EU Under Pressure to Set Date for Eliminating Farm Export Subsidies

Strategic Insights -

Pressure mounted on the European Union to agree on a firm date for eliminating farm export subsidies as World Trade Organisation ministers struggled to find ways to move the Doha trade round forward at the Hong Kong ministerial meeting. EU and US officials expressed disappointment over the lack of progress in agriculture negotiations, citing the need for the EU to improve its market access offer. The US and the Group of 20 developing countries emphasize the importance of breaking the deadlock in agriculture to make progress in the rest of the negotiations.

Key Takeaways:

  • The EU is under pressure to agree to a commitment to phase out all export subsidies by 2010, as proposed by the US and the G20.
  • The EU has already agreed in principle to end its export subsidies but is refusing to set a timetable until the US pledges to reform its farm export credits and food aid programmes.
  • The EU wants Canada and other countries to dismantle agricultural state trading monopolies before agreeing to improve its market access offer.
  • The US and the G20 argue that breaking the deadlock in agriculture is crucial to making progress in the rest of the negotiations.
  • The proposed package of trade and aid measures for poor countries includes increased technical assistance, removal of import duties and quotas, and measures to help West African cotton producers.
  • The US has offered to exempt West African cotton exports from trade restrictions, but Oxfam argues that this would have little impact, as West African cotton farmers do not export to the US and face a 2% tariff.
  • Discussions focused on ensuring that the duty- and quota-free plan covers as many products and poor countries as possible, with the US unlikely to apply to textiles imports from Bangladesh and Cambodia.

Statistics:

  • 2010: proposed date for the EU to phase out all export subsidies
  • 6 days: duration of the Hong Kong ministerial meeting
  • \$2 per cent: tariff faced by West African cotton producers in the US
  • 2 per cent: tariff faced by West African cotton producers in the US
  • 2010: proposed date for the EU to phase out all export subsidies
  • Hong Kong: location of the World Trade Organisation ministerial meeting

Sources:

  • "EU Under Pressure to Set Date for Eliminating Farm Export Subsidies" by Guy De Jonquieres and Frances Williams
  • World Trade Organisation
  • US Trade Representative (Rob Portman)
  • Brazilian Ministry of Foreign Affairs (Celso Amorim)
  • European Union
  • EU Agriculture Commissioner (Mariann Fischer Boel)
  • EU Trade Commissioner (Peter Mandelson)
  • Oxfam (Phil Bloomer)