The year 2013 has become a key date for world trade and European policy after the conclusion of the World Trade Organisation and European Union summits this weekend. By then nearly all agricultural export subsidies in richer countries will be phased out, giving poorer ones much freer access to these markets. The EU's new multi-annual budget will run until 2013, meaning that existing farm payments continue until then. But they will now be subject to a fundamental mid-term review, making them vulnerable to profound change.
The decisions pose major long-term questions about the role of agriculture. This is centrally important for farmers, food industries and the states where these interests are most important, including Ireland. But it is not only their concern. The EU budget continues to be dominated by agricultural payments because this is the most important common policy. The prolonged negotiations on this budget round show it is a major constraint on economic effectiveness. Much more needs to be spent on areas such as research and sustainable development and there is no visible willingness to expand the budget beyond the exceedingly modest 1.045 per cent of gross EU output this one represents.
Overall it is a better deal than might have been expected, which is a tribute to Tony Blair's EU presidency role and the readiness of the German chancellor, Angela Merkel, to broker a compromise. The agreement shows the EU is back on track as a politically functioning entity after it was knocked sideways by rejection of the constitutional treaty in France and the Netherlands. For Ireland it is a good deal for many sectors, agriculture included. It removes uncertainty and clears the way for the EU's economic and political renewal.
"A real but modest step forward" is how WTO director general Pascal Lamy described the surprise breakthrough in Hong Kong. Since its foundation in 1994, the WTO has expanded both its membership and the frontier of sectors it is trying to liberalise, slowing the pace at which it can achieve consensus. Wisely, Mr Lamy recognised this and scaled back excessive ambitions to reform trade in agriculture, services and non-agricultural goods in one fell swoop. Instead, this compromise has been achieved, which will be fleshed out in further negotiations.
The issue of development has now entered the bloodstream of the WTO and will stay there, however unsatisfactory and unbalanced activists find this deal. Global economic policy co-ordination has improved this year and the voice of the poorest is beginning to be heard. The two decisions mean the Government must now explore how to respond to these new realities. Already farm payments have been decoupled from production and farmers' roles in preserving the environment recognised. Ireland must find a new balance between the sometimes contradictory values of open world trade, a proper role for agriculture and our increasing commitment to world development.