WTO Ministerial Conference 13-18 December 2005 - Hong
focus by the United Nations Office of the High Representative
for Least Developed Countries, Landlocked Developing
Countries and Small Island Developing States
EU response in Doha Round found lacking
By Forrest Laws, Farm Press Editorial Staff
Published November 14
The European Union tabled a new proposal that would reduce
tariffs on agricultural products by an average of 46 percent,
rekindling hope that a new Doha Round trade agreement could
be worked out in time for the WTO Ministerial Conference in
Hong Kong Dec. 13-18.
Most of the principal players in the Doha negotiations, including
U.S. Trade Representative Rob Portman, had little good to say
about the latest EU proposal, but most agreed it was something
to work with to keep the Doha talks moving.
“This is the most extensive proposal the EU has ever offered
as part of a multilateral trade round,” said Peter Mandelson,
the European trade commissioner. “It is within the mandate
provided, although it goes to the outer limits of that mandate.
This is Europe’s bottom line.”
Mandelson tabled the proposal on Oct. 28, one day after French
President Jacques Chirac said the European Union would not go
a step farther in making concessions on its agricultural programs
in the Doha Round. The French have been demanding that any Doha
Round proposals be submitted to a panel of EU agricultural experts.
Officials with the European Commission, the organization that
runs the European Union, said the proposal is conditional on
the Doha negotiators discussing industrial duties and commercial
services along with agricultural subsidies and tariffs.
The key points of the EU offer include:
-- A 46-percent reduction in the average of EU agricultural
tariffs – from 22.8 percent to 12.2 percent, nearly the
average of agricultural tariffs in the United States. The highest
EU tariffs would be cut by 60 percent and the lower by 35 percent
to 60 percent.
-- Setting the maximum agricultural tariff at 100 percent of
the value of the imported product.
-- A reduction in the number of “sensitive” products,
which would not be subject to tariffs reductions.
-- Reductions in tariffs for sensitive products and broader
tariff rate quotas for all sensitive products, which would allow
limited quantities of the products to enter EU-member countries
-- A 70-percent reduction in trade-distorting agricultural subsidies
or amber box payments and tighter disciplines in Blue Box spending
or less trade-distorting subsidies. The 70 percent would match
the amount of reductions in the EU’s 2003 reform of its
Common Agricultural Policy.
-- Total elimination of all agricultural export subsidies by
an agreed date, if other countries make similar concessions.
-- Differential treatment for so-called developing countries,
including higher tariff bands, lower tariff cuts and a maximum
tariff of 150 percent. No tariff reductions would be required
for the 50 least developed countries.
For all the rhetoric about it being at the “outer limits”
of the EU’s mandate, the proposal actually represents
a step back from earlier offerings, a spokesman for U.S. Trade
Representative Portman said.
“The proposed tariff reductions are lower than proposals
from the G20 developing countries and far lower than the U.S.
proposal,” said the USTR’s Christin Baker. “The
large number of exceptions for so-called sensitive products
apparently has not changed from earlier proposals, and another
element – the ‘pivot’ — actually walks
back from their latest offer.”
She said both would allow broad exemptions to the lower tariff
reductions the European Union tabled, thus making the EU proposal
less far-reaching than Mandelson claimed in his statements.
Senate Agriculture Committee Chairman Saxby Chambliss, who has
been speaking out on the Doha Round negotiations more frequently
in recent weeks, said he was disappointed with the EU proposal
but was hopeful the offer would improve with time.
“I have concerns with some of the provisions, specifically
those concerning counter-cyclical payments and the new blue
box,” he said. (The EU plan calls for stricter disciplines
on counter-cyclical payments, which are made to growers of program
crops during times of low prices.)
“The European Union needs to work with the United States
and other countries to make real concessions in market access
in order for the Doha Round to succeed. Ambassador Portman continues
to ably represent the United States, and I look forward to continuing
our close working relationship as we enter this critical period.”
The EU proposal came after a nearly two-week lull in the negotiations
that had WTO leaders, trade ministers from other countries and
U.S. farm organizations clamoring for the European Union to
respond to a U.S. proposal that pledged to reduce U.S. farm
subsidies by 60 percent and eliminate all export subsidies.
The latter also called on all nations to cap tariffs at 75 percent
and limit the number of sensitive products exemptions from tariff
Members of the AgTrade Coalition, a group of 39 farm and farm-related
groups, circulated a statement expressing their disappointment
over the lack of progress on market access in the latest round
of agricultural meetings at the World Trade Organization in
The U.S. proposal tabled by Trade Representative Rob Portman
on Oct. 10 would require the United States to cut its domestic
price supports by 60 percent and the European Union and Japan
by 83 percent (because the latter have much higher agricultural
subsidies than the United States).
The U.S. plan also includes a cap on tariffs of 75 percent and
progressive cuts with the highest tariffs being reduced by 90
percent. EU negotiators had little to say about the U.S. offer,
in part, because EU tariffs are higher on average than the 12
percent average for the United States until Oct. 28.
EU officials claim that Europe took the first step in reducing
farm subsidies with its 2003 reform of its Common Agriculture
Policy. France and other countries say that proposals already
made by Mandelson would force the EU to revise the CAP again.
The chief of the International Monetary Fund and the World Bank
also criticized the reluctance of some WTO members to reduce
farm subsidies and high tariffs.
Rodrigo de Rato, managing director of the IMF, and Paul Wolfowitz,
president of the World Bank, did not criticize the EU directly,
but clearly were referring to the latter in their comments about
the need for accelerating the pace of the negotiations.
“Some progress has been made in the last few weeks. Success
will now require key players to set aside their narrow interests,
show flexibility and for the ambitious Doha outcome the world
expects and needs,” they said in a joint statement. “The
stakes are too great to contemplate failure.”
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