EU, US framework for WTO negotiations

With just three weeks remaining until the Cancun meetings, the EU and the US yesterday presented a joint framework to relaunch agricultural negotiations. Focusing on three areas, domestic support, market access and export competition, the two largest trading powers have finally agreed that they need to develop a joint approach to the major issues dividing the WTO membership.

While making it clear that a number of other elements remain to be addressed, for each of the three pillars the paper provides an outline of how to carry the negotiations forward, while leaving the details, and in particular the extent of the future commitments, to be negotiated.

For domestic support, the paper provides for substantial cuts by all members who use trade distorting subsidies, recognising that those who subsidise more will have to reduce more, but ensuring that all make efforts.

For market access, there is a formula which takes on board both the formulas discussed to date (Uruguay Round and so-called 'Swiss' formula), while fully preserving the elements of flexibility and recognition of the existence of sensitive products.

In fact, recognising their importance to developing countries, flexibility and the recognition of the concept of sensitive products for reasons of development and food security are essential points in this paper, noted the Commission in a statement.

In addition, a special safeguard is envisaged for developing countries to protect sensitive products from excessive imports. The paper also provides for lower tariff cuts and longer implementation periods for these countries, while also recognising the importance of existing and future preferential access for developing countries. Finally, the Commission states that there is a firm commitment from developed countries to provide duty free access for a certain percentage of their imports from developing countries.

On export competition, the framework paper provides for several elements. Firstly, a clearly defined parallelism between the disciplines imposed on export subsidies refunds and exports credits. Secondly, it provides partial elimination of export subsidisation for a common list of products of interest for developing countries. Thirdly, it provides a path for parallel reduction of export subsidisation for the products that are not eliminated. In addition to that, the Commission says there will be clear discipline on food aid programs to prevent misuse as well as disciplines on the transaction of state trading enterprises.

Finally, the paper notes a number of elements not agreed, including non-trade concerns and GIs.

Commenting on the results of the negotiations, Agricultural Commissioner Franz Fischler​ said: "Our WTO partners called on us to show leadership and asked us to come up with something constructive. We have now delivered. Backed by sweeping farm policy reform, the EU is ready to lead by example and to find common ground."​

In turn Commissioner for Trade Pascal Lamy said: "This EC/US joint paper is just what is required to enable the WTO​ negotiations to change gear and move us into the final phase. The paper provides a solid and sustainable basis upon which to complete the agricultural negotiations which are, after all, the cornerstone to the Doha Development Agenda. Both the EU and US have committed themselves to concrete action in favour of DCs. Others must now do their bit to bring us down the home straight."​