of this sort would be a big political affair leading to another trade-distorting production subsidy. The Cairns Group not only strongly objects to such subsidization, but we also question whether there's even a problem here. Why should farmers not just incur their own costs? Estimating individual costs for the distribution of non-distorted individual subsidies is no simple task, and it is especially not amenable to policing by the WTO. Hypothetically, how could one country manage to prove that another country's economic modelers are wrong in a dispute?

The push for market access for subsidized products would merely be another way for countries to use economic power to impose their own standards and social choices on others. This is not threatening to large exporters like the US and EC, but it is threatening to small ones, many of which are in the Cairns Group. The EC's push for mandatory labeling to indicate production methods is not a subject that should be included in the new Agricultural Agreement. The debate belongs instead in the discussion of the Agreement on Technical Barriers to Trade, which is not being renegotiated with Agriculture. The Cairns Group also considers this Technical Agreement's current treatment of labeling to be adequate and does not consider any expansion to be necessary. The Cairns Group does feel that the existing environmental regulations in the Green box are being abused, but that question is beyond the scope of this discussion.

Mara Burr, Special Counsel on International Trade Policy to the Humane Society of the United States (HSUS)

Representing a the total membership of 7.5 million people worldwide, the Humane Society of the United States and the Humane Society International promote increased market access, not protectionism, and we consider agricultural subsidies to be generally destructive. We disagree with Paul Martin's view, however, in that if consumers are willing to spend the Dollar, Euro, or Pound on food that is made according to their social values, then they should have enough information provided to them so that they can make that choice. The Humane Society hopes to work with the developing world toward our mutual benefit, as markets capable of sustaining a demand for products made according to animal welfare standards do exist.

Francisco Lima, El Salvador, representative from a developing country

El Salvador has recently negotiated a free trade agreement (FTA) with the United States. Identifying strategic avenues for market access is not something that is easy for a country like El Salvador to do, but we have formed a body of businesses, NGOs and civil society to consider how we can best make use of the FTA. Understanding that commercially it might make sense to cater to niche markets created by animal protection standards, it is important to us that we be able to inform our producers of how such opportunities are to be found.

Alexander Thiermann, USDA, OIE

The OIE is a standards-setting body which sets guidelines for 164 member countries on animal health and disease. The group has recognized the correlation between animal health and human welfare and has therefore made it a key issue of scientific research for 2001-2005. Four key topics focus on performance (rather than prescriptive) criteria to guide WTO negotiations on animal welfare: land transportation, sea transportation, humane slaughter (with a sub-group on religious practice), and killing for disease control.

Further Comments by Panelists and Delegates

Who Will Pay for Higher Standards?

One European delegate projected that higher standards will dramatically increase costs not only in niche markets, but also across the mainstream production market, causing a real problem in the European agriculture industry. Panelist Paul Martin responded that, though there may be a problem in the EU, it does not constitute an issue to be addressed in the WTO. Panelist Bob Norris counterposed that it would be difficult to justify allowing domestic industry (like egg production in the UK) to go out of business if the WTO ultimately comes to prohibit additional payments for animal welfare under Green-box provisions.

A delegate from Latin American raised a concern about who will potentially pay for the costs of higher standards imposed by the EU. The fact that the state will have to pay most of it is a huge concern for developing countries. The final costs will be passed on to developing countries' governments who will simultaneously be obliged to reduce export subsidies by the same external forces. Paul Martin concurred with his respective concern that we might end up with a system that exports the costs of Europe's social decisions to other countries. Bob Norris, however, maintained that any subsidy for differences in standards would simply be a compensation for that single marginal cost. Mara Burr commented that all subsidies should be scrapped, with the exception of those to compensate for cost associated with environmental protection. The Humane Society is concerned for the welfare of all animals, including humans, and does not want developing countries to have to bear any unmanageable burdens associated with animal welfare if doing so would have them struggle more to provide needed social services.

Another Latin American delegate raised the question of what might be the scope of additional Green-box payments whose appropriate values would be difficult to determine in the setting of many traders for a single commodity. Complications would undoubtedly arise in quantifying the amounts by which costs differ in various places, over a variety of standards, and from year to year. Since there would be a diversity of standards in a system of multiple producers, how would competitiveness be preserved without the emergence of protectionist measures? Bob Norris assured that, since there is an ongoing debate about what level of support will be allowed in the Green box, we can be guaranteed that the payments implemented will be monitored closely and continuously. Paul Martin suggested that, to the extent that the EC has funds available, perhaps it should apply them toward educating consumers who are actually interested in buying niche goods, rather than toward forcing other countries to foot the bill for providing excess information to all consumers.

Animal Welfare Standards Outside the EU?

Another delegate from Latin America sought to rectify two perceived misunderstandings among panel members. First, subsidies contribute to damaging the environment, rather than to improving it. Second, animal welfare standards are not higher exclusively in the EU. Argentina's processes for producing meat, for example, are very rigorous, and the country manages to maintain these high standards without providing subsidies. This demonstrates that the key to animal welfare and other non-trade concerns is to produce less in terms of quantity, but at a higher level of quality.

Bob Norris responded that Europe sees a need for subsidies only in the more intensive production sectors like poultry, dairy and eggs. The EU's preferred condition is to have a multilateral framework for ensuring animal welfare. This may be far off, but as we move towards it, perhaps more countries will sign on to improve standards, and we can ultimately stop paying Green-box payments once the field is leveled. In the meantime, however, the nature of these payments would guarantee that they would be monitored with diligence.