| Author (Person) | Cronin, David |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.9, No.29, 11.9.03, p33 |
| Publication Date | 11/09/2003 |
| Content Type | News |
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Date: 11/09/03 By David Cronin Pascal Lamy is willing to spend his time in the luxurious holiday resort of Cancún playing strip poker. At least that is what the trade commissioner indicated in July, when he said the EU was ready to "shed a lot of clothing" - in the metaphorical sense, we assume - as delegates mull over the key area of liberalizing agricultural markets. Lamy has pointed out that the Union proposed earlier this year to reduce support of a trade-distorting nature for farmers in its domestic markets by 55%. But domestic markets are just one part of the equation. Almost two years ago - during the World Trade Organization ministerial in Doha, Qatar - rich country governments promised to divest themselves of "all forms of export subsidies", with the aim of eventually eliminating them altogether. Such a measure is perceived as pivotal to making Doha a genuine 'development' round of trade talks by tackling the manifest injustice of a system that subsidizes every cow in western Europe to the tune of €2 daily - a sum greater than what more than half the world's population survive on each day. Anti-poverty activists argue that the EU is a major culprit in manipulating markets. A new Oxfam study, for example, dubs the Union's sugar regime as "one of the worst case of export dumping". "Europe produces sugar at three times the price of more efficient countries, such as Malawi and Zambia," the charity explains. "High tariffs and other price support measures keep competitors out. This creates production incentives that generate surpluses of seven million tonnes a year, making the EU the world's largest exporter - its exports are estimated to lower world prices by a fifth. Meanwhile, restrictions on Mozambique's imports into the EU mean that the country loses almost $100 million (€90 million) a year - almost as much as the country receives in European aid." Sugar is deemed such a sensitive sector by European policy-makers thatit is largely exempt from the Common Agricultural Policy reforms agreed in June. That is despite it and the dairy sector accounting for the bulk of the Union's €3.4 billion-per-year export subsidies. Inside US Trade magazine recently carried this comment from Lamy: "We cannot today say that we can eliminate export subisidies. Our present level of reform doesn't allow us to say that." Since then, however, he has qualified his statement by declaring that the Union plans "to reduce export subsidies and even eliminate them for products of interest for developing countries" - but that the US must make comparable sacrifices. At this juncture, there are not many signals that Cancún will offer the quantum leap towards subsidy scrapping by the rich world that developing countries are seeking. A draft declaration for the ministerial - prepared by Carlos Perez del Castillo, chairman of the WTO's General Council - reiterates the commitment made in the Doha declaration but lacks a firm timetable for elimination. In a joint submission, the EU and US have recommended cuts in the tariffs they impose on produce from many developing countries. But Andreas Schneider, an agriculture expert with the Centre for European Policy Studies, suggests the blueprint is not as generous as its authors would have us believe. "The biggest controversy has been caused by the proposal to extend market access to some developing countries, notably the poorest ones, but not the more developed ones, such as Brazil and Argentina," he says. "Apart from being unfair, this move has been widely seen as a ruse to fend off potential competition from countries which hold a competitive advantage in agricultural production." One of Lamy's key objectives at Cancún will be to spark negotiations on the four so-called Singapore issues - investment, competition, trade facilitation and transparency in government procurement. Shortly before leaving for Mexico, he declared that Europeans have taken these issues to heart because they wish to see a level playing field. But the notion that developing countries should not be allowed to discriminate between foreign investors and domestic firms has enraged many of them, with India especially vociferous. Lamy has argued the important thing is to launch talks on these topics, regardless of the lack of consensus about them. While EU trade officials consider the draft Cancún declaration as far from perfect, they note that it has incorporated much of their thinking, especially on agricultural subjects. One compared it to the proposal on the table at Doha, which concluded in launching a new round. In theory, the 'Doha development agenda' is supposed to lead to a comprehensive new framework for global commerce by the end of 2004. So the WTO's supporters will be praying that it can give the agenda a new lease of life. But if the talks collapse amid the kind of acrimony witnessed at the Seattle ministerial in 1999, the embarrassment for the body's highest echelons will be huge. "Failure at Cancún will do to the WTO what the Iraq war did to the UN - undermine its influence and marginalize it," predicts Justin Forsyth, Oxfam's director of policy. |
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