July 24, 2001
Geneva - At a Special Session meeting of the WTO Committee on Agriculture, held in Geneva this week, the European Union (EU) demonstrated its commitment to move the WTO agricultural negotiations forward, by tabling two further contributions on important topics under debate, namely export credits and food safety. In the debate on export credits, the EU recalled its willingness to negotiate further reductions on export subsidies, but only on condition that all forms of export competition measures are treated on an equal footing. An EU paper presented to the WTO Committee outlines how disciplines on export credits could be effectively incorporated into a new Agreement on Agriculture. On food safety, the EU makes the point that while there can be no compromise on food safety for consumers, there is a need for clarification of the precautionary principle to ensure its correct application, to avoid disguised protectionism and to minimise the risk of WTO disputes.
This special session is held under the work programme of the second phase of the negotiations to continue the reform process under Article 20 of the Uruguay Round Agreement on Agriculture (AoA).
Export Competition: achieving a balanced result
On export competition, David Roberts, the European Commission's chief negotiator at the WTO agriculture talks, said, "We must ensure a balanced result on export competition, which will need to address all forms of support to exports. Agricultural export subsidies are fully disciplined in the WTO, and are being reduced both in terms of expenditure and volume, while subsidised export credits can be increased and modified at will. This is not acceptable, and therefore export credits will need to be brought firmly into the next AoA, with appropriate disciplines matching those on export subsidies."
The EU pointed out that a recent independent study by the OECD concluded that the use of export credits distorts trade. The same study highlighted the fact that a major partner is responsible for 97% of export credits granted for periods longer than a year during the 1995-1998 period, backed up by government expenditure totalling $12.8 billion. It should be recalled that "commercial" export credits, which are not at issue, are generