Reflections on the agreement on CAP reform
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CTA. 2003. Reflections on the agreement on CAP reform. Agritrade, August 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52487
The USDA GAINS briefing of 26th June 2003 provides a simplified analysis of the...
The USDA GAINS briefing of 26th June 2003 provides a simplified analysis of the final CAP reform agreement. It describes the final agreement as 'highly complex' and maintains that it 'represents a significant watering down of the original Commission proposals, with: the possibility of delaying decoupling until 2007; the scrapping of price cuts in the cereals sector; the maintenance of coupled payments in some sectors; limited cuts in the dairy sector compared to the Commission's initial proposals. The briefing points out that the compromise text states that the EU 'will not pay twice in order to conclude the round', implying that the EU does not intend to make any further concession beyond those already agreed as part of the reform of the CAP, in the context of the Doha Development Round. In its analysis of the reforms agreed the USDA sees decoupling taking place at three levels: payments that will not be decoupled at all; payments that will be partially decoupled and payments that will be decoupled later, with member states being left to choose whether or not to fully decouple. The USA has called on the EU to translate the reform package into new and ambitious negotiating proposals at the WTO. The Chair of the WTO General Council, Carlos Perez del Castillo, described the reforms as 'a step in the right direction', while Australian Agriculture Minister, Mark Vaile, welcomed the move as a positive step. Development NGOs, however, criticised the final CAP-reform agreement as 'half-hearted and not going far enough to curb overproduction in Europe or to halt dumping of agricultural products on developing countries'. This is based on the fact that the final agreement still maintains 'a limited link between subsidy and production under defined conditions so as to avoid the abandonment of production' and the fact that EU agricultural support will not decrease significantly. Rather the reforms will allow the subsidies to be shifted into the 'green box', thereby making them exempt from WTO disciplines. The President of CIAA, the organisation of the European food and drink industry, described the CAP agreement as being in line with the long-term goals of the food-and-drink sector. Comment: The actual negotiating capital which the EU earns in the WTO from the compromise agreement will be determined by the perceptions of the EU's trading partners as to the impact of the reform measures in specific sectors of concern to them. Given the complexity of the final reform package many of the EU's negotiating partners are reserving judgement until they have had time to work out the likely external market impact of the proposed reform measures.