New EU proposals

The EU made its new agricultural proposals today.

This press release from EU Agricultural Commissioner Mariann Fischer Boel provides details: EU tables new offer in Doha World Trade talks; calls for immediate movement on services and industrial goods.

The EU proposes:

Conditional on satisfactory movement in other areas, the EU offer proposes:

• A 60% reduction in the EU’s highest tariffs. A range of tariff cuts between 35% and 60% for lower tariffs. A cut in our average agriculture tariff of 46% - from 22.8% to 12.2%.
• A maximum agricultural  tariff of 100% - as demanded by developing countries;
• A reduction in the number of sensitive products designated by the EU;
• Reductions in tariffs even for sensitive products – and wider Tariff Rate Quotas (TRQs) for all sensitive products – meaning more market access;
• A 70% reduction in trade distorting agricultural subsidies – as agreed in the EU’s 2003 CAP reform, and tighter disciplines on Blue Box spending;
• The total elimination of all agricultural export support by an agreed date, if others discipline their export support;
• Differential treatment for developing countries: higher tariff bands, lower tariff cuts and a maximum tariff of 150%. No tariff cuts for the 50 Least Developed Countries (LDCs)

The conditions:

EU proposals in market access are strictly conditional on further clarification from other developed countries on the elimination of their forms of export support. US commitments on Food Aid and Export Credits are not yet sufficient. Australia, Canada and New Zealand need to provide further commitment on the reform of their State Trading enterprises. The EU also seeks real disciplines on the most trade-distorting US farm payments (Counter Cyclical Payments).

The EU proposals are also strictly conditional on the acceptance by our negotiating partners of a number of proposals in the negotiating areas of the DDA outside of agriculture:

• In trade in industrial goods, the EU wants agreement before Hong Kong on a progressive formula that cuts into applied tariffs;
• In services, the EU wants to see negotiations complemented by ambitious mandatory country targets for services sectors to be liberalised – agreed at Hong Kong;
• An international register protecting Geographical Indications (GIs) in all WTO Member States.
• In WTO Rules negotiations, the EU wants the WTO to negotiate between now and Hong Kong a list of issues to be resolved including all major impediments to international trade created by abusive recourse to antidumping
• In development, the EU wants assurance that there will be a range of proposals ready for Hong Kong including a Trade Related Assistance package, and agreement that all developed countries should extend tariff and quota free access to all Least Developed Countries no later than the overall conclusion of the DDA.

Here are the EU proposals themselves: EU Agricultural Proposals of October 28 (courtesy of the International Centre for Trade and Sustainable Development - ICTSD)

Here is Peter Mandelson's statement outlining the new offer presented by the EU this afternoon: New EU offer in Doha talks.  Statement by Peter Mandelson, Brussels, 28 October 2005 .

And here is the EU answer to "frequently asked questions": Doha Round: EU offer in agricultural negotiations .  The commission anticipates French concerns in this one:

Is this offer within the Commission’s negotiating mandate from the Council?

Yes. The undertakings the EU has offered on the different pillars of the agricultural negotiations are within the 2003 CAP reform process. They are also conditional on progress both within the agricultural negotiations and in the other areas of the DDA. The Commission's mandate requires the Commission to respect the 2003 CAP reform as the limit  of its action and to use the margins of manœuvre provided by the CAP reform only on condition of equvalent agricultural concessions from our WTO partners and to achieve a balanced outcome This is expressed in the Council Decision of June 2003 on the reform of the CAP:

“The CAP reform is Europe’s important contribution to the DDA and constitutes the limits for the Commission’s negotiation brief in the WTO Round. Its substance and timing are aimed at avoiding that reform will be designed and imposed in Cancun and/or Geneva – which could happen if we went there empty handed. The Council stresses that the margin of manoeuvre provided by this reform in the DDA can only be used on condition of equivalent agricultural concessions from our WTO partners.”

On market access, the Commission is guided by the Council’s endorsement of the 2004 July Framework Agreement and its call for “substantial new market access” in agriculture. The current offer provides substantial new market access in agriculture, which is a crucial component of the development goals expressed by the Council, but does not jeopardize the EU farming sector.

The EU offer is strictly conditional on equivalent concessions from our WTO partners in agriculture and in other areas of the Round. It will not remain on the table if there is not satisfactory progress in these areas.

William Schomberg and Jeremy Smith report here: EU launches bid to keep global trade talks alive  (Reuters, oct 28). 

