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Europe adopts hardline stance on CAP cuts

(Monday, July 21, 2003 -- CropChoice news) -- Charlotte Denny, The Guardian: The European Union will today raise the stakes in vital global trade talks when it adopts a hardline negotiating stance for September's World Trade Organisation meeting in Cancun, Mexico.

Pascal Lamy, Europe's top trade negotiator, will insist on new talks about opening up developing countries to foreign investors as the price of making any cuts to Europe's $40bn (25bn) farm subsidies, according to a secret report leaked to the Guardian.

MPs on the international development committee warned last week that Europe could turn Cancun into a repeat of the WTO's disastrous Seattle meeting if it insisted on putting foreign investment on the agenda against the wishes of most developing countries.

The draft document that spells out Europe's strategy for Cancun was approved last week by top EU trade officials and will be rubber-stamped today by ministers. Although EU farm ministers agreed in principle last month to reform the common agricultural policy, the document says no changes will be made unless other countries make concessions to Europe's demands for less radical cuts to agricultural tariffs.

"It's total brinkmanship. The EU is saying, 'it's our way or the highway'," said Rachel Thompson, a trade analyst with consultancy Apco.

Europe's tactics are likely to infuriate other WTO members who had hoped last month's reforms were a sign that Europe was committed to real cuts. Brussels pays the biggest farm subsidies in the world, encouraging Europe's inefficient farmers to produce mountains of unwanted food that is dumped in the developing world, hitting local farmers.

With less than two months to go before the Cancun meeting, WTO negotiators face an enormous task in bridging differences on thorny issues such as agriculture, access to cheap medicines and investment. The talks that began nearly two years ago in Doha are supposed to be wrapped up by the end of 2004.

"If the EU position doesn't change, I would say there is a fifty-fifty chance that Cancun will be total failure," said Ms Thompson.