Difficult balancing act for Pascal Lamy: In light of the remarks formulated in this section on 30 June on EU/Mercosur negotiations and the "Doha round" of the WTO (of which we too often forget that the official name is "development round"), Pascal Lamy finds himself in a strange situation. He is strongly supporting multilateralism in the management of world affairs and believes that the EU has to set a good example, notably in rigorously respecting the rules of the WTO. He also considers that it is increasingly important for the multilateral system to be included in a kind of world governance setting out the rules and instruments for ensuring their application. The positions he's taken (in speeches, conferences, interviews, as well as in his last book) are clear: world governance is currently at the centre of his reflections. In particular, he clearly appears to be calling for a revision of the WTO by introducing more rules (environmental, health, social and others) into world trade (notably agriculture) and specific provisions supporting poor countries. But in the meantime, he is obliged to take into account WTO rules as they currently stand, which means that he has to perform a fine balancing act. He wants EU trade preferences supporting ACP and the poorest countries to be generally recognised and consolidated but he has to deal with the attacks against these preferences within the framework of WTO rules, which he wants to see respected. He would like to see negotiation of regional agreements with the ACP to essentially be based on co-operation and development but the WTO rules compel the EU to request these countries for trade reciprocity, something Lamy is probably unlikely to believe in and which has also raised a number of reservations and an element of mistrust in the ACP countries.
Poor countries' farming interests. The most sensitive dossier is agriculture. Pascal Lamy, as well as Franz Fischler, who is backing him up, know that millions of European agricultural businesses will disappear if rules applied to industry are applied to agriculture and that the first victims of total liberalisation of international agricultural trade will be African countries (except for cotton, which should definitely not be ignored) and other poor countries which can't compete with the export capacity of big counties from the "Group of 20". A broader opening up of the agricultural markets is not possible unless it is accompanied by firm environmental and health standards (in the interest of humanity and ecological balance), ""rules of the game" which are fair and even a certain monetary discipline, as well as allowing people the right of being self sufficient in food matters. But what do we see in practice? Some ACP countries have joined the "Group of 20" (which brings together the world's largest agricultural exporters) thus allying themselves with positions that will damage the interests of their ACP colleagues, and the orientation to better regulate world trade, by taking into account the non-trade aspects, it thrown out at Geneva. The European Commission is looking for alternatives, for example in the UNCED framework, in an effort to convince the ACP and other developing countries of the sense of its strategy by illustrating the recent studies carried out by UNCED itself (see below). In the EU's agricultural policy, what could be damaging to poor countries? Export subsidies. On behalf of the Union, Pascal Lamy is committed, by defying the European farming community and the government of his own country, to get rid of all these subsidies if other agricultural producing countries do likewise. But some of the later are barely moving at all, neither the USA (in difficulty over the cotton dossier) nor the G20 (Brazil, China, Argentina and India etc), which are fighting for a maximum opening up of the agricultural markets to the detriment of the poorest counties. It's not just the Commission that's disappointed, read our bulletin of 8 June p 12 on the reactions of Member States to the Geneva results.