The Bloomberg has a different emphasis: EU Offers Greater Farm-Tariff Cuts in Snub to France . Peter Gallagher answers a question that's been in my mind: France is a member of the EU, what are its options if it concludes the EU has exceeded its mandate?  Testing le défi français on Agriculture

Oxfam  is encouraged:  A glimmer of hope from EU but Oxfam warns of the fine print  (Oct 28).  The Indians have mixed feelings: EU's new proposal at WTO, NAMA offer unacceptable to India (OutlookIndia.com, Oct 28):

"The proposal on agriculture is positive and constructive but the Non Agriculture Market Access (industrial tariffs) offer is compeletely unacceptable to India. It is in violation of the July Framework," a senior Commerce Ministry official told PTI...

On industrial goods, EU wanted an agreement before Hong Kong on a progressive formula that cuts into applied tariffs, which India said was totally unacceptable...

The US is disappointed.  An initial response form a spokeswoman for the US Trade Representative is here: Statement from USTR Spokeswoman Christin Baker:

“From our early analysis, we are disappointed with the new EU proposal.  While in some ways it is a step in the right direction and we acknowledge the EC’s efforts, much more needs to be done.  First, the proposed tariff reductions are lower than proposals from the G-20 developing countries and far lower than the U.S. proposal.  As concerning, the large number of exceptions for so-called sensitive products apparently has not changed from earlier EU proposals, and another element – the ‘pivot’ – actually walks back from their last proposal.  Both of these elements would allow substantial loopholes to the relatively lower tariff cuts the EU has offered.  If the final Doha agreement on agriculture were to go no further than this, other areas would also be weak and the Doha Round would not approach its potential for promoting development, opportunity and global economic growth.”

The Australians, likewise, are concerned about the sensitive product loophole (EU slammed for giving too little on tariffs ,Tim Colebatch, The Age, Oct 31):

A spokesman for Trade Minister Mark Vaile said yesterday Australia was disappointed with the EU offer...

Australian officials estimate that with up to 176 tariff lines excluded from the EU's offer, it could mean hardly any new market access in Europe for Australia's beef, dairy and sugar exports.

William Schomberg and Douglas Palmer report that she also pointed to the fact that the EU wants liberal rules on designation of sensitive goods (as many as 8% compared to the US desire to limit them to 1%) as loophole. EU makes bottom-line trade offer, US disappointed (William Schomberg and Douglas Palmer, Reuters, Oct 28)

She said the EU's proposal to classify 8 percent of its tariff lines as "sensitive goods" -- meaning those tariffs would be cut less -- represented a substantial loophole.

The United States and other countries want the EU to cut the proportion of sensitive products such as beef and poultry to just 1 percent of the total.

Schomberg and Palmer also report that the French are non-committal for now:

A French source said Paris believed the new offer might have gone too far.

"We have doubts about the compatibility of the offer with the mandate and about the appropriateness of making this offer now," the source said.

He said Paris was seeking clarification from the Commission.

The French apparently spent Friday trying to understand the implications of the proposal.  Jon Boyle reported  France seeking details of EU trade offer (Reuters, Oct 28):

French Trade Minister Christine Lagarde confirmed on Friday that Paris was seeking clarification from Brussels that the EU's latest offer in world trade talks respects the mandate given EU trade chief Peter Mandelson...

Lagarde told Reuters that Paris wanted to know "whether or not the revised package which has been put together is in line with the mission that was given to the Commission and, particularly, is in line with the Common Agricultural Policy...

France wanted to see if the overall farm package, including restitution of export support and market access principles, complied with Mandelson's terms of reference, she said.

"It's the combined offer that we want to be able to assert and assess," she said. However, it would take time to review the detailed 12-page offer, she added...

William Schomberg outlines the day's schedule (EU seeking to keep global trade talks alive , Reuters.UK, Oct 28):

The EU's trade and agriculture commissioners are due to hold a teleconference in the afternoon with counterparts from the United States, Australia, Brazil and India who are demanding big import tariffs cuts to open up Europe's protected farm markets.

Before that, the commissioners will explain to EU ambassadors in Brussels how much further they intend to go in offering to cut tariffs in order to save a World Trade Organisation (WTO) round.

Revised 6:30 AM, ALT Oct 31

Comments

[Hardwin Jones]

Fantastic summary of the twists and turns, and great to have the responses from different parties (Oxfam, India) in one place. I've quoted and linked to you.. And I think your blog and Inquit are the first places I'm checking, other than news sources, for updates... guess we'll wait and see what happens this week, although I'm wondering whether any more substantive action will happen before Hong Kong, or if the steam has been released for now.