Trade chief fights back over Cancun

Date:25/09/03

By David Cronin

THE close EU-US collaboration at the ill-fated World Trade Organization ministerial in Cancún was not an attempt to "screw the rest of the world", Pascal Lamy has insisted.

The trade commissioner argued that developing countries which felt there was an ulterior motive behind the transatlantic cooperation before and during the Mexican gathering had drawn their conclusions "erroneously".

Instead, he said that both Washington and Brussels had concurred that rich countries should take some action towards liberalizing agriculture markets in a way that brought tangible benefits to producers in poorer countries.

But the Frenchman claimed he had no mandate from EU member states to agree to the total elimination of EU's €3.4 billion-per-year export subsidies for farmers at Cancún. He has come under fire from developing countries and anti-poverty campaigners for allegedly backtracking on the agreement reached by the previous WTO ministerial at Doha in 2001, which committed rich nations to strip themselves of "all forms of export subsidies" with a view to scrapping them entirely.

Lamy recalled a "tense meeting" he had with the G21 group of developing countries at Cancún, where he was pressed to accept the principle of eliminating such subsidies. He explained that he was not prepared to do this but that the EU was willing to remove subsidies on products of specific interest to the developing world.

He also denied the common EU-US front in Mexico meant there "was one bloc against the other". He listed biodiversity, geographical indicators (the use of names like Champagne and Bordeaux to designate products from particular regions), and anti-dumping as issues on which the Union sided with the G21, the alliance led by Brazil, China and India.

And despite suggestions that he helped trigger the collapse of Cancún by holding firm - in the face of entrenched opposition from the developing world - on his demand that negotiations commence on global investment rules, Lamy maintained he had "shown a lot of flexibility" on that topic.

The commissioner was speaking at the Brussels launch of a new book* on transatlantic relations by Charles Grant of the London-based Centre for European Reform (CER).

He acknowledged substantial differences between Washington and EU capitals over such questions as climate change and biotechnology.

"There are a number of clearly different sensitivities on both sides of the Atlantic that do sometimes spill over on to trade," he remarked.

"We may try to manage them but I do not think we should ignore or paper over them. The answer is not "make love not war" but make pragmatic efforts [to resolve them]."

"Both sides of the Atlantic have to find ways to work together to meet the aspirations of the poorest people on the planet. We can and must work together so that we do not foment terrorism with the poison of poverty."

Charles Grant ascribed part of the blame on enduring strains in transatlantic links to the behaviour of the US president. "Why has Gerhard Schröder ended up in bed with Jacques Chirac on so many issues?," the CER director asked. "One of the reasons is that George Bush won't talk to him."

* Transatlantic Rift: How to Bring the Two Sides Together (CER, €16).