Some understand nothing at all. If we lived in a sensible world, we'd admit that liberalising world agricultural trade was a dead end to solving the two scourges threatening the earth, that of nature's deterioration and the risk of malnutrition in large areas of the world. Proof is mounting, confirming that other alternatives would be better. But who's seriously taking any notice of the evidence? Demagogy continues to cause havoc even at the European Parliament or in the study offices of serious countries like Sweden. Here are two recent examples: a) yet another inflamed declaration by Benedetto Della Vedova MEP ("Non si vive di sussidi"), calling for the EU to end all subsidies for agriculture, the reduction of customs duties and an increase in import quotas. Bringing together the largest possible number of common and opposing aspects in EU agricultural policy is almost an exploit in this perspective! Mr Della Vedova is quite indifferent to the fact that the policy that he is outlining would not benefit the poorest countries at all and that it would mean the end of agriculture in Europe, the destruction of our traditions and our landscape, the desertification of rural zones and the monstrous swelling in the urban outskirts with the accompanying rise in social exclusion and crime; b) the "Timbro" think tank in Stockholm, which has analysed the votes of 384 MEPs on trade issues, observed that only twelve of them supported free trade, whereas as the others were "protectionists" (see our bulletin on 9 June p 15). This superb analysis is based on a single criterion: the direction that vote goes in every time a trade subject is discussed in Strasbourg. It is simply enough to say "no" any market opening project or to oppose the getting rid of farm subsidies to be seen as protectionist. Is acknowledged that Sweden's farming (and in other Scandinavian countries) only survives thanks to subsidies and that governments in these countries negotiated when they joined the EU that subsidies would continue in the same way as before. They obtained this and I hope that they will fight to keep to have it extended. The authors of the study, Fredrik Erixon and Kniklas Rossbach, in an effort to avoid the shame of being seen as "protectionists", are obviously in favour of getting rid of all unprofitable agricultural activities in their country and the disappearance of the Swedish farming way of life, the fruit of centuries of efforts and traditions, which Ingmar Bergman introduced to us with understanding and tenderness.
Some instructive texts. Faced with the two texts mentioned above, which do not in any way obtain my full admiration, I am able to refer to some that are, on the other hand, instructive:
1) the UNCED report proving that partial liberalisation (that has already occurred) of agricultural trade had benefited some rich countries and had helped, above all, multinationals to expand, which control most agricultural trade but also the poorest farmers;
2) the documents from the Agriculture Council summarising what really constitutes the CAP today, following all the successive reforms (which I referred to in this section on 19 May). As well as providing a lot of data and explanations, this document underlines the crucial need to "improve communications" on the situation affecting European agriculture, without which European farming was at risk of "being determined not by the Council by external forces" (namely the large agricultural exporting counties, the agri-food multinationals and the big trades, supported by the Union via the wild imaginings of those conjured up by Della Vedova, Erixon and Rossbach. EU subsidies for exports have declined from 25% of their export value in 1992 to 5.2% in 2001 and in absolute figures from EUR 10 bn to 2.8 bn; the reduction continues and will be followed by new CAP reform, while waiting for the debate on getting rid of them totally. Despite its claimed "protectionism", the EU is the largest importer in the world of agricultural products (it imports more than it exports) and it buys from the USA, Japan, Canada, Australia and New Zealand together (85% of agricultural exports from Africa go to Europe and 45% from Latin America). Is there any need to say that imports from Africa benefit almost all with preferences or price support mechanisms (sugar, bananas), financed by the Union? As a result, the real enemies of African exports are those who call for an end to "preferences" agreed to by Europe. The Irish document was summaries in our bulletin on 8 May pp 9 & 10; I mention this because I don't get the impression that there has been any other references to it in the press, neither on the fact that those giving the lessons had ever taken them into consideration.
3) the sharp riposte last spring of Pascal Lamy to the affirmations from the WTO director General on European farming subsidies. Lamy personally wrote to Mr Supachai Panitchpakdi, accusing him of having diffused (in an interview) erroneous and debatable figures for backing up his "ideological arguments" opposing the right of the EU to subsidise its agricultural production (which means Europe being refused legitimate political choices"). The European Commissioner demanded that the" EU had the right to subsidise its farming in order to ensure the security and quality of its food, protect its environment and maintain its rural way of life". Other than EUROPE, what other media reported these assertions?
4) the demands of ACP states on WTO negotiations and "partnership agreements" with the EU to not be trade arrangement but to be genuine "development instruments" (see our bulletin of 25 June), as well as their plea for maintaining guaranteed prices for ACP sugar and subsidies for their production if prices go down (see our bulletin 29 June p 13).
I will come back to this last document, which takes up the European idea of farming, as well as the crying need for the successors of Lamy and Fischler, as Union negotiations with third countries to maintain their fundamental orientations. (F.R.)