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How lucky we are…

Posted by Richard Monday, July 26, 2004

Foreign ministers of the 25 EU member states meet in Brussels today in a last-ditch attempt to finalise their "common position" on WTO negotiations.  These enter their final phase when 147 ambassadors meet for talks in Geneva on Tuesday.

The WTO meeting is scheduled for completion by Friday and is part of the so-called "Doha round" of talks, launched in the Qatari capital in late 2001 in the hope of kick-starting the world economy, reeling from the 9/11 suicide attacks. The idea was to give a multibillion-dollar boost to global commerce and lift millions out of poverty.

The talks already have a chequered history, having collapsed last September in Cancun, Mexico, when a number of EU member states, led by France, refused to allow the commission negotiator, Pascal Lamy, to make concessions on farming subsidies, which would have cemented a deal.

And once again, we are re-visiting old ground. In the run-up to the talks, the Robert Zoellick, US trade representative, is accusing Chirac of again blocking a deal. The French president is claiming that the draft agreement on the table is "profoundly unbalanced and contrary to EU (i.e., French) interests". He will not even accept the proposal as a basis for negotiation.

The draft, drawn up by Supachai and General Council Chairman Shotaro Oshima of Japan, includes the total elimination of farm export subsidies, although it makes no firm proposals on other aspects of farm support, particularly on U.S. programmes.

Also in the draft is a proposal to allow market access for certain sensitive products – such as sugar and cotton - produced by developed countries. Additionally, it attempt to draw up an "equivalence" between EU export subsidies and other support mechanism, such as food aid, which the US more commonly relies on. It is this areas that Chirac claims is "unbalanced".

Other countries, and particularly the developing countries such as India, are also unhappy about the draft, but are prepared to do a deal. But France is expected to veto any attempt by the EU to reach an accord that will enable negotiations to continue. Even though France is isolated in its stance, it is pressuring Lamy – who is also a French commissioner – to follow the French line.

This leaves the EU in "game-playing" mode, making a conditional offer to eliminate its export subsidies on agriculture products, but only if all other countries do the same. This is seen as a tactical manoeuvre which will enable it to duck the blame if the talks fail.

Zoellick is worried about failure and sees the Geneva talks as the last chance. Their collapse would create "a serious question about when or how or if one would be able to get the Doha negotiations revived", he says. WTO director-general Supachai Panitchpakdi echoes that sentiment, saying that failure could lead to a stalemate that could last for years.

As for the British interest, ours are best served by trade liberalisation, enabling us to buy cheaper agricultural products from many of our Commonwealth partners – including Australia and India – without the swingeing tariffs and quota restrictions imposed by the EU.

But, as always, since the UK has handed over its trade policy to Brussels, we will find ourselves falling into line with France – which traditionally dominates the EU negotiations - and paying more for our food, all the interests of protecting French farmers. How lucky we are to have the benefits of EU membership.