EU in the Media

"Trading Favors"

By Peter Mandelson

Op-Ed Contributor

New York Times, December 13, 2005, p. A33


Hong Kong

IT suits some members of the World Trade Organization to pretend that all that is needed to unblock the current round of trade talks (which began in Doha, Qatar, in 2001 and continue here today) is for the European Union to make meaningful concessions on agriculture.

The best that can be said about this self-serving argument is that it reflects well-intentioned but oversimplified views on the relationships among agriculture, trade and development. In reality, it is wrong on several counts.

First, the European Union has made significant concessions on agriculture on several occasions. We are reducing support to European farmers, a major reform begun after the Doha meeting that others conveniently overlook. While the United States was busy increasing its farm subsidies last year, we broke a taboo by offering to end all our agricultural export subsidies if others would match us in their comparable programs. Barely a month has passed since we put forward new proposals to lower our average agricultural tariff by almost 50 percent; only two weeks ago we also radically reformed the European sugar market, lowering prices by more than a third.

It's true that the European Union needed to reform its agriculture policies. But any farm sector can absorb only so much reform at once. Unlike the nongovernmental organizations calling so vociferously for cuts in subsidies, governments have responsibilities to the citizens who elect them. The changes we have already begun are having an extensive impact on Europe's farm regions. As a result of the sugar reforms, producers in Ireland and Finland may well go out of business. We have seen no comparably bold action by any other major W.T.O. member, the United States included.

As the talks begin today, our fellow negotiators should be in no doubt that all the European Union's governments agree that there is no reason to move further on agricultural tariffs. They all agree that the time has come for others to respond in other areas of the Doha agenda, like lowering industrial tariffs and liberalizing service industries, to the moves we have already made.

And they are right. The actions we are taking and the proposals we are making in agriculture will cost a lot of jobs. Our governments need to be able to show that a global trade deal will create other, better and more jobs in Europe too.

A Doha deal will work only if everyone benefits. If we are to open our agricultural markets further, our companies need to find new opportunities to invest and trade in other markets and in other economic areas - including real market opening in industrial goods and services in rapidly growing countries. Those countries need cheaper, more competitive goods and services, too, for their own development.

Brazil, for example, should offer to reduce import tariffs on industrial goods. Brazil should also offer greater access to foreign providers of services and help establish a more fruitful process for international negotiations on services in the future.

India should improve the tariff reductions it is offering on industrial goods. Both Brazil and India should recognize that there are differences between the needs of developing countries: they should consider what they can do to improve trading conditions for the poorest, for example, by themselves moving toward duty- and quota-free access.

The United States also needs to improve its agricultural proposal by reducing domestic subsidies and food aid programs that distort trade. It needs to improve its offer of market access for providers of services. We would be delighted if Rob Portman, the United States trade representative, followed Europe's example by granting duty- and quota-free access for imports from least developed countries, and lowering America's cotton subsidies. Europe could also use American support as we seek to stem the progressive abuse of anti-dumping suits by tightening W.T.O. rules.

If our W.T.O. partners take serious steps in these areas, they might have the credibility to ask Europe to revisit its agricultural policies. Until then, Europe will stand fast in the belief that at this moment it is not another move by the European Union that is needed to ensure the success of the Doha Round.

Peter Mandelson is the European Union's Trade Commissioner.