Commission proposals for reviving the DDA negotiations
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CTA. 2004. Commission proposals for reviving the DDA negotiations. Agritrade, January 2004. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52868
On November 26 th 2003 the European Commission adopted a strategy paper on the...
On November 26 th 2003 the European Commission adopted a strategy paper on the re-launching of the WTO negotiations The aim of this communication is to update and ‘refresh' the EU approach following the Cancun WTO Ministerial; it highlights a willingness: to explore alternative approaches to the ‘ Singapore issues'; to adjust (slightly) positions on trade and environment, and geographical indications; to maintain a high level of ambition on services, non-agricultural market access, anti-dumping, subsidies, and regional trade agreements. The EC maintains that the EU has shown willingness to be flexible and that it is now up to others to respond. It also recognises the concerns of developing countries over preference erosion, particularly in the agricultural sector. Overall, however, it maintains that ‘the WTO is not a structurally unfair system … previous rounds have not worked against the interests of developing countries' and future negotiations should not be about ‘absolving developing countries from new WTO rules'. Indeed, the Commission maintains that stronger rules will bring the biggest development gains by prompting ‘an ambitious trade opening'. Specifically on agricultural issues the EC reiterated its commitment to ‘substantial reductions in trade-distorting support and export subsidies' However, conversely, it maintains that ‘support with no or little trade effects that address key policy goals … cannot be subject to any capping or reductions' For the Commission ‘the notion that we or others should reduce green-box support is unacceptable', since, it is maintained, this would amount to ‘putting external constraints on internal policies having no trade-distorting impact'. It maintains that negotiations should focus on ‘what distorts trade', notably amber-box support and export subsidies, and that the ‘de minimus threshold should also be reduced'. It is, however, willing to support ‘ a cap on blue-box support', but insists that it is now up to others to move by recognising ‘the distinction between the different trade-distorting impact of different policies'. However it argues forcefully in favour of maintaining special safeguard provisions. While the Commission favours more flexibility for developing countries on domestic support, it maintains that this should be restricted to the poorest. It supports greater market opening between developing countries, and advocates that not only OECD countries but also the G21 countries should move ahead with EBA-type initiatives. The Commission will push for stronger rules on geographical indications in the DDA round. Following the FAO meeting of agricultural ministers in Rome , Commissioner Fischler in summarising the EU's approach post-Cancun set out five tests for re-starting WTO agricultural talks: developing countries should get a better deal, particularly on market access for the poorest to the markets of richer developing countries; there has to be a process of give-and-take from all parties; existing agricultural reforms have to be recognised, appreciated and rewarded not penalised; negotiations need to be based on substantive discussions not on propaganda slogans; the rich countries cannot deliver an agreement unilaterally: developing countries will also have to make concessions. Comment: The key to the EU's position on the WTO rules on domestic agricultural support is the definition of what constitutes non-trade-distorting forms of support. Even though a growing proportion of EU agricultural aids are nominally decoupled from production, it is apparent in a significant number of sectors that the level of decoupled payments made influences farmers' production decisions. Put simply, in the absence of these payments (whether coupled or not) EU farmers would produce less at prevailing price levels than is the case when these payments are made. While the Commission is willing to support a cap on blue-box support the question is: will this actually lead to a reduction in EU agricultural support, which affects farmers' production decisions, and trade outcomes? At the informal EU Agricultural Council meeting in Taormina , Sicily from September 20 th -23 rd 2003 , Commissioner Fischler pointed out that with each step of enlargement the green box will expand. This is something which the G20 and the Cairns Group would like to prevent through the introduction of a cap on green-box payments to be introduced, but the EU remains firmly opposed to this. In this context great care is needed in considering what is actually meant by EU offers to reduce domestic agricultural support and what the impact of such measures would be on overall EU production and the price competitiveness and volume of EU exports of both agricultural and value-added food products. The September 2003 FAPRI analysis of the 2003 CAP-reform agreement found significant limitations in the value of existing WTO disciplines: for example that EU amber-box expenditures could be raised to almost double those that are expected to prevail under the EU CAP-reform scenario and yet remain within WTO disciplines.