Rome warns of threat to EU farming from free trade

Date: 02/05/1996

ITALY is calling on its Union partners to think very hard before jumping into a new generation of free trade agreements.

In a toughly-worded paper to be presented at an informal meeting of EU agriculture ministers in Otranto next week, the Italians ask whether the Union “can allow itself the luxury of sacrificing even parts of its agriculture on the altar of free trade, either at a regional or world level”.

The meeting will provide southern member states with their best opportunity yet to bang the drum over their concern that the liberalisation of global trade threatens the existence of EU agriculture.

Time and again, ministers from France, Spain, Italy and their southern neighbours have fought Commission initiatives to negotiate preferential trade agreements with countries as diverse as Morocco or South Africa.

Italy believes there may be insufficient coordination between Commission departments dealing with external relations and development policies on the one hand, and Directorate-General VI, responsible for agriculture, on the other.

The Mediterranean states also feel that DGVI's internal policies fail to reflect concessions made to third countries sufficiently.

But Italy's contribution to the debate is unlikely to find much favour with the more 'liberal' northern member states, who point out that, as often as not, agricultural products are left out of the terms of such agreements. “Obviously there's a need for coordination, but the effects have hardly been massive, so we need to get things in perspective,” said one official.

Italy's caretaker Farm Minister Walter Luchetti will stress that following the GATT agreement and the reform of the Common Agricultural Policy, EU farming is at “a delicate stage of transformation”.

While his memorandum admits that the reform has had largely beneficial effects for Europe's farmers, Luchetti doubts the wisdom of opening up markets too rapidly.

Although political and commercial issues are accepted as valid grounds for policy decisions, “they cannot be considered sufficient to justify the establishment of a free trade area or a customs union”, Rome argues, adding that free trade areas do not automatically bring advantages.

Countering arguments that the damage to agriculture is perceived rather than real, the paper stresses that the exclusion of farming from the terms of such deals “can only be partial and temporary”, because of pressure from industrial interests and the need for pacts to be compatible with the GATT agreement.

If things remain as they are today, Italy argues, any benefits accruing from closer trade ties with non-EU countries “will be relatively limited and will be far outweighed by the cost to our agriculture”.

Ministers will be asked to consider whether free trade areas are an appropriate policy direction for the Union to pursue, or whether a less wide-ranging extension of existing cooperation would not be more appropriate.