Local view for "http://purl.org/linkedpolitics/eu/plenary/2006-09-05-Speech-2-011"

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". Mr President, I certainly share the desire of the Chairman of the Committee on International Trade that this very regrettable development in the negotiations should be a temporary halt, rather than an indefinite suspension. I welcome the fact that he and other Members of this House are meeting other parliamentarians from WTO member countries to review this matter. The more we can gain a broad understanding of what is at stake and what the problems are, and the more we can spread that knowledge amongst the players in the various WTO countries – rather than keeping this knowledge to a very tightly-knit circle of negotiators – then the better off we will be. I will certainly pursue that objective when I visit Washington DC later this month to meet with leading figures on the Hill. That deal will be hard to reach. I do not underestimate the difficulties that will arise in the negotiations we are yet to have with the advanced developing countries on industrial tariffs. However, it is the stand-off on agriculture, which represents only a fraction of trade for developing and developed countries alike, that is preventing the Doha negotiations from addressing trade in manufacturing and services, which is where the vast bulk of the potential economic gains from this round lie. We will only achieve closure on Doha if all the parties involved make the effort to sell an outcome on its merits across areas of the negotiations. These include not only agriculture and farm tariffs, but also manufacturing, services and rules. All sides should realise that a realistically ambitious and achievable outcome, far from being a ‘Doha-light’, would actually yield deep-seated structural changes in farm policies and create new trade flows in goods and services on a scale unmatched in any previous trade rounds. In other words, there is an awful lot already on the table, as Mr Lamy has repeatedly pointed out. What is being lost in a continued stalemate – let us be clear about this – is being lost first and foremost by developing countries. It is they who are losing new trade opportunities. Even more importantly, they risk losing out as a result of a weakening of the multilateral trading system. We on the EU side will try to do as much as we possibly can, in any scenario, for the weaker and more vulnerable developing countries, without seeking to divide the WTO membership. In particular, we will keep our promises on Aid for Trade, and we will maintain our efforts. Some will ask how it is that suspension of the DDA will affect our broader trade policy stance. The answer is that our commitment to Doha will remain paramount. Nothing can replace the WTO. Firstly, it is based on equality and the rule of law, rather than on raw power. Secondly, some benefits can only be achieved in a multilateral context, such as new disciplines on farm or fishery subsidies, a new agreement on trade facilitation, new disciplines for anti-dumping tools and better and clearer rules on regional trade agreements. These are examples of areas where any number of bilateral agreements could not even begin to achieve the sort of improvement and strengthening of trade rules and the trade system that we are seeking. Thirdly, these are the only form of negotiations in which smaller developing countries can punch their collective political weight. Finally, the dispute settlement system itself is one of the cornerstones of the WTO system and a feature unique in international law. There is no doubt that any erosion of confidence in the multilateral trading system as a whole would in the long term also critically affect that dispute settlement system. Bilateral and regional deals are therefore not an alternative to multilateral negotiations, but rather an add-on and a complement that helps to address in greater depth a reduction in tariff and non-tariff barriers, as well as establishing disciplines in areas in which WTO members have decided – at least for the time being – not to negotiate collectively within the multilateral system, be it in relation to competition rules, government procurement or the labour dimension. We are looking at several negotiations in this context. Some are already in progress, while others will be launched when the conditions are ripe. Mercosur, the GCC and Central America are in the first group and we are also looking at Ukraine, India, Korea and the ASEAN countries as potential partners for new initiatives. Let me conclude by saying that I and the Commission remain firmly committed to a successful outcome of the multilateral round and that I want to work closely with you in this House to achieve that goal. That remains my priority. The Commission will also shortly present soon two communications – one in October on external aspects of our competitiveness in Europe, and one on trade relations with China. These will tackle other key issues of our future trade policy. I am keen to discuss both of these with you in the coming weeks, and look forward to doing so. As a team I believe we should continue to work together in the future as well as we have done in the past – for Europe’s sake, but also for the benefit of the global economy and in particular for the most needy developing countries. The last time I discussed the Doha Development Agenda with some of the Members of this House was in Geneva in late June. First of all I would like to say how much I appreciated your presence there, your networking activities and the way in which you played an interesting and useful role among the negotiating parties. We will need your backing in the future in our efforts to convince our WTO partners to resume these negotiations, and I very strongly commend the approach taken by the Members of this House. At the end of the week I will travel to Rio de Janeiro at the invitation of the Government of Brazil and the G20 Group of developing countries. This will be the first chance to review at ministerial level what happened in Geneva in July, to discuss our respective positions and to assess the possibility of how and when we can move forward. In the weeks following the suspension, all sides have expressed a commitment to seeing the Round succeed. Nobody is saying, on the face of it at any rate, that they are no longer committed to it, and Doha certainly needs that level of commitment. In all our actions and statements we need to top up confidence in the Round and the process and to reassert the values of multilateralism and the economic benefits of a wide and ambitious deal. However, the rhetoric has to be matched with political leadership. What we are faced with is a lack of what one might call ‘realistic ambition’. All sides are exporting their domestic constraints into these negotiations. Perhaps that is inevitable, but it is not or should not be allowed to become an excuse for failure. Yet even in the most difficult and seemingly intractable areas of negotiation, the positions on agriculture are not that divergent. They are not so far apart that they are irreconcilable. They dictate that the EU lift its average tariff cut close to that requested by the G-20 developing countries. The EU signalled in Geneva that it was willing to negotiate on that as part of a balanced package – if others too are prepared to move forwards and show the same sort of flexibility we ourselves are demonstrating. If we are to move in the direction I have indicated we could, then in the right circumstances, this would represent a substantial shift from our original offer of a 39% average farm tariff cut, which is already much higher than the cuts accepted in the Uruguay Round. These would be the steepest farm tariff cuts ever accepted as part of a multilateral trade negotiation. Nobody could describe this as ‘Doha-light’. To these can be added the subsidy cuts flowing from EU reform, which would see EU producers withdraw dramatically from key global export markets such as milk and poultry, and the contraction of the EU grain market as demand for animal feed falls. If one puts all that together it amounts to a major new market access package for competitive agricultural exporters such as the United States, Australia and other members of the Cairns Group. It would potentially downsize European agriculture by up to USD 20 billion per year. To dismiss this as insignificant, as some have done, is either a crude negotiating posture or a failure to do the necessary maths. In return for those cuts, the EU is looking to the United States to match it in cutting trade-distorting farm subsidies, which the developing world now rightly regards as the condition and catalyst for any final Doha agreement. The United States has offered significant cuts in the so-called ‘amber box’ trade-distorting subsidies, from USD 19.1 billion down to USD 7.6 billion. This sounds good, and is to be welcomed. However, the United States has also proposed an increase in what it is allowed to spend in other categories of trade-distorting subsidy, while rejecting the idea of directly reforming those subsidy programmes so as to ensure that they no longer distort trade. If one adds together the three types of proposed trade-distorting support that the United States wants to keep, one actually arrives at a potential new ceiling of USD 22.7 billion, which is more than the United States currently spends. In other words, by the end of the Doha implementation period, US trade-distorting payments to farmers could actually go up as a result of what the US tabled in its offer last October. It is understandable that the US’s trading partners have found that unacceptable, especially given the sweeping cuts that the US is demanding from others, in terms both of subsidies and tariffs. Quite rightly, developing countries are insisting on an effective reduction in US subsidies, and the EU supports that. Unless there is a shift in the US position, advanced developing countries such as Brazil and India will not be prepared to offer greater access to their markets for industrial goods and services, and that is the crux of the eventual deal we are seeking."@en1

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