Brussels, 16/09/2008 (Agence Europe) - Addressing the European Parliament committee on international trade, which is chaired by German MEP Helmuth Markov (GUE/NGL), Trade Commissioner Peter Mandelson said that he hoped that there would be a further ministerial-level meeting at the WTO “this autumn” to tie up once and for all a modalities deal on trade in agricultural products and industrial goods (NAMA), on the basis on the compromise put on the table at the July meeting. Despite making a significant breakthrough in negotiations as a whole, the Geneva meeting stumbled on the special safeguard mechanism (SSM), which allows developing countries to increase their agricultural tariffs in the event of a sudden surge in imports or dramatic fall in prices on their markets (see EUROPE 9714).
Summarising the outcome of the July ministerial meeting, Mandelson acknowledged the “real political engagement from all players”. “After a full week, we actually had an outline agreement on the vast bulk of issues that needed sorting out to conclude full modalities. However, the talks broke down over a single issue: the special safeguard mechanism … where the US and India, principally, could in the end not agree on any compromise. There has been no measure of blame directed at the EU for the breakdown - this is probably a first in the history of GATT negotiations,” he went on. “No one is ready to throw in the towel,” he added, and he made reference to various political contacts at the highest level throughout the month of August to try to relaunch discussions. Senior officials had, he said, begun work again, in Geneva, and there were “encouraging signals of flexibility emerging” on the SSM last week. “We will need to see if senior officials are given the leeway they will certainly need to tease out a technical solution which satisfies all parties. This will also give us indications as to the political will to continue in the US and in India, amongst others,” the commissioner added, indicating that a solution to the SSM was “not sufficient”, since other difficult issues, like cotton, tariff simplification and the treatment of recently acceded members, were all still on the table. He also highlighted the importance of not unpicking the compromise on NAMA, which is based largely on sectoral agreements negotiated on a voluntary basis, and seeking to eliminate all tariffs in certain industrial sectors. “We have an interest in protecting the outline deal that emerged out of the July week,” he warned, placing great emphasis on gains in terms of market access in both developed and developing countries, and especially China. “We should also not forget that the package includes services. …the package respects all our red lines in agriculture,” he added. “There is no plan B,” the commissioner said. Firstly, because the July compromise was essential for the world economy which “is in an uncertain place”. “Every bit of additional certainty, every cut in tariff, … every strengthening of global trade rules is clearly in the world's long-term interests …especially at a time when governments and citizens are concerned by the fall in purchasing power and increased inflation,” he argued. Secondly, because two thirds of the gains of the Round would be to the benefit of developing countries which would only contribute one third of the savings. Finally, because a final agreement would lock the United States into farm reform, would provide permanent international legal protection to the reformed CAP and would anchor emerging countries into the multilateral trade system. “That is why the breakdown of the negotiations in Geneva is a real disappointment,” Mandelson said, warning of the effect it may have on the multilateral system and post-Kyoto climate change talks. Repeating his commitment to the negotiations, the commissioner, who is in regular contact with his counterparts in the G7 (Australia, Brazil, China, India, Japan, the United States and European Union) called for a further ministerial-level meeting to be held in the autumn. This meeting would “be desirable if we are going to succeed in pulling things around before domestic policies and elections in a number of countries take over completely,” he said. It would be easier to reach a successful conclusion in 2009 if it was possible to get beyond the crucial stage of an agreement on modalities in autumn 2009, he said in conclusion, noting the pitfalls of the US presidential election in November, legislative elections in India and the new Commission coming to office in autumn 2009.
Responding to the question from Erika Mann (PES, Germany) on the motor car industry's unhappiness over the “anti-merger” clause (which aims to prevent emerging countries from protecting whole swathes of their industry, such as the motor car sector, from tariff reductions), Mandelson called for the NAMA compromise not to be revisited. He was aware of the car industry reaction to the climate change package, and so felt doubly threatened. The EU, he said, had to pay attention to what the sector was saying. Responding to Caroline Lucas (Greens, UK), the commissioner pointed out that, in July, the EU had proposed opening quotas to Brazilian ethanol. In response to a question from Helmuth Markov on cotton, he said that the United States had not been able to put their offer on cotton on the table given the deadlock in discussions on the SSM. “Yet this is something that has to be negotiated rapidly,” he said, going on to say that the EU had a “defensive position” on this issue since it granted very low subsidies which it wants to continue to pay without damaging the world cotton trade. (E.H./transl.rt)