KILLARNEY, Ireland; BRUSSELS, Belgium – The European Union said May 10 it wanted to boost world trade talks by offering to end billions of dollars of aid for agricultural exports, a move welcomed by Washington, slammed in France and greeted cautiously by other trade partners.
France, a major beneficiary of the EU’s $50.89 billion US of farm handouts, is against the initiative, which is conditional on other big farm spenders taking similar steps, but Germany and the Netherlands backed it.
“We feel that a breakthrough is possible and the EU is ready to do its part,” European agriculture commissioner Franz Fischler said.
Read Also
Rich life took him from sky to ground
World War II veteran Burns Wood shares some memories of his time on the Alberta Sugar Beet Growers board as the organization celebrates its 100th anniversary in 2025.
“All our export subsidies are effectively on the table.”
The EU now spends $3.31 billion on export support and Lamy said the United States should take similar steps to end its $3.2 billion of subsidies and trade-distorting food aid, adding that Canada and Australia should reform their export trading boards.
An official in Canadian agriculture minister Bob Speller’s office said there was no change in Ottawa’s long standing policy that the CWB complies with World Trade Organization rules and is not up for negotiation in global trade talks.
“The Canadian Wheat Board isn’t on the table. The wheat board as a body itself is fine,” one official said. The CWB minister’s office did not immediately have a comment.
Negotiators, expected to miss an end of 2004 deadline to conclude the WTO talks, want a framework by the end of July.
“I hope this will provide a shot in the arm to the overall negotiations,” said U.S. trade representative Robert Zoellick.
He noted an existing U.S. offer to end export subsidies and said Washington was ready to negotiate eliminating subsidies within export credits and on food aid.
“We look to others to show a similar spirit by stating their willingness to end monopolies in state trading enterprises and differential export taxes.”
French agriculture minister Herve Gaymard said Lamy and Fischler had overstepped their mandate.
“We are very opposed to this,” he told reporters at farm minister talks in Ireland.
German farm minister Renate Kuenast said the EU move was an important signal while the office of Dutch economy minister Jan Brinkhorst said he was pleased.
The EU is the biggest user of export aids, which allow the bloc’s expensively produced farm products to compete with cheaper goods from nations like Brazil and Australia.
Agriculture has been the key to unlocking the world trade talks, which economists say could boost long-term world growth. The EU has been under pressure to make a substantial move.
“I think it helps. I do not want to sing victory but they are giving positive signals,” said Mexico’s WTO ambassador, Eduardo Perez Motta.
His country, along with India, Brazil and China, is a part of the Group of 20 developing nations, which united to win gains from richer trading states, particularly on farm issues.
Latin American diplomats were suspicious the EU’s offer to give poor countries more flexibility in meeting WTO commitments was an attempt to split the developing country camp.
The EU also urged progress in the two other key areas of the negotiations: cutting domestic farm aid and bringing down high barriers to agricultural markets. The EU, the U.S. and Japan are the biggest users of such measures.
The EU move is to be discussed by some 28 trade officials, including Lamy and Zoellick, who were to meet May 13-14.
It will be the last chance to bring so many ministers together before the July deadline for the framework.
Lamy said progress was needed in the other key areas of the talks, such as opening markets to industrial goods and services. He also signalled flexibility in the talks on market access.
A current proposal would allow the EU and countries like Japan to keep high tariffs on politically sensitive goods.
This has been rejected by the G20 and exporters such as Australia as too soft on rich subsidizers and too hard on poor states.
