Question of the Week: Why can’t the EU lead by example by eliminating farm export subsidies before everyone else?

Date: 13/05/04

THE European Commission this week sought to revive the Doha round of world trade talks by offering to scrap farm export subsidies - but on the condition that other rich countries do the same. We asked Pascal Lamy, the European trade commissioner: Why can't the EU lead by example by eliminating these subsidies before everyone else?

Lamy: The simple answer is that developing countries want all forms of agricultural export support to disappear. All forms of backing exports, not just the EU programmes, distort trade. All forms make life hard for the poorest countries.

So they all have to go.

The EU's export subsidies have already declined from €10 billion ten years ago to less than €3bn today.

So not only are they less costly today, but we don't want to remain the only bad guys. The US has export credit programmes worth more than €4bn.

A unilateral effort by the EU would mean that developing countries would wake up one morning, to find that only a small corner of the playing field, covered by EU export subsidies, had been levelled.

That would be unfair to EU exporters, but still more unfair to developing country producers.

That's the most important reason why we say that we are ready to make this move provided that there are parallel efforts on all forms of export competition from the other countries involved, notably the US, Canadaand Australia.

The second reason is to gently remind your readers that this is a negotiation. The reality is that if we were to give up our export support programmes tomorrow, unilaterally, where's the pressure on the US, Canada and Australia to do likewise?

Their farmers want to keep export support as much as our farmers do.

So we want to see others match our efforts in this area and we also want to see an acceptable outcome on market access issues, domestic support and non-trade concerns.

That is a question of fair balance for all.

The question is answered by Pascal Lamy, European Commissioner for Trade.