EU farm subsidies ‘imperil trade round’

By Stewart Fleming

Date: 30/06/05

Ernesto Zedillo, the former president of Mexico, has warned that the Doha trade liberalisation talks are facing disaster, in part because of the European Union's protectionist agricultural policies.

"We have to be frank, the Doha Development Round of trade liberalisation talks so far has been a failure the round is in a serious crisis," Zedillo told a conference organised by Bruegel, a Brussels think-tank, on Tuesday (28 June).

Zedillo, who is chairing the United Nations Millennium Development Project on the multilateral trading system, blamed lack of progress on the Union's farm subsidies. "The biggest problem is European agricultural protectionism. The EU has moved but the movement is too little and for the most part cosmetic.

"We have not met negotiating deadlines and the spirit of the Doha round, that it should be aimed at supporting developing countries, is not happening," he said.

Zedillo's gloomy assessment of the outlook for the world trading system was shared by Clayton Yeutter, the former US trade representative during Ronald Reagan's presidency, and Peter Sutherland, the first director-general of the World Trade Organization (WTO) and a former European commissioner.

"We have not accomplished very much in the Doha talks and time is running out," Yeutter said. Arguing that the US would soon switch its focus from completing regional trade agreements to making the Doha Round its top priority, Yeutter urged every member of the WTO "to swear to make the multilateral trade talks its top priority. If not, Doha is in jeopardy".

Sutherland, now chairman of investment bankers Goldman Sachs International, said: "We are at a moment of high danger for the WTO."

The world was struggling to accommodate China and India into the international trading system and at the same time anti-globalisation protesters and their "high priest," the Nobel Prize-winning economist Joseph Stigliz, were adopting positions which were "destructive of the interests of poor countries", Sutherland said.

Zedillo said the real threat to the international trading system was coming from mushrooming protectionism. Not a month goes by now, he said, without some new trade crisis. "China is under siege [by countries] who want to victimise it because of its success," he said, pointing to the introduction of quotas on Chinese textile imports in Europe and the US.

India and Brazil are also very protectionist, to their own detriment, Zedillo said .

The Mexican former president urged the leaders of the Group of Eight industrialised countries, who meet next week in Gleneagles, Scotland, to put their political weight behind the trade talks.

• Stewart Fleming is a freelance journalist based in Brussels.

Comments by former Mexican President, Ernesto Zedillo, who warned that the Doha trade liberalisation talks were facing disaster, in part because of the European Union's protectionist agricultural policies.