BACK TO MAIN  |  ONLINE BOOKSTORE  |  HOW TO ORDER

TWN Info Service on WTO and Trade Issues (Nov05/01)

2 Nov 2005
 

REACTIONS TO EU AGRICULTURE PROPOSAL RANGE FROM 'DISAPPOINTING' TO  'UNACCEPTABLE'


Reactions to the European Union's 28 October proposal on agriculture have been mainly unfavourable, with some countries calling it disappointing
and others finding it unacceptable.

Agricultural exporting countries such as the United States, Brazil and Australia expressed disappointment with the market access opportunities offered by the EU.

Many developing countries on the other hand found unacceptable the conditions laid by the EU that they have to make large  concessions in other areas, especially services and non-agricultural market access (NAMA), in order for the EU to maintain its agriculture offer.

The FIPS Trade Ministers discussed the proposal for two hours via video conference. A similar video conference is scheduled for 2 November. The FIPS Ministers will meet in London on 7 November and in Geneva on 8 November.

During the video conference, the other four countries criticized the EU proposal but did not reject it outright, according to the sources.

In Geneva, trade diplomats of several developing countries that are not part of the FIPS expressed frustration with the EU for attempting to shift the focus and burden of the negotiations  on to the developing countries which do not stand to gain from any market access openings in the developed countries.

"The EU should be told it is not doing enough in any case in agriculture, and they cannot push us with such extreme demands in NAMA and services," said an African diplomat.

Below is a report of the reactions to the EU proposal. 

With best wishes
Martin Khor
TWN

--------------------------------------------

Reactions to EU proposal range from 'disappointing' to 'unacceptable'

By Martin Khor (TWN), Geneva, 31 October 2005 

Initial reactions to the European Union's 28 October proposal on agriculture have been mainly unfavourable, with some countries calling it disappointing and others finding it unacceptable, for various reasons.

Agricultural exporting countries such as the United States, Brazil and Australia expressed disappointment with the market access opportunities offered by the EU.

Many developing countries on the other hand found unacceptable the conditions laid by the EU that they have to make large concessions in other areas, especially services and non-agricultural market access (NAMA), in order for the EU to maintain its agriculture offer.

At the WTO, an informal meeting on agriculture took place on Monday afternoon giving an opportunity to the EU to explain its proposal to the WTO members for the first time, and for them to give first responses. The proposal had only been provided last Friday to the FIPS (five interested parties) - the US, Brazil, India, Australia and the EU itself.

According to diplomatic sources, the FIPS Trade Ministers discussed the proposal for two hours via video conference. A similar video conference is scheduled for 2 November to discuss the EU proposal in more detail. The FIPS Ministers are then scheduled to meet in London on 7 November and in Geneva on 8 November (perhaps also with a larger group, dubbed FIPS-plus, in Geneva).

During the video conference, the other four countries criticized the EU proposal but did not reject it outright, according to the sources.

The US criticized the EU for proposing too many sensitive products, for insisting on flexibility in the lowest band of the tariff formula (i. e. that tariff cuts could range from 10 to 40 percent for tariff lines in the band 0-30 percent), and for its proposed treatment of tariff rate quotas, according to the sources.

Brazil also criticized the proposal along the same lines, while the Indian Minister was more critical of the attempt by the EU to link its agriculture offer to developing countries' commitments in NAMA and services, according to the sources.

India's Minister of Commerce and Industry, Kamal Nath, described the EU offer as a "mixed bag", according to a government press release issued in New Delhi.

Kamal Nath said that while the offer in respect of agricultural market access was constructive and demonstrated the will to take the talks forward, he "rejected outright" the elements in the offer which seek to link the agriculture negotiations with the NAMA and services negotiations.

He rejected the NAMA proposal as it seeks to introduce the concept of "advanced developing countries" and also advocates a single co-efficient for tariff reduction for both developed and developing countries. In services, Kamal Nath said the concept of quantitative benchmarks for opening up of services sector was unacceptable to India as it would not be possible for many developing countries to fulfill such obligations.

Brazil had described the EU offer as "not acceptable," according to a trade diplomat. Brazil did not agree with the EU's market access proposal to include both a large number of sensitive products (8% of the total products) as well as flexibility in the lowest tariff band.

The understanding was that there would be a trade-off, that if many sensitive products were to be allowed, the EU would give up flexibility to vary the rates of tariff cuts within the bands, and vice versa. However, the EU wanted to have both.

Further, Brazil views the EU linkage to such high demands of the developing countries in NAMA and services as unreasonable and will not be accepted by the developing countries. "The proposal seems to be designed in such a way that the talks can't move," said the official.

A spokesperson for the US Trade Representative, Christine Baker, said that the US is disappointed with the EU proposal. "While in some ways it is a step in the right direction and we acknowledge the EC's efforts, much more needs to be done," she said.

"First, the proposed tariff reductions are lower than proposals from the G-20 developing countries and far lower than the US proposal. The large number of exceptions for so-called sensitive products apparently has not changed from earlier EU proposals, and another element - the 'pivot' - actually walks back from their last proposal.

"Both of these elements would allow substantial loopholes to the relatively lower tariff cuts the EU has offered. If the final Doha agreement on agriculture were to go no further than this, other areas would also be weak and the Doha Round would not approach its potential for promoting development, opportunity and global economic growth."

US Trade Representative Robert Portman, after the FIPS video conference, reiterated the US's disappointment, that the EU plan had "too many loopholes." However, he also said the negotiations are ready to expand beyond agriculture, and the US is ready to start discussing services and other areas.

Australian Trade Minister Mark Vaile said the EU offer to cut its tariffs was "well below the demands" of the US, Brazil, Australia and food exporters. They want average cuts by the EU of at least 54%.

In Geneva, trade diplomats of several developing countries that are not part of the FIPS expressed frustration with the EU for attempting to shift the focus and burden of the negotiations on to the developing countries which do not stand to gain from any market access openings in the developed countries.

"The EU should be told it is not doing enough in any case in agriculture, and they cannot push us with such extreme demands in NAMA and services," said an African diplomat.

"Most developing countries are losing in this Round already, as we don't stand to benefit in any area, while we are already loaded with new obligations as well as loss of preference margins and of our markets.

"On top of this, the EU is now introducing and pushing new concepts and obligations on to us, such as benchmarking in services. It is unreasonable to do this, especially so late in the negotiations, just a few weeks before the Ministerial.

"We don't have enough capacity here or in the capital to analyse the meaning and implications of these new demands, let alone to respond to them. We are being pushed against the wall, we have no breathing space left."

 


BACK TO MAIN  |  ONLINE BOOKSTORE  |  HOW TO ORDER