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Tuesday, 9th February 2010

Mariann Fischer Boel: Farming talks a feather in the cap of the EU

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Published Date: 06 August 2008
THE collapse of the recent ministerial meeting in the Doha Round of world trade talks was one of those occasions when most politicians want to keep out of the headlines.
But the low profile of the EU in the blast of news coverage which followed the breakdown is particularly significant. It marks a sea change in international trade politics.

Certainly, headlines about the Doha Round have not been in short supply in
recent days. Quite rightly, the failure of the ministerial meeting
was a serious defeat for trade and for international development. Ministers from developing countries recognised this all too clearly, even if many development organisations did not.

Nevertheless, as I was packing my suitcase for the flight home, I felt encouraged by the role which the EU had played in the agricultural discussions.

If I was not taking a large share of the headlines, this was not thanks to a political vanishing act. It was because, in marked contrast to previous trade rounds, no-one was laying the collapse of the talks at the door of the EU. More than that, the EU had energetically urged the
talks forward.

This transformation of its role in World Trade Organisation negotiations is due in large measure to reforms of the Common Agricultural Policy.

In the EU, helping farmers used to mean primarily supporting farm prices. To keep prices high, we spent large sums of public money on buying up unwanted produce and on subsidising exports.

This approach was valid in its time, but it ran out of control. When it did so, it insulated farmers from market signals, fuelled over-production and placed stress on the environment – all at financial cost.

There was also a cost in terms of international trade relations. The EU seemed to be so often on the defensive; so often protecting its right to support its farm sector in ways that the WTO considered to be trade-distorting; so often a target for criticism from its partners.

The CAP has now moved on – dramatically. Following successive reforms, the vast majority of support paid to EU farmers now comes in the form of direct payments which are "decoupled" from production (and linked to high standards of environmental care, animal welfare and public health).

Decoupled payments leave farmers free to base production decisions on the market, and, therefore, do not distort trade under WTO rules. By shifting the emphasis of the CAP away from market management and towards decoupled payments, the EU has given itself room to accept much tighter WTO disciplines on its farm sector.

This has been plain for all to see in the Doha Round. We have offered to cut our ceiling on "overall trade-distorting domestic support" for agriculture by a huge 80 per cent.

We have offered to slash agricultural import tariffs by an average of 54 per cent. And we have offered to put an end to agricultural export refunds – for so long the bête noire of development organisations – by 2013. This package would have spelt enormous gains for developing countries.

Thanks to this offer, as well as the room for manoeuvre which made it possible, the EU is no longer a "bad pupil" in multilateral trade talks: it is a highly valued partner.

We have been approaching the Doha Round in a very positive frame of mind – looking for possible gains instead of staying defensively on the back foot. In the closing stages of the most recent discussions, we were even invited to be an honest broker between other large WTO members which were struggling to resolve their differences.

The future of the Doha Round is not clear at this stage. What is clear is that we must continue to bolster the multilateral trading system; only then will the benefits of trade be shared between the strong and the less strong.

As we decide the best way forward, the EU will continue its domestic work of forging the CAP into a policy tool for the 21st century: one which addresses public concerns about a safe and secure food supply, competitive farming, care for the environment, and vibrant rural areas. This autumn, we expect agreement on the next stage of the process – the so-called CAP Health Check.

Whatever the next decade may hold for the CAP, I am confident of this: the days are over in which the CAP acted as a brake on international trade talks. As it showed last month in Geneva, the EU now has its foot firmly on the accelerator.

Mariann Fischer Boel is the European Commissioner for Agriculture and Rural Development.



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  • Last Updated: 06 August 2008 8:52 AM
  • Source: n/a
  • Location: Yorkshire
 
 

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