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EU members want concessions from others as condition for improved agriculture offer

(Wednesday, July 23, 2003 -- CropChoice news) -- International Trade Daily, 07/22/03: BRUSSELS--If the European Union is to improve its agriculture offer in the World Trade Organization Doha Round, other countries, including the United States, must first come forward with concessions, EU member states agreed July 21.

In addition, EU member states demanded that modalities for agriculture, industrial goods, and access to medicines, as well as the so-called "Singapore" issues--such as competition, investment, trade facilitation and transparency in public procurement--must be agreed to at the Sept. 10-14 WTO Cancun ministerial session.

The EU Council also emphasized the need for the Cancun meeting to reach an agreement ensuring that multilateral environment agreements are not compromised by trade issues.

At the same time, the EU member states emphasized that while core labor standards were not part of the Doha Development Round, there were a range of other methods the Commission should pursue to integrate them into trade policy. Those included boosting the standing of the International Labor Organization in the WTO as well as promoting its generalized preferred tariff scheme in bilateral trade agreements.

Belgian Demand on Globalization Rejected

The EU member states approved the conclusions outlining their goals for Cancun meeting despite a demand by Belgium, which recently appointed a new government, that called for recognition of the social concerns over globalization. That demand was rejected, a Council of Ministers official said.

Following an agreement by the EU Council of Agriculture Ministers in June that for the first time cut the link between subsidies and farm production, other leading agriculture exports countries insisted that the EU had not gone far enough. However, EU member states made it clear that if the European Commission, which negotiates on behalf of the EU in the WTO, is to add the new reforms in the Doha Round, more concessions from the United States and the CAIRNs group of farm exporting countries, which includes New Zealand, Australia and Canada, are mandatory.

"The margin of maneuver offered by this CAP reform can only be used in the Doha Development Round on condition of equivalent agricultural concessions from the EU's WTO partners," EU member states agreed in a statement. "The EU is now in a position to lead the way towards an ambitious outcome on the negotiations on agriculture including the EU's offensive interests and other objectives such as non-trade concerns."

Agriculture Issues

Commission Spokeswoman Arancha Gonzalez stated that the EU is insisting that the United States reform its export credit regime and the use of food aid while the CAIRNs countries must agree to stop using agriculture boards, which the EU insists offer subtle subsidies for farm products. In addition Gonzalez said countries such as the United States will have to agree to EU demands that use of European geographical names on food and drink products such as Champagne, Sherry, Burgundy and others be phased out.

"Without any concessions in these areas, the EU will not be improving its agriculture offer," Gonzalez said.

Concerning industrial goods, which EU member states emphasized concerns nearly three-quarter of all world trade, the Cancun ministerial meeting must agree "on a single formula addressing tariff peaks, tariff escalation and high tariffs as well as action on non-tariff barriers."

On the issue of access to medicines, the EU member states repeated the demand that the United States agree in Cancun to the text that it insists has had overwhelming support in the WTO in December of 2002.

Core Labor Standards

The approval of an EU policy for promoting core labor standards stems from a Commission communication proposed in 2001 on the issue. After the EU and other countries failed to agree that labor issues be part of the Doha Round, the member states have been under pressure by trade unions and development groups to continue to find ways to address the issue. Several of the methods agreed by the member states are:

  • use of the EU's Generalized System of Preferences special scheme for the promotion of core labor standards;
  • integrated core labor standards and social governance in the EU's development policy;
  • promotion of more "effective dialogue" between the ILO and the WTO;
  • inclusion of respect of core labor standards in the examination of EU trade policy carried out regularly by the WTO.

"This initiative will kick-start the EU's efforts to find a new diplomacy based on increasing trade and promoting core labor standards with all our partner countries," said Social Affairs Commissioner Anna Diamantopoulou. "A key vector of this policy must be an empowered ILO."