EU offer to slash farm duties dismissed as ‘propaganda’

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An attempt by the EU’s trade chief to impress his counterparts at global trade negotiations in Geneva with a pledge to cut the bloc’s agricultural tariffs by as much as 60% fell flat as both France and Brazil denied the proposals were anything new.

World Trade Organisation Director General Pascal Lamy had convened trade ministers from 35 key negotiating countries on 21 July in a bid to finally achieve a breakthrough in seven year talks on liberalising international trade. 

At the meeting, EU Trade Commissioner Peter Mandelson sought to kickstart proceedings with the announcement that the EU was ready to raise its offer on cutting farm tariffs to 60% – rather than the 54% the bloc had previously committed to. “We’ve decided to help the negotiations this week get off to a strong start by raising the average cut in our agricultural tariff,” Mandelson said. 

But he stressed that the new offer was conditional on rapidly emerging economies such as Brazil, India and China coming forward with improved offers on lowering industrial tariffs. Indeed, better access to these markets, which are still highliy protected, is a key demand of European manufacturers and is seen as a necessary trade-off for the sacrifices European farmers will be asked to make. 

60% – nothing new?

However, while Mandelson presented his offer as “a very considerable improvement on our own part,” his counterparts both within the EU and outside appeared far from convinced. 

Brazil denounced the proposal as a pure artifice, while EU Agriculture Commissioner Mariann Fischer-Boel said the offer was “nothing new” and French State Secretary for Trade Anne-Marie Idrac denied that the EU was ready to raise its offer in any way. 

According to Idrac, the difference between the two figures is simply due to a recalculation of the Commission’s earlier offer, with the higher figure reflecting the inclusion of tropical products, such as bananas – on which a deal is yet to be achieved – in the tariff cut calculations. 

Commission President José Manuel Barroso welcomed the start of discussions in Geneva but stressed that "Europe cannot be the sole banker of this deal". "Moreover, Doha is not just about agriculture – we also need to make progress on industrial tariffs and in other areas of the negotiations, such as services and geographical indications," he added. 

EU Trade Commissioner Peter Mandelson agreed that a deal could not be achieved without "some political 'must-haves'" for the EU. "Why should European industries like cars and textiles see their highest tariffs slashed to less than 6% at home while the tariff protection of the same sectors remains untouched or barely affected in the fastest growing economies in the world? A limited number of developing countries must accept tariff cuts [for industrial goods]. They must be real. These cuts must provide some new market access in practice. That is the political bottom line," he insisted. 

French State Secretary for Trade Anne-Marie Idrac, whose country currently holds the EU presidency and is a staunch defender of European agriculture, denied that Mandelson had surpassed his mandate with his pledge for agricultural cuts of 60%. "Was there new progress, new percentages? The answer is no. Peter Mandelson this morning had clarified [...] what technical discussions have come up with - nothing more, nothing less," she said. 

French Agriculture Minister Michel Barnier agreed that there had not been an updated offer, adding: "No EU state would be prepared to accept a new offer on this issue."

According to the AFP, Brazilian Foreign Minister Celso Amorim also dismissed Mandelson's statements as "meaningless [...] purely statistic gimmickry". Brazil's top negotiator, Roberto Azevedo, added: "This number is a consequence of the different numbers on which the EU had already agreed on among themselves." 

Nevertheless, Crawford Falconer, who chairs the WTO talks on agriculture, welcomed Mandelson's statement as a step in the right direction. "Politically, this is the first time they've made that commitment," he said, but added: "It's no surprise they can do 60 […] I think there are others who can." 

But Shelby Matthews, who represents the EU's agricultural lobby Copa-Cogeca, told French newspaper Les Echos that European farmers had taken Mandelson's fresh statements "very badly". She stressed that the earlier EU pledge to cut tariffs by 54% had already been way over the initial "red line" of 39% and would already have represented "annual losses of €30 billion for the sector." Matthews also lamented that while the EU was cutting its farm tariffs, "the Americans are increasing their subsidies". 

European industry leaders also lamented the current state-of-play, accusing the EU of seeking a deal at all costs. European automobile manufacturers  notably spoke out against the draft WTO text on non-agricultural market access, saying it "offers nothing in exchange for the proposed strong reduction of EU tariffs" and will limit the bloc's export opportunities and harm investment and employment in Europe. ACEA Secretary General Ivan Hodac lamented: "The European Commission seems willing to sacrifice the European automakers and other important manufacturing sectors in order to strike an overall deal on Doha." 

NGOs are also skeptical about a deal, with ActionAid insisting that "no deal" remains a better option than the current "bad deal", which is on the table and under which poor countries "would be worse off". "The existing Doha deal is skewed in favour of developed countries. According to the most recent July draft text, major developing countries would have to cut tariffs on industrial sector goods by an average of around 60% while major developed countries would have to reduce their tariffs by an average of less than 30%," it notes, adding that this would result in "huge job losses" for China, India and Brazil.

The Doha Development Round, which aims to liberalise global trade and extend the benefits of globalisation to developing countries, was launched by ministers of WTO member countries in November 2001 in the Qatari capital, Doha.

Talks have been continuing on and off for the past six and a half years but governments have thus far failed to achieve any kind of convergence on the reduction of farm subsidies and tariff cuts on industrial and agricultural products. 

  • 21-26 July 2008: WTO trade officials meeting in Geneva

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