Friday, 27 June 2003 - MVT46/2003

The EU Must Now Re-Engage in WTO Farm Talks

Reforms to the European Union’s Common Agricultural Policy (CAP) were a step forward for farmers worldwide, but it was regrettable that the Commission's original proposals had been so eroded by compromises demanded by some Member States, Trade Minister Mark Vaile said today.

“Any reform is positive,” Mr Vaile said. “But this is not the more ambitious reform proposed by EU agriculture commissioner Franz Fischler and trade commissioner Pascal Lamy – and that is disappointing.

"The EU must now turn its attention to re-engagement in the current round of world farm trade talks," Mr Vaile said.

As part of its final CAP reform package, released last night, the EU agreed to introduce a degree of market orientation into the CAP payments, and endorsed the concept of decoupling subsidies from production.  The package follows a year of negotiations among the Member States, but the last three weeks of intense debate on the Commission's proposals have weakened their reform impact.

“The decision by the EU to reduce the incentives to overproduction marks an important new direction for EU agricultural policy," Mr Vaile said.

“It is unfortunate, however, that the more reform-oriented proposal put forward by Commissioner Fischler was seriously eroded. While we have not seen the detail of the final decision, it appears that most of the proposed price cuts have been withdrawn, and decoupling in the livestock sector is seriously compromised."

Now that the package is settled, the EU is going to have to move forward with a substantially improved offer in the WTO negotiations before the Ministerial Conference at Cancun.  This must include substantial improvements in market access and phasing out of export subsidies, as well as reductions in domestic support.

"Only then will we know whether the EU is prepared, either as a result of its internal reform or the WTO Round, to live up to the explicit undertaking made by all WTO Members at Doha.  Only this will deliver real benefits to farmers in Australia and around the world.”