A qualified 'yes' to reform
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CTA. 2002. A qualified 'yes' to reform. Agritrade, June 2002. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52737
Commissioner Fischler reiterated the EU's...
Commissioner Fischler reiterated the EU's approach to reform at a meeting on March 11th 2002 with Stuart Harbinson, the new Chair of the agricultural negotiations in the WTO. He pointed out that the EU would say 'yes' to more market opening, provided it is done in a way which enables everyone to benefit from new market opportunities and protects geographical indications such as 'Roquefort' cheese or 'Parma' ham against usurpation of names; 'yes' to reductions in forms of export assistance, which is already subject to WTO disciplines, provided other forms of export subsidies are similarly disciplined and reduced; and 'yes' to reductions in trade distorting support, provided that WTO members remain free to ensure that their farmers can continue to meet the wider goals and expectations of society, such as environment or food safety. Comment: The EU's approach to WTO negotiations is conditional upon progress in related areas and an acceptance of new ways of promoting wider agricultural and rural development objectives. The EU rightly points out how, prior to the initiation of CAP reform (in the 1989-91 period), EU farm expenditure for price support and export refunds accounted for 90.7% of the farm budget, and how, as a consequence of the process of CAP reform, these trade distorting forms of assistance will have fallen to only 21.3% of the CAP budget by 2006, with 78.7% of the budget going to less trade distorting or non-trade distorting forms of assistance. However it needs to be borne in mind that the notion of less trade distorting is a relative concept. In the cereals sector these less trade distorting forms of aid have nevertheless allowed EU production to increase 26% in response to a 50% decline in average cereal prices. This is not a normal supply side response to price declines. Thus it can be seen that even less trade distorting forms of aid have profound effects on production decisions in the EU.