Brussels, 04/09/2003 (Agence Europe) - As three to four thousand people prepare to converge on Cancun, where the fifth ministerial conference of the World Trade Organisation (WTO) is to open next Wednesday, the chief negotiators of the European Union, Commissioners Pascal Lamy and Franz Fischler, who are on the starting line with minds as "open" as before Seattle then Doha, clarified the situation on Thursday in Brussels with a warning to other participants. They told them not to go the summit with "extreme" demands, like the objectives of developing countries such as Brazil and India on agriculture, as one thing is certain: "a bad result in Cancun would be bad news for the world economy and that is not what the world economy needs right now".
The event, which was initially presented as a "key test" and more and more as a "major intermediary step" toward success of the round of talks launched in Doha in November 2001, will in some ways mark the return of the "145 head cooks" to the kitchen to look at each dish in turn to see how things are coming along, and speed up the preparation of a "twenty-course meal to be served bang on time to a huge number of guests", the Trade Commissioner explained. He went on to say it is important to know whether the order will be ready in time and to see that the European Union is keen for the commitment taken to serve up the meal to the world economy by end 2004 to be kept. This stubbornness -which nothing seems to shake, not even the series of accumulated timetable alterations made in Geneva over the past year and a half- is motivated, he said, by two facts: (1) good news is rare in the corridors of the world economy, including for development countries, and, if it comes within the time set, the conclusion of the round of talks would be good news for a world economy searching for a new lease of life; (2) the method for opening international trade, practised at the WTO, namely access and a statutory framework to this access, this kind of UN without a Security Council (as decisions are taken by all its members unanimously) is the right place on the international scene for this to be done as this is where there is the best balance of power between the large and the weak, and the rich and the poor within institutions of international governance. He went on to insist that things are now becoming really urgent and that Europe plans to take its responsibilities. The final result, however, does not depend on resolve alone. If we want to make this round of talks a success, then we should all bear the cost, be ready to make concessions and show proof of the will to succeed. According to Mr Lamy, this will have worked if we leave Cancun with the shared feeling that we are already half way there and that we shall be able to go the rest of the way by the end of next year. The task set before the 146 is, in his view, to now make an additional step forward along the lines of what has been done over the past fifty years in GATT then at the WTO given that they are not negotiating one dish at a time and that nothing will be concluded until everything has been concluded.
Commissioner Lamy also recalled, as he had done the day before at the European Parliament, that the difficulties and priorities are not only to be found in the agricultural sphere but also in many others. He returned to the other chapters that are "less visible but just as important" for Europeans in these negotiations, namely:
1. Access to the market of industrial (non agricultural) goods, which make up 90% of world trade, "not only North/South or South/North but also South/South", the programmed tariff reduction being "absolutely essential" as, although average tariffs in Europe are 4-5%, they are very high in other parts of the world. We recall that, in this sector, the ministerial meeting is supposed to decide upon the framework for cuts to be made in tariff and non-tariff barriers, as well as on the timetable for continuing talks.
2. Liberalisation of the trade in services (negotiations more laborious than for agriculture and manufactured goods), where ministers will invite those arriving late to present their initial offers, improve the existing ones and agree on a roadmap for the rest.
3. Strengthening of protection of geographic indications, "the products that bear our names", for which the Europeans hope to obtain legally binding value at the WTO for the register on wines and spirits, extension of the principles applied to them and to other products, and also recover the use of a list of geographic indications (41 in total) on which the Fifteen have just agreed.
4. The environment, which is part of the Doha Development Agenda. "The Union line is the same: we must aim to better integrate environmental concerns at the WTO, mainly concerning subsidies to the fisheries sector (with emphasis on the limits linked to conservation of the species).
5. The Singapore subjects, namely investment, competition, public procurement and trade facilitation, for which it is "fundamental" to establish a "minimum" number of rules of the game at multilateral level in order to "produce the positive effect of trade liberalisation". As far as investment is concerned, on which opposition seems to be growing stronger and larger as the ministerial draws near, what Europeans are putting on the table has no resemblance to the MAI that was such a failure at the OECD seven years ago, the difference between the two being as big as that between "a bathtub and a gasworks".
