Media releases
Wednesday, 18 December 2002 - MVT163/2002
EU Draft Ag Negotiating Proposal, Too Little, Too Late
The European Union's draft negotiating proposal for the World Trade
Organisation agriculture negotiations offers too little, too late,
Trade Minister Mark Vaile said today.
"We welcome the EU's submission for the WTO Agriculture Negotiations.
However, the EU proposal is of a very limited nature compared to
the Cairns Group's proposal," Mr Vaile said.
"The draft EU proposal fails to live up to the mandate agreed
to by all WTO members at Doha last year.
"It would repeat the failed Uruguay Round tariff-cutting formula
which would bring about very little improvement in market access;
do nothing to expand tariff quota volumes or cut trade-distorting
domestic support in a way that would require little movement by the
EU; and it ignores the Doha mandate for the phasing out of export
subsidies.
"Worryingly, it would legitimise and even increase agriculture
protectionism under the guise of 'non-trade concerns'.
"As well as failing to adhere to the Doha mandate in terms
of what should be included in the agriculture negotiations, the EU
is seeking to negotiate on issues which are not part of the mandate,
for example quarantine and labelling."
Mr Vaile said other Cairns Group members, 14 of which are developing
countries, had also expressed disappointment in the draft proposal.
"The proposal is an inadequate response to the call by developing
countries for agricultural trade reform. What developing countries
want is real improvements in access for their farm products. They
want to see real cuts to domestic support that depress their earnings
and push them out of markets," Mr Vaile said.
"The bottom line is there will be no outcome to the Doha Round
unless there is an acceptable outcome for agriculture."
Media Contact: Scott Mitchell +61 02 6277 7420
Attachment
The EC's Proposal: A Paltry Offer
The EC will need to show a considerable improvement in its draft
proposal if it wants to engage seriously in negotiations to meet
the Doha mandate. The draft proposal would bring only minimal improvements
in access to the EU or to other major world markets for agriculture. It
will do little to provide increased opportunity to the hundreds of
millions of the world's people who depend on agriculture for their
livelihoods. Increased access into markets as large as the EU is
critical for developing country producers, including for those types
of agricultural goods that compete with EU production. They need
access for the full range of agricultural products, not just for
tropical products, which the EU doesn't itself produce.
Negligible Improvements in Market Access
Trade Ministers at Doha committed to "substantial improvements" in
market access. Yet the EC's proposal is seriously deficient in this
area, offering very few improvements in market access.
The proposal calls for tariffs to be cut by an average 36
per cent, and a minimum cut per tariff line of 15 per cent. Tariffs
of several hundred per cent would be cut by so little that trade
would continue to be blocked in many cases. The graph below
compares this approach with the Cairns Group's tariff proposal for
developed countries, which would reduce all tariffs to 25 per cent
or less.
On tariff rate quotas (TRQs), the EC proposal is silent, suggesting
no expansion of trade in this area. Yet TRQs are among the
most restrictive of trade policy instruments, and were established
as a transitional measure. They are used heavily by the EU to
manage imports. In contrast, the Cairns Group has proposed increasing
all TRQ volumes in developed countries by 20 per cent of domestic
consumption in other words, by millions of tonnes in most cases.
Domestic Support: Business as Usual?
The EC's draft offer to cut domestic support by 55 per cent does
nothing to bring about meaningful change in the Common Agricultural
Policy. Indeed, the offer is far less generous than it appears,
as the EC has only been using 69 per cent of its entitlements of
approximately US$70 billion in trade distorting domestic support. The
long-term trend in CAP reform also suggests that the EU will seek
to transfer much of this support into exempt categories.
The EC's draft proposal will do little for farmers who continue
to see their prices depressed and markets closed to them because
of the high levels of European domestic support. It contrasts with
the Cairns Group's proposal for substantial reductions in trade-distorting
domestic support.
Export Subsidies: Backing Away from the Doha Commitment
In contrast to the commitment made by Ministers at Doha to "reductions,
with a view to phasing out, all forms of export subsidies", the EC
draft proposal calls for only limited cuts. Some export subsidies
would be phased out, but the overall reduction would only be by 45
per cent, which would allow many subsidy programs to continue unchanged. The
EC is backing away from the mandate it agreed at Doha.
Export subsidies are the most trade-distorting of policy instruments,
designed to hurt producers elsewhere. As the Cairns Group has argued,
they must be eliminated in line with the Doha mandate.
Local Date:
Friday, 05-Dec-2008 14:04:35 EST
