Brussels, 19/07/2004 (Agence Europe) - On Monday the European Commission described the World Trade Organisation's draft, presented on Friday to 147 countries, in an effort to finish the framework agreement on the finalisation of Doha development negotiations, as a "good basis". The Commission affirmed, however, that there was a need for "clarity and precision". Pascal Lamy, the Commission for trade said that the document published by the WTO was a basis on which they could continue their work but that it was necessary to add some further clarifications and precision, notably on negotiations on services. The Commission hopes to obtain these clarifications in the next few days when a whole series of technical discussions is held in Geneva, which will aim at producing a new draft that could be submitted for adoption on 27 July at the General Council of the WTO.
The Commission believes that on Customs duty reductions for industrial products (which represent 90% of world trade), the draft text constitutes a "minimum balance" between the "ambitious" EU position and the less ambitious position of several other countries. In the context of services, the Commission wants the framework agreement to contain a date so that EU partners will have to put improved offers on the table. In relation to development questions, the Commission welcomes the fact that the draft mentions the need to take into account the interests of developing countries. The Commission is also satisfied with the fact that according to the draft text, less developed countries will only have to freeze their customs duties without having to reduce tariffs (the same goes for both agricultural and industrial products), which will be included in the agreement.
Commissioner Franz Fischler (agriculture) shared the cautiously positive attitude of Mr Lamy on the section on agriculture in the draft. On Monday Fischler's spokesperson descried it as a clear step forward but that the draft still needed some precision notably on the issue of export aid granted to the USA. He also said they wanted to see the end to subsidies for exports and the elimination of other export competition tools. In this connection the text should be clarified, he said. The Commission is also asking for more precision on internal aid to farmers., explaining that the Union was prepared to substantially reduce agricultural subsidies but that they needed, "more precision to see how we could lock a reform of the US Farm Bill which has not happened yet". Finally, the Commission also wants more clarification on the issue of how "sensitive" EU agricultural products will be treated in the context of opening up of the markets and general import duty reduction. On the other hand, the Commission is generally satisfied that the protection of geographical indications for European agricultural products is dealt with in the draft text published Friday, said Fischler's spokesperson.
The draft submitted on Friday to 147 countries of the WTO by its Director General Supachai Panitchpakdi and the president of negotiations, Shotaro Oshima is proposing:
An end to agricultural export subsidies (as offered by the EU) but also in parallel, to "trade distortion" provoked by export credits. In respect of export credits, the draft proposes a reduction to six months for the reimbursement deadline, which would get rid of the vast majority of US credits, deadlines for which can be as long as three years;
To open up the markets more to agricultural products via a formula that gradually reduces customs duties and which hits higher customs tariffs harder. Nevertheless, the text calls for "flexibility on sensitive products". Least Advanced Countries (LAC) will be able to exempt from taking part in reducing custom duties. Cotton: the WTO suggest negotiations for a "consequent and effective reduction" of support that should also have ceilings put on them. Cotton will be dealt with in the agriculture section and not, as requested by ACP countries, in specific negotiations that are separate;
Facilitated trade access for non agricultural products through reduction or elimination of the highest tariffs via the application of the "non linear formula" which should take into account of the special needs and interests of developing countries (not full reciprocity on tariff reduction commitments).
Commitment to holding discussions on simplification of customs formalities ("trade facilitation"), while excluding from the Doha Cycle the three other "Singapore subjects" (investment, public procurement and competition), which will remain, however, on the WTO agenda.