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Mandelson free to talk farm cuts in Hong Kong

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Published 19 October 2005

France has failed to limit the mandate of EU Trade Commissioner Peter Mandelson at the Hong Kong WTO ministerial summit. Germany has joined the UK in its efforts to cut down EU farm aid.

The importance that France attributed to the 18 October 2005 talks in Luxembourg is clear from the make-up of the country's delegation, which included no less than four ministers: Philippe Douste-Blazy (foreign affairs), Dominique Bussereau (agriculture), Catherine Colonna (European affairs) and Christine Lagarde (External Trade). Although France managed to win the support of Spain, Poland, Ireland, Greece, Portugal and other EU countries, there was an insufficient majority to limit Mr. Mandelson's negotiating mandate. In addition to the proposal, France proposed setting up a technical committee on farm aid, which could have become a permanent blocking factor for the reform of the EU's agricultural policy. From the Council's decisions:

  1. The Council recalled that its conclusions from October 1999 to July 2005 remain valid and together constitute the Commission's mandate for the Doha Development Agenda  (DDA) negotiations. The Council recalled as regards the negotiations in agriculture that the CAP reform is Europe's important contribution to the DDA and constitutes the limits for the Commission's negotiating brief in the WTO Round. 
  2. The Council underlined its support for Commission efforts to secure an outcome in line with the mandate. In that context, it welcomed the Commission’s commitment to continue those efforts and to strengthen the mechanisms to ensure that the Council is fully informed, on a regular and systematic basis, of developments in the negotiations. This process would include explanations to the Council, confirming that the Commission's action remained within the mandate, including, as necessary, the use of technical analysis. 
  3. The Council reconfirmed the importance of achieving a balanced outcome within and across all of the main elements of the Doha Work Programme, and its commitment to a successful result based on a broad and ambitious agenda with a specific focus on the needs and interests of developing countries. The Council underlined that all WTO partners need to make contributions to those negotiations, commensurate with their level of development. 
  4. In the light of the significance of these issues and, in the run-up to the Conference in Hong Kong of 13-18 December, the Council agreed to revert to the matter at its forthcoming meetings, and to meet as appropriate during the Conference itself in order to provide the Commission with any further necessary guidance. 
Positions: 

EU Trade Commissioner Peter Mandelson told EU governments not to soften Europe's stance on farm and other subsidies now. "Surely it would be the wrong reaction, and a terrible mistake for the EU, at the first sign of serious movement in the talks - movement that we have been calling for - to lose confidence and pull in our horns." Mandelson said: "Let me be clear. It is absolutely and unequivocally not the intention of the Commission to use the (world trade talks) to precipitate a new phase of CAP reform."

Commission President Jose Manuel Barroso, who was in Washington to discuss the WTO talks with US President George Bush, said, sitting in the White House Oval Office next to Bush, that the EU wanted "ambitious and balanced results on agriculture". Later he added that the EU would agree to open its markets to more farm imports if other countries agreed to drop barriers to trade in services and manufacturing. "If the others move, we will move." 

French Foreign Minister Philippe Douste-Blazy said Mr Mandelson's negotiating tactics were "unacceptable [...] We are talking about major sectors of European agriculture. Jobs are at stake and our job is to defend them".

"No negotiation is ever possible if you have to negotiate not only with the people in the room but also with a permanent committee in session," said Jack Straw, the UK presidency envoy.

France's main farm union FNSEA  accused Mr. Mandelson of "sacrificing European agriculture on the altar of [...] deregulation".

Next steps: 

The ministers in charge of external trade in the 148 WTO countries will meet on 13 to 18 December 2005 in Hong Kong to discuss a new world-wide trade agreement and development agenda.

Background: 

In a special meeting of the EU's foreign ministers in Luxembourg on 18 October 2005, which had been requested by France, ministers turned down a French initiative to limit Mr. Mandelson's mandate and to force him to withdraw the EU proposal made last week in World Trade Organisation negotiations. The WTO ministerial summit, which will take place in Hong Kong from 13 to 18 December 2005, is seen as decisive for the organisation's future direction. Limiting the Commission's mandate would have put a new world-wide agreement on agricultural tariffs and subsidies in jeopardy. 

Mr. Mandelson explicitly thanked Germany for supporting him in fending off the French initiative. Germany's repositioning is likely to deepen the divide on a reform of the Union's agriculture policy and on the EU's negotiation objectives for the Hong Kong WTO round. 

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