EU Prepares for WTO Agriculture Talks

As ministers and delegates of the 147 World Trade Organization member states converge on the shores of Lake Geneva on Tuesday, the main issue on the agenda will be agricultural policies -- an issue that pitted the developing world against rich industrial nations at last year's failed summit in Cancun.

This time around, the European Union is offering to eliminate subsidies on its agricultural exports and Brussels has called on the US to do the same.

"The Council (of ministers) confirmed the Union's commitment for an agreement on a balanced framework on future DDA (Doha Development Agenda) negotiations," read a statement issued by the EU's top trade ministers on Monday after a meeting held in advance of the summit.

At the same time, the EU trade ministers wrote, there was a need to "improve the balance" of the draft.

Top EU trade official Pascal Lamy said he would not agree to concessions on farm subsidies that went beyond hard-won reforms to the EU's Common Agricultural Policy (CAP) agreed to last year.

Additionally, Lamy said the EU would seek more concessions from the United States, its most important trading partner, on farm reform. So far, the US has not stated whether or not it would cut its own subsidy regime.

Trying to get back on track

The Doha round first commenced three years ago in the Qatar capital. The aim was to reach an agreement that would eliminate the €300 billion ($364.25 billion) in agricultural subsidies used by the richest countries to shore up their farming industry in order to provide developing countries with access to global agricultural markets.

Doha talks at a major WTO summit in Cancun, Mexico, ended in September without any deal after poorer countries walked out on the negotiations, alleging industrial nations had no interest in helping their developing neighbors.

Seeking to avoid a repeat of the diplomatic catastrophe in Cancun, Europe in recent months has shown more willingness to budge on the subsidies issue.

On July 16, WTO Director-General Supachai Panitchpakdi and General Council head Shotaro Oshima introduced a proposal for the future treaty that calls for all agricultural subsidies to be eliminated by a "date to be agreed."

German Economics Minister Wolfgang Clement called the WTO draft of the negotiating plan for the elimination of subsidies and trade barriers a "usable foundation" and for a deal on the negotiating schedule to be reached this week in Switzerland.

However, France reiterated its concerns that the draft "is deeply unbalanced to the disadvantage of the EU." With more than 2 million workers in the farming industry, France is the greatest beneficiary of the EU's generous agricultural subsidies. Chirac has publicly expressed his concerns that the EU will concede too much ground in the WTO talks.

But French Foreign Minister Michel Barnier (photo) seemed largely pleased with Monday's statement by Lamy that he would not allow any changes beyond last year's CAP reforms.

"The draft on the table in Geneva today does not conform to the aims or the interests of the EU," he said. "We need a rebalancing of this draft. The Commission agrees and will work for this."

In June 2003, the EU agreed to a sweeping reform of its €40 billion a year agricultural policy (see related story below) that de-linked subsidies from production.

At the request of France, the ministers will meet again Friday for a briefing from Trade Commissioner Lamy over the concrete negotiations. Lamy has said it is important that the EU, despite France's objections, stand behind its offer of eliminating export subsidies for agricultural products, step-by-step, until they reach zero.

Because trade policy is a central EU competency, unanimous votes are not required in the Council of Ministers, and France cannot exercise the veto power it enjoys in other policy areas.