EU Trade Policy and Non–Trade Issues: The Case of Agricultural Multifunctionality

Abstract: Non–trade issues are gaining increasing importance in the EU’s trade policy. The case of agricultural multifunctionality is an example of the EU trade policy’s approach in dealing strategically and structurally with non–trade issues in international trade. In the context of the Doha Round, the concept has been of minor direct importance despite its prominent rhetorical promotion at the beginning of the negotiations. Indirectly, the concept has had a more significant impact on the negotiations as it allows the EU to maintain an overall high level of agricultural subventions due to its compliance with WTO rules of non–trade-distorting support. This indirect impact, however, weakens the EU’s negotiating position as it focuses the discussion on traditional agricultural support and puts the EU in a defensive position instead of allowing an offensive promotion of its concept of agricultural multifunctionality. It can furthermore be argued that the strategic use of multifunctionality in the Doha Round does not generally support the EU’s negotiation objectives due to divided competitive advantages on multifunctionality among WTO Members. One of the EU trade policy’s strategies in facing this situation can be found in a shift of agricultural non–trade concerns beyond the WTO framework towards a level of legally non–binding, private–market regulation. This shift can also be seen in the structural impact of agricultural multifunctionality on EU trade policy, illustrated by the semi–formal Civil Society Dialogue of DG Trade and the European Commission’s Corporate Social Responsibility initiatives.