He confirmed that they hoped negotiation on such subjects would be launched in Cancun.
Mr Lamy said one word more on special and differentiated treatment promised to the developing countries and the difficulties that they meet in implementing commitments contracted after the previous round, recalling the moves forward recorded in the preparatory work and pointing out that they will continue to work to persuade their Japanese, American and Canadian friends that they must go towards a certain number of requests from developing countries.
On the subject of agriculture, which remains the minefield in a passionate and generalised battle, including between farm superpowers and North against South, Franz Fischler assured that Europe has already proven that it will play the game and will not be the party that spoils things. Unfortunately, he said, he has not seen the same flexibility in other camps so far and no flexibility whatever from those who shout the loudest. He then went on to make a virulent attack on the extreme ideas defended by the developing countries like India, Brazil and China, namely the abolition of farm subsidies. Not all are bad, Mr Fischler stressed, expressing the hope that attention would be focused on national aid that distorts trade. "If they choose to continue their space odyssey, they will not get the stars, they will not get the moon, they will simply end up with empty hands", he said.
Mr Fischler, on the other hand, said that if they wish to prepare a sufficiently tasty and healthy dish in Cancun for the 146 members of the WTO, then they need ten basic ingredients, namely:
1. Slash trade distorting domestic farm subsidies which generate competition distortion. With its decisions taken in June on CAP reform, the Union "goes far beyond the ambitions of the Uruguay Round".
2. Cut export subsidisation substantially, a point on which the Union has already shown flexibility by proposing to do away with export subsidies for certain products of interest to developing countries and substantially reduce the rest. The only condition is that export credits, abuse of food aid or State Trading enterprises used by partners must be equally disciplined. "Europe has already come a long way" with three domestic reforms in ten years and with the package decided this summer.
and the future reforms in the sugar sector, it will be able to go further, he said.
3. Improve the lot of developing countries. They are also seeking to go further than Europe has done so far, namely "to import more from economically developing countries than the USA, Australia, Japan and Canada, markets which are relatively open compared to those of other developing countries and other numerous initiatives (Everything but Arms, Lomé, the system of generalised preferences and some free trade agreements).
4. Don't ask for too much. Mr Fischler said that he knew that trade discussion are sometimes posturing and rhetoric but let's not overdo it, he said, as the risk would be to develop into another orbit as Brazil, China and India and others recently did in opting for an "extremist approach" by putting a "radical proposal" on the table to the point where convergence appeared to it to limiting itself to the status of developing countries and calling for an end to all agriculture subsidies. Getting cross with "their proposal beats all the records: all the reforms and all efforts must be made by developed countries and practically nothing by developing countries, which is even less understandable if we consider that average agricultural duty is less than 10% in the EU whereas it stands at 30% in Brazil and 60% on average in developing countries and that the income per inhabitant in several EU Member States in the enlarged EU will be considerable superseded by a number of developing countries".
5. Open up markets to agricultural imports according to a formula that shares equal responsibility between WTO members with the exception of the less advanced.
6. Reform agricultural policy in a single direction: reduce unfair trade. He confirmed that the reform proposals for sugar, olive oil, cotton and tobacco would be presented on 23 September.
7. Not to succumb to facile propaganda. If the Europeans pay USD 2 for a cow "it's not because we're stupid but because we have a high level" and "we defend vigorously our right to help our farmers".
8. Don't be stuck on entrenched positions (see above).
9. No over the top expectation from Cancun, this will not be the final say in trade discussion but the medium term, the objective being to reach an agreement on the framework for reductions that figure in the Doha agreement.
10. Not to pirate trade marks from partners (see IGP).
Mr Fischler outlined that the Cancun Ministerial would discuss the date to provide the different reactions. He considers that in March they would be able to finish the trade round in time and it is preferable to stopping "mid course" in the contents of the list of important products for the trade of developing countries.