News Release
Franz Fischler
No.
24/03
March 31, 2003
WTO FARM TALKS: EU
COMMISSIONER FISCHLER VOWS TO PLOW ON
Speaking to journalists in London today, EU
Agriculture Commissioner
Franz Fischler regretted that WTO members failed to meet the March 31 deadline
to agree on the
modalities for the WTO agriculture negotiations:
"The
EU has been working hard to meet this deadline. Unsuccessfully, as it turned out.
We regret this. But missing this deadline is not the end of the world. Several
other WTO deadlines have been missed. Now we will have to plow on. More important
than a deadline is real effort to inject new dynamism into the negotiations, to
keep working to narrow existing gaps. We have to ensure that we can develop a
balanced set of modalities, which address the concerns of all the parties involved.
We have to concentrate our attention on pursuing the negotiations to ensure that
we can establish a comprehensive set of modalities and contribute to making the
Cancún Ministerial Meeting in September a success."
Fischler underlined that the EU had done its homework to move the WTO agriculture
talks forward.
"The
EU modalities proposal represents a middle way between extreme positions. It goes
a long way to meet all interests represented in the WTO: greater market access
for all; lower
trade-distorting farm subsidies; sharp reductions for all forms of export
aid; consideration of non-trade issues such as food safety and the environment—and
preferential, targeted treatment for developing countries. Our proposal also contains
hard figures on how to achieve these goals. But these are not things that we are
prepared to do on our own. If we are to make these substantial reductions to our
tariffs and trade-distorting support, we need, and want, our partners to go down
this same road. It is not only our export subsidies that can be viewed as trade-distorting
after all: what about bogus food aid, export credits and the pricing practices
of certain state trading enterprises?"
Commenting on the modalities debate as it currently stands, Fischler called the
draft proposal
which came out of Geneva "disappointing…It still leaves wide gaps between
the different members that still need to be bridged. To assume that all policies
are the same with respect to these trade-distorting elements is a mistake to say
the least. Double standards provide no basis for a comparison and this fact needs
to be taken account of in the establishment of the modalities."
He criticized the "notable absence of non-trade concerns" in
the draft.
"For societies from Mauritius to
Malta, from Bangladesh to Sri Lanka, farming is also about concerns about the
environment, food safety, safeguarding the supply of food and protecting the rural
way of life. The
Doha Declaration clearly states that they have to be an integral part of these
negotiations."
The Commissioner pointed out that the modalities draft still makes inadequate
provision for tightening rules on trade-distorting support. "I am referring
to the loophole that allows our colleagues on the other side of the
Atlantic to spend an extra US$7.4 in trade-distorting
subsidies under the so-called 'de minimis' rule. And the paper remains unbalanced
in its treatment of developing countries by facilitating exports by the competitive
developing countries, while undermining the preferential access on which the weaker,
and more vulnerable, developing countries depend."
Background
What
does the EU propose?
The EU proposals for modalities reflect a strong commitment to further reform
of the agricultural trading system while recognizing the need for special treatment
for developing countries, especially the most fragile economies and ensuring that
concerns such as the environment, rural development and animal welfare are taken
into account. Greater market access for all; a significant decrease in trade-distorting
subsidies; clear discipline for all forms of export aid; consideration of non-trade
issues and preferential, problem-oriented treatment for developing countries—these
are the key elements of the EU negotiation proposal.
By avoiding extremist positions and taking a
realistic approach, the
proposals should contribute to advancing the negotiations, offering a bridge
between the polarized positions of those who seek total free trade tomorrow and
those who fear any further trade liberalization in the agricultural sector. The
key elements of the EU's proposals are that import tariffs for farm products should
be cut by 36%; that export subsidies should be slashed by 45% on average; and
that trade-distorting domestic farm support should be reduced by more than half
(55%) provided that the burden is shared equally amongst developed countries in
particular. The proposal includes specific actions to give developing countries
a better deal as well as emphasizing the importance of addressing non-trade concerns
such as the environment, rural development and animal welfare.
The EU also calls for loopholes to be closed to create a level playing field for
all developed countries Under the so-called de minimis clause, farm subsides
of developed countries below 5% of the value of production are not included in
the calculation of the total amount of support subject to reduction commitments
(Aggregate Measurement of Support—AMS). Experience has shown that this has become
an important loophole for some WTO Members. The Commission proposes to abolish
the de minimis clause for developed countries. For example, the United
States currently spends $7.4 billion in trade-distorting farm subsidies under
the de minimis provision, which are not subject to reduction commitments.
Export credits for agricultural products used by other WTO members, food aid used
as a surplus disposal mechanism and cross-subsidization, price-pooling and other
unfair trade practices in exports via State Trading Enterprises (STEs) should
be identified and subjected to strict discipline.
What
are "modalities”?
"Modalities" represent the key-point of the agriculture negotiations
as they will determine the shape of the negotiations' final outcome. Modalities
will indicate the general objectives (including numerical targets as well as rules)
and the way to achieve them. For example, as regards tariff reductions, a modality
would be an average reduction of 36% with a minimum 15% reduction per tariff line
to be reached by, for example, 6% reduction over six years.
Modalities also comprise all the detailed rules to be incorporated in the WTO
Agreement on Agriculture, be it new rules (as for example the EC is pursuing on
export credits, food aid and geographical indications) or amendments to existing
rules (as for example on domestic support where the EU wants to include animal
welfare under the "green box"), or an effort to reach an agreed understanding,
as for example on food safety and the use of the
precautionary approach.
What
are "schedules”?
Once the modalities have been established, they will have to be converted into
"schedules," i.e., detailed offers to be presented by each member. This
is mainly an internal process, during which the EC will also have to decide which
products need to be given special treatment. The Doha Declaration foresees a very
tight program, as schedules should be presented no later than the Cancún Ministerial
(September 2003).
Following that, WTO Members will analyze each others' offers and try to overcome
any remaining differences concerning technical details of the schedules. This
will be done mainly through informal bilateral contacts between Members.
The whole package of different agreements (agriculture and all the other issues
of the Doha Development Agenda) should then be agreed before January 1, 2005,
as a single undertaking as foreseen in the Doha Declaration.
For
more information go to:
http://europa.eu.int/comm/agriculture/external/wto/index_en.htm
Press Contacts: |
Willy Hélin
202-862-9530
|
Wilfried Schneider
202-862-9523
|
|
Maeve O'Beirne
202-862-9549
|
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