Brussels, 28/10/2005 (Agence Europe) - On Friday, Trade Commissioner Peter Mandelson and Agriculture Commissioner Mariana Fischer Boel, unveiled the EU's most recent offer for the Doha World Trade talks ahead of the December WTO Summit in Hong Kong. To get the multilateral trade negotiations moving again following the deadlock in the WTO Doha Round for the past few weeks, the EU's two WTO negotiators mandated by the Council have come up with a 'comprehensive, substantive and credible contribution' particularly with regard to access to the EU's farm market, but also in all other areas of the talks (manufacturing and services). The new proposals will be gone over with a fine tooth comb next week by the 'Five Interested Parties' (FIPs), the European Union, the United States, Australia for the Cairns Group, and Brazil and India for the G20, the emerging economies group. At a press conference Fischer Boel said the EU's offer was responsible and daring and it was the final offer. She said the two Commissioners had struck a clever balance with regard to their mandate - the offer does not imply a new reform of the CAP and was close to the agreement signed in Geneva in August 2004 that called for substantial improvements on access to market for farm products. Mandelson said: 'The proposal is fully within the current negotiating mandate given to the Commission. However, it is at the outer limit of that mandate'. He stressed the importance of getting the negotiations moving again on non-farm and industrial products, NAMAs, and on services. The outcome of the Doha Round had to be balanced because it was not just a farm round, he explained. The Trade Commissioner said the EU's offer on market access was conditional on substantial efforts from the other FIPs.
In its latest farm offer, the EU is proposing Conditional on satisfactory movement in other areas, the EU offer proposes: 'a 60% reduction in the EU's highest tariffs. A range of tariff cuts between 35% and 60% for lower tariffs. A cut in our average agriculture tariff of 46% - from 22.8% to 12.2%.
A maximum agricultural tariff of 100% - as demanded by developing countries' (a 50% cut for tariffs of between 60% and 90%, a 45% cut for tariffs between 30% and 60% and a 35% cut for tariffs between 0% and 30%, with flexibility for the lowest tariff to allow greater cuts for various products to solve the problem of 'sensitive products': 'reductions in tariffs even for sensitive products - and wider Tariff Rate Quotas (TRQs) for all sensitive products - meaning more market access'); a 46% tariff cut on average (with average tariffs being cut from 22.8% at present to 12.2%); 'Differential treatment for developing countries: higher tariff bands, lower tariff cuts and a maximum tariff of 150%; No tariff cuts for the 50 Least Developed Countries (LDCs)'; a reduction in the number of sensitive products designated by the EU (in Zurich the EU suggested that 8% of all farm products should be labelled sensitive products, but this will now be reduced); a 70% reduction in Orange Box trade distorting agricultural subsidies - as agreed in the EU's 2003 CAP reform, and tighter disciplines on Blue Box spending; and the total elimination of all agricultural export support by an agreed date (Commissioners Lamy and Fischler suggested this in May 2004), if others discipline their export support.
The EU's 'proposals in (farm, Ed.) market access are strictly conditional on further clarification from other developed countries on the elimination of their forms of export support. US commitments on Food Aid and Export Credits are not yet sufficient. Australia, Canada and New Zealand (the Cairns Group, Ed) need to provide further commitment on the reform of their State Trading enterprises (on 'disguised' subsidies for wheat and dairy exports, Ed.). The EU also seeks real discipline on the most trade-distorting US farm payments (Counter Cyclical Payments).' The EU is also after more clarification from developed countries on domestic support that also distorts trade but to a lesser extent (the Blue Box).
The EU proposals are also strictly conditional on the acceptance by our negotiating partners of a number of proposals in the negotiating areas of the DDA outside of agriculture. In trade in industrial goods, the EU wants agreement before Hong Kong on a progressive formula that cuts into applied tariffs (the EU backs the 'Swiss' formula). In its Zurich offer, the EU suggested a minimum 10% tariff for developed countries and did not consider cuts for less developed countries. On services, the EU wants to see negotiations complemented by ambitious mandatory country targets for the services sectors to be liberalised (as agreed in Hong Kong), namely: banking, transport and communications sectors; - the Union wants an international list of geographic indications (GI) to protect them in all WTO Member States. Ms Fischer Boel said the geographic indications were of vital importance for the Union as, once markets become more open, the Union will be able to take advantage of the fact that consumers at world level will wish to buy products specifically associated with production and a quality label; - on measures to combat anti-dumping, the Union wants the WTO to negotiate a series of points by the date of the Hong Kong conference to include all major barriers to international trade created by abusive anti-dumping practice; - on the development aspect, the Union wants to be reassured that a package of proposals will be ready for Hong Kong, including a package on the trade-related technical assistance package (TRA package) as well as an agreement whereby all developed countries should extend their preferential treatment without quotas or rights to all developing countries, at the latest by the time the final agreement of the Doha Development Round is concluded.
Answering journalists about the equivalence of the European offer to those of the United States and the G20, Mr Mandelson explained that the American proposal to reduce the highest tariffs up to 90% (the Union suggests 60%) was “not credible” as such a cut in duties in what are currently the most protected sectors would have a devastating impact on many key sectors of the Union and would cause considerable job and income losses as well as a fall in living standards for European farmers, as well as for ACPs. The Trade Commissioner recalled that such a reduction would reduce de facto the impact of the special and differentiated treatment offered to ACPs. This proposal would have eliminated preferential access to the ACPs, not giving these economies, which are among the most fragile, time to adjust to a liberalised market situation, Mr Mandelson explained, putting forward the following argument: - the projections made by the Commission show that the tariff reductions suggested by Washington would result in eliminating the preferential treatment for these counties for farm trade worth up to EUR 6.4 billion, compared to the 9 billion flow currently prevailing. “Even the 75% cut proposed by the G20 would have a hugely damaging effect on preferential access and farm livelihoods in Europe and elsewhere”, he added.
Finally, in answer to questions on the threat of a French veto (on Thursday at Hampton Court, the French president, Jacques Chirac, warned Commission President José Manuel Barroso that France would block negotiations if the Commission's offer were not to his liking). Mr Mandelson answered by saying that, on Friday morning, France said during the meeting of permanent representatives (Coreper) that the proposals being made “do not come under our mandate. What we are proposing is in the limits of our mandate and CAP reform which gives a sufficient margin of manoeuvre”. He went on to say that the recent technical meetings between Commission and Member State experts have proven that transparency guarantees given at the General Affairs Council of 18 October this year have been reached (see EUROPE 9051). Commissioner Mandelson added that France has always been a leader in the Union's commitment to development. In all the WTO negotiation rounds, it has always shown its sensitivity when it comes to agricultural matters. However, he went on, he is sure that he can convince France “we are on the right road and that our offer is manageable for the European farming communities”. “Now”, he concluded, “we are limited by the timetable. We no longer have time or the leisure to play at ping-pong. WTO Director General Pascal Lamy called for the parties at the WTO to make a move before the end of the month and we have done so”.