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News Releases
Peter Mandelson
No. 93/05
October 24, 2005
DOHA FOR DEVELOPMENT
Speech by EU Trade Commissioner Peter Mandelson
at the
Informal Meeting of EU Development Ministers
Leeds, UK
24 October 2005
In this speech to EU Development Ministers in Leeds, EU
Trade Commissioner
Peter Mandelson sets out the case for
cuts in EU
agricultural tariffs as part of the
Doha
Round. He notes that, while there is a trade-off in agriculture for EU interests in services and
industrial goods and to reduce similar barriers in the
US, ultimately reductions are needed to fulfil the Doha
Round's development goals. He argues this is true both
in agriculture, but also to unlock the development
potential of wider trade in services and
non-agricultural goods and to reach not just the
agricultural poor, but the urban poor in advanced
developing countries such as Brazil and China.
Commissioner Mandelson:
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argues that the Hong Kong Ministerial meeting is "on a
knife edge."
-
cites the EU's preferential access schemes for
agricultural imports and recalls that Europe has the
best record in the developed world in providing
agricultural market access for the developing world.
Mandelson says that Europe will never allow itself to
"be cast as selfish or indifferent."
-
argues that, "if we want greater market access in
advanced developing countries for our top quality
manufactures and services, we have to give increased
agricultural market access in return...If we want the US
to reform its own domestic subsidy regime – and if we
want the Brazilians to cut industrial tariffs and open
up on services – we have to move on agricultural
tariffs, there’s no other way."
-
argues that "there are huge differences in competitive
advantage among developing countries. That is why we
should allow continued margins of preference for poor
country producers. It is also why developing countries,
especially the poorest ones, will not be required to
make the same tariff cuts in their own markets that the
rich countries will be expected to make. But Europe and
other developed countries cannot hide behind the
concerns of those faced with preference erosion in order
to escape from the obligations contained in last year’s
Framework Agreement. The world’s poor do not only live
in the smaller and more vulnerable countries that
benefit from our preferences: they also work the land in
big agricultural exporting countries such as Brazil or
China."
-
argues that trade in industrial goods and services is a
development issue. Eighty percent of developing countries’ exports
are accounted for by manufactures, and south-south
opening of markets can unlock major gains. Services liberalisation will strengthen infrastructure in
developing countries - a vital precursor to development.
-
repeats his call for all developed countries to "follow
the example of the EU’s
Everything But Arms proposals
and by ensuring that there is tariff and quota-free
access to EU markets for everything, including
agricultural products for the Least Developed
Countries."
"We are as you know at a crucial point of decision this
week in the WTO trade talks. I do not exaggerate when I
say that the Hong Kong ministerial meeting is on a
knife-edge.
"My message to you this afternoon, and the message I
appeal to you to take back to the most senior level of
your governments, is a simple one. Let us decide this
week to give Doha a chance. Let us demonstrate that the
European Union is ready to take the necessary steps to
put trade policy at the service of development. Let us
act in Europe’s long-term economic and strategic
interests and reinforce the Union’s claim to be a force
for good in the world.
"For all the criticisms made, some legitimate – which we
are seeking to address – some less so – to which I will
refer later – Europe can take a lot of pride in its
trade and development record. Our goal of an integrated
trade and development policy, that we implement on your
behalf, is the fruit of years of work to improve policy
coherence between these two areas.
"I submitted earlier this year to the European
Parliament, and to EU governments, a report on
developing countries’ access to our markets. Its
findings can be summarized in one sentence: the European
Union now, today, already gives developing countries a
chance to climb out of poverty, through trade, but we
can do better.
"First, we have been steadily and progressively opening
up our markets to poor countries, for the last thirty years,
through preferential trade arrangements. In 2003, no
less than 40% of our imports came from developing
countries.
"Secondly, our policy is particularly supportive of the
efforts of the poorer and most vulnerable exporters.
Sixty-three percent
of the whole of LDC exports (excluding petrol) to the
rich nations of the United States, EU, Canada and Japan
put together were bought by us in 2003. The European
Union is by far the most open market for the world’s
poorer countries. Of course, we can support further the
trading efforts of poor countries, but we should never
allow ourselves to be cast as selfish or indifferent.
"Third, the trade preferences we offer are actually used.
The proportion of developing country goods entering the
EU at zero tariff or at reduced rates of duty increased
in the four years from 1999 and 2003 – the latest for
which we have full figures - from 71% to 79%. Only 3% of
goods imported from the ACP [Africa-Caribbean-Pacific] family of nations were
charged full duties in 2003. And LDCs benefit, of
course, from Everything But Arms that permits tariff and
quota-free entry for all they export to us.
"And frankly, we compare well with the large
industrialised trading nations. This is not a beauty
parade. But the data show that we take in close to 70%
of LDC agricultural exports, against around 17% for the
United States. It is simply not true that the
Common
Agricultural Policy prevents the world’s poorest
countries getting access to European markets. The facts
show otherwise. When I hear the argument made, as it is
from time to time in the Member State I know best, that
if only Europe scrapped the CAP, the problems of poverty
in Africa would be solved, I despair of decent people’s
informed debate.
"So, where do we go from here? As the European Union, we
have responsibilities to the Doha negotiations that we
must fulfil, including in the field of agriculture.
There are actions that we cannot avoid either
economically and morally and are essential to unlock
the potential development gains of the Doha Round.
"Our approach is to maximise development gains in all key
sectors of the negotiations, while at the same time
pursuing Europe’s own legitimate interests in wanting to
widen market access opportunities for our own providers
of top quality goods and services, especially in the
growing middle class markets of rapidly emerging
countries.
"I interpret my negotiating mandate in this broad sense:
to be pro-jobs in Europe and to be pro-poor in the
world. I see no inconsistency in these responsibilities.
In Europe, we need to generate jobs in the knowledge
economy sectors where we have a long-term comparative
advantage. At the same time, developing countries
should, through trade, realise the opportunities offered
by their own comparative advantages. That is the basis
of free, and fair, trade.
"Often, growing south-south trade will provide the chief
export outlets for developing country exports.
Otherwise, our markets will accommodate these new trade
flows, involving necessary adjustment.
"Agriculture is an inescapable part of this mix,
including the reduction in agricultural tariffs. In
Europe we cannot deny this reality. We made more than a
paper commitment to greater market access in the Geneva
Framework of July 2004. We signed up to a 'substantial
improvement' in market access. We have to make an offer
on this basis that can be both prudent and real.
"It is said by some that the poorest countries will not
be beneficiaries of European moves on agricultural
market access, that only the agri-businesses of the
United States, Australia, Brazil and other well
advantaged agricultural producers will gain. Indeed,
some further argue that reducing our tariffs is a bad
thing for development because it erodes the preferences
that the poorest presently receive. In other words our
defence of agricultural protectionism is for the sake of
the poorest in the world.
"I understand the point. We cannot make overnight
switches in policies. But let me explain why changes in
policy are, nonetheless, justified.
"First, if we want greater market access in advanced
developing countries for our top quality manufactures
and services, we have to give increased agricultural
market access in return. In effect, we are trading in
our presently agreed Common Agricultural Policy reforms
for access to others’ markets. Our dramatic reduction in
trade-distorting subsidies under the current CAP reform
will improve the competitiveness of developing
countries, as will our conditional pledge to phase out
export subsidies. But subsidies are one-half of the
issue. The other is the lowering of tariffs. If we want
the US to reform its own domestic subsidy regime – and
if we want the Brazilians to cut industrial tariffs and
open up on services – we have to move on agricultural
tariffs; there’s no other way.
"Of course, there are huge differences in competitive
advantage among developing countries. That is why we
should allow continued margins of preference for poor
country producers. It is also why developing countries,
especially the poorest ones, will not be required to
make the same tariff cuts in their own markets that the
rich countries will be expected to make. Finally, net
food importing and subsistence farming countries will
benefit from recourse to sensitive and special products.
"But Europe and other developed countries cannot hide
behind the concerns of those faced with preference
erosion in order to escape from the obligations
contained in last year’s Framework Agreement. The
world’s poor do not only live in the smaller and more
vulnerable countries that benefit from our preferences:
they also work the land in big agricultural exporting
countries such as Brazil or China.
"The Round must therefore provide for opportunities
across the developing world – and this world is a
diverse one. Moreover, by improving agricultural market
access, we can in turn get the bigger developing
countries to open their markets – in agriculture,
industrial goods and services – to other developing
countries who need access to these markets as they
become more efficient agricultural exporters and begin a
successful process of industrialisation, starting with
the most basic products and sectors.
"This is the unique value of a multi-lateral trade round:
it binds in balanced benefits for all, creating a
virtuous circle of market and trade openings.
"Outside agriculture, it is also in market access that
Doha can achieve the best pro-poor outcomes.
"Let me just highlight three key facts:
"In manufacturing tariffs, the potential is huge.
Eighty percent of
developing countries’ exports are accounted for by
manufactures, and south-south opening of markets can
unlock major gains. Today 70% of all tariffs are paid by
developing countries to other developing countries. This
is why non-agricultural market access (NAMA) is both an
EU offensive interest and a key development interest in
which the big developing countries can and must help the
small ones.
"Services liberalisation will strengthen infrastructure
in developing countries in key sectors such as
transport, telecoms, computer services or financial
services. And many of these same countries will benefit
from a strong comparative advantage in labour intensive
services.
"Finally, an ambitious new WTO agreement on trade
facilitation, covering the modernisation of customs
procedures, is inherently pro-development: independent
studies show that two-thirds of the economic gains of an
ambitious agreement will go to developing countries,
while they can double their customs revenue through
modern procedures.
"There is another, more specific development agenda that
the WTO membership should deliver to the poorer and more
vulnerable countries in the short-term.
"I have recently made proposals in these areas, arguing
for a Hong Kong 'down payment':
"By ensuring all developed countries – and perhaps all
countries in a position to do so, including some
advanced developing countries - follow the example of
the EU’s Everything But Arms proposals and by ensuring
that there is tariff and quota-free access to EU markets
for everything, including agricultural products for the
Least Developed Countries.
"By ensuring the right degree of differentiation between
developing countries in the implementation of trade
rules, or by enshrining in the WTO’s intellectual
property agreements the conditions for a better access
to cheap drugs against pandemics.
"And finally Doha must ensure that we create new
opportunities to trade by building up developing country
capacity to trade, through the development of
infrastructure. On this, we need further action; both at
the international and EU level and – critically at the
national level. I encourage you to dedicate more
resources to these areas within national development
programme envelopes, so that we can collectively up our
game, in line with President
Barroso’s
pledge at the
G8.
"Let me say, last of all, we are also putting trade at
the service of development in our relations with our
traditional partners of the ACP group of countries,
through the Economic Partnership Agreements.
"We are using these Agreements as sustainable development
vehicles, linking progressive liberalisation to the
capacity to trade. They can do this, first, by actively
promoting regional economic and market integration. A
single set of rules for trade in goods, services and
investment makes it easier to trade - regionally, then
more widely, as we have experienced in Europe. I believe
this European example can work in the developing world.
"EPAs are not about Europe trying to force open markets
for our benefit or impose an ultra-liberal free trade
ideology on poor countries. The EU is not seeking
concessions from the developing world, since these are
not major markets for us – nor is it sticking to a
strict programme of reciprocity.
"The progressive opening of ACP markets should not be
rushed; it should be phased in, over a decade or more
and at a pace defined by each individual region
according to their capacity to trade on world markets. I
agree that poor developing countries need 'policy space'
of their own. And that market opening should be properly
sequenced: first, build capacity and build regional
markets, underpinned by strong and transparent rules;
then, open them to the world.
"So, in conclusion, we face major challenges together.
But the biggest challenge of today is to make a success
of Doha. We cannot falter now. Europe owes it to the
developing world to ensure that we deliver on what we
promised and I count on your support in this."
For further information, please visit:
http://europa.eu.int/comm/trade/issues/sectoral/competitiveness/index_en.htm
Further Contact Information
Press and Media Relations
Delegation of the European Commission
2300 M Street, NW
Washington, DC 20037
http://www.eurunion.org/PressRoom
Tel: 202-862-9552
Fax: 202-429-1766
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