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| EU Trade Commissioner Peter Mandelson. On Thursday Pascal Lamy, the Director General of the World Trade Organization - WTO, said the US tariff-cutting proposal was roughly five times as ambitious as that of the EU. |
France on Thursday night requested an emergency meeting of European Union ministers to discuss growing worries in Paris that Europe will concede too much ground in the Doha round of trade talks.
Ireland supports France's move and the Irish Minister of Agriculture has criticised EU Trade Commissioner Peter Mandelson for being "unnecessarily concessionary."
Foreign firms are responsible for 90% of Ireland's industrial exports and the Irish economy has been a huge beneficiary of free trade. However Ireland opposes changes in agricultural trade as the EU's Common Agricultural Policy provides Ireland with the highest per capita gains from the EU Budget. In 2004, Ireland had a net gain of €1.6 billion from the EU that was paid by a small number of Member Countries including the Netherlands, Germany and the UK.
On Tuesday the EU put forward an amended agricultural market access offer that would provide less flexibility in cutting tariffs but envisages a maximum reduction of 50 per cent for very high tariffs compared with 90 per cent proposed by the US. The percentage of so-called sensitive products, subject to smaller tariff reductions, would be cut under the EU proposal from 10 to 8per cent of tariff lines, against the US proposal of 1 per cent. This would still leave 180 EU products treated as "sensitive".
The EU, which spends roughly three times as much on farm support as the US, said it would cut by 70 per cent those domestic subsidies believed to distort trade. The US had requested the EU to agree to an 83 per cent cut, offering a 60 per cent reduction itself. The EU did not give a date for ending farm export subsidies to match the US offer of 2010.
Peter Mandelson, the EU Trade Commissioner, said rich countries should cut their highest farm tariffs by 50 per cent compared with the 90 per cent reduction suggested by Rob Portman, his US counterpart.
Europe and Japan maintain high farm tariffs and want to protect some products from cuts.
“The US proposals are likely to be seen as excessively ambitious by a vast majority of WTO members,” an EU spokesman said. Japan said the US offer was “not a basis for negotiation”.
While the focus is on subsidies, the World Bank has estimated that 92 per cent of the benefit of rich nations' agricultural liberalisation to the developing world will result from tariff cuts.
Will Martin, a World Bank trade economist, was reported as saying that large gaps between permitted ceilings and actual applied tariffs meant that the EU's proposed cut might not result in real increased access.
“Our research indicates you need to get up to cuts of around 75 per cent on the highest tariffs, combined with strict limits on exemptions, before you start making a real difference,” Martin said.
The US proposal to cut its limits on trade-distorting subsidies by 60 per cent and halve the limit on less distorting subsidies, known as the “blue box”, would result in much smaller cuts in actual subsidies. It would also allow the US to keep some controversial programmes including “counter-cyclical payments” that compensate farmers for low prices.
“The US proposal to lower its ceiling . . . in the blue box cannot be assessed in the absence of commitments to reform and discipline the payments within that box,” Mr Mandelson said.
In return for its offer, the US is asking for developing countries to cap their farm tariffs at 100 per cent.
The UK, which holds the EU's presidency, was on Thursday night considering whether to call a special meeting of foreign ministers in Luxembourg on Tuesday at France's request.
“A meeting will be helpful. It will help clear the air. There are a lot of economic and political interests at stake,” a European Commission trade official said on Thursday night.
Ministers from the core negotiating group of World Trade Organisation members - the EU, US, India, Brazil and Australia - are due to meet in Geneva next week to try to build on recent offers to cut farm tariffs and subsidies.
Mandelson's offer was judged by the US to be too modest compared to its own, particularly on cutting agricultural tariffs.
On Thursday Pascal Lamy, the Director General of the World Trade Organization - WTO, said the US tariff-cutting proposal was roughly five times as ambitious as that of the EU. “Everybody will have to move we all know that,” Mr Lamy said.
Mandelson faces opposition from some of the most influential member states, led by France, to deeper cuts in tariffs. Last week Dominique Bussereau, the French farm minister, gained 13 member states' signatures including Ireland's, on a letter urging Mandelson to consult them before making any concessions on agriculture.
In a speech on Thursday night in London, Mandelson said the talks had reached a critical point and needed to move forward. “We are rapidly approaching the choke point where the different pieces either fall together or fall apart,” he said. “The only way the round can succeed is if the result is an ambitious one.”
Irish Junior Minister tries to ride two horses at the same time
Minister Ahern reiterated Ireland’s position as one of strong support for a successful outcome in Hong Kong across the full DDA agenda reads the press release as an Irish Junior Minister tries at the same time to pander to Irish farmers and reassure them that Ireland will not betray them.
Why would self styled "Minister Ahern" go into detail on the complexities that have to be addressed to achieve success in the current trade talks, when he obviously feels that bullshit and spin are a sufficient substitute?
The following is a transcript of the press release:
At his request, Minister for Trade and Commerce Michael Ahern met today (Friday 14th October 2005) in Brussels with Trade Commissioner Peter Mandelson and sought assurances that Ireland’s strategic concerns are being fully taken into account in the negotiations leading up to the December Trade Summit in Hong Kong.
Commissioner Mandelson is the lead EU negotiator in the talks currently taking place in advance of Hong Kong, at which it is hoped that substantial progress can be made on the Doha Development Agenda (DDA).
Minister Ahern said:
“I was anxious to get a first hand report from Peter on the current state of play following his intense negotiations this week with WTO Ministers in Geneva.”
A key issue for Ireland, and one which Minister Ahern conveyed to the Commissioner, was that the Commission adhere to the mandate given to it by the EU Member States in these negotiations, particularly as it impacts on agriculture. On this point, Minister Ahern stressed that the EU has already made a substantial contribution to a successful outcome in Hong Kong with the reforms to the Common Agricultural Policy in 2003.
Minister Ahern reiterated Ireland’s position as one of strong support for a successful outcome in Hong Kong across the full DDA agenda.
Commissioner Mandelson confirmed to Minister Ahern that the EU would not be the ‘sole banker’ for the DDA Round. The EU would negotiate up to the level of the agreed reforms of the CAP to 2013. It was now time to cash in our CAP Reform ‘chips’ in return for better access for EU manufacturing and services firms, especially in emerging economies.
Speaking after the meeting Minister Ahern said:
“I was reassured by the responses of Commissioner Mandelson to my concerns. I will be reporting back to Cabinet on my meeting today and will reiterate Ireland’s position at a special meeting of the General Affairs and External Council next week in Luxembourg.”
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