EU digs in heels on farm tariffs

The European Union’s (EU’s) refusal to make further cuts to agricultural tariffs would harden attitudes ahead of next month’s global trade talks in Hong Kong, China, local trade experts said yesterday.

EU trade commissioner Peter Mandelson recently told the European parliament that the 25-nation bloc would not be making any more agricultural tariff cuts to further open up the European market.

Mandelson’s statement came in response to demands by the US and developing countries, including SA, for deeper tariff cuts. Mandelson last month made the proposal to the World Trade Organisation (WTO), which he said would lead to tariff cuts of about 46%.

Mandelson said the EU was prepared to negotiate on which goods should be classified as “sensitive” and subjected to lesser agricultural cuts. “All these things are for discussion with our partners,” he said.

An agreement on agriculture is seen as vital to getting the global talks back on track.
SA’s chief trade negotiator, Xavier Carim, said last week it was crucial that the EU made further concessions in its agricultural policy.

South African Institute of International Affairs research fellow Peter Draper and Riaan de Lange of consultancy Tariff and Trade Solutions said yesterday the EU’s stance would harden the attitudes of the countries that have been calling for more cuts.

De Lange said Mandelson’s statement was expected “if one looks at the importance of agriculture to several European countries”.

In the last-minute horse-trading ahead of the Hong Kong talks, the EU has reportedly come under pressure from heavy subsidisers such as France not to make more concessions.

He said the bloc’s refusal to make further cuts would be a blow to many poor countries, especially those in Africa, which rely heavily on agricultural exports.

The EU is a key market for South African farm products such as fruit, fruit juice, ostrich meat and cut flowers, De Lange said.

Draper said: “These kinds of attitudes can even put the current Doha development round in jeopardy.”

“Notwithstanding his current hard-line stance, I doubt if Mandelson will go to the Hong Kong ministerial meeting and expect not to make concessions. If that is the attitude he will take at the meeting, then we might see the repeat of what happened in Cancun.”

He was referring to the 2003 WTO talks in Cancun, Mexico, which ended in chaos after developing and developed countries differed sharply on a range of matters, including agriculture.

Source: Siseko Njobeni EU digs in heels on farm tariffs Business Day, 24 November 2005

For text: http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A117683

FMF Policy Bulletin/ 29 November 2005