New trade negotiations may lead EU to reform farm export subsidies

The EU’s Common Agricultural Policy (CAP) is again under pressure as the World Trade Organization bids to revive stalled negotiations on agriculture.

Against a background of growing pressure to reduce farm
subsidies and trade barriers, farm ministers have defended the CAP
reform during an informal Council on 9 May. They consider having
sufficiently reduced trade-distorting farm support, in particular
as far as market price guarantees and export subsidies are
concerned. Overall, the Irish Presidency insists the continuing
pressure on the EU to reform its subsidies system is

A Presidency paper stated that greater efforts might be needed
to communicate what benefits its farm reforms would bring to
international agricultural trade. "If the EU does not succeed in
this, there is a danger that the future of the EU's agricultural
policy will be determined, not by the Council of Ministers, but by
external forces, as WTO partners continue to demand further changes
from the EU," the paper says.

In a few days, trade officials and diplomats from five core WTO
members - the EU, Australia, Brazil, India and the United States -
are due to meet in Paris to try to kickstart trade talks. Their
meeting is expected to focus on lowering barriers to agricultural
imports, one of the biggest stumbling blocks in the 'Doha round' of
trade negotiations. European unwillingness so far to eliminate farm
subsidies by a certain date has been a major obstacle to reaching a
deal on agriculture in the stalled World Trade Organization
negotiations, which also cover industrial goods and services.

The Commission seems willing to adopt a more flexible stance to
revive progress in the WTO talks. On 10 May, it will offer to
eliminate farm export subsidies and to soften demands on new trade
rules on competition, investment, transparency in government
procurement and trade facilitation, the Financial Times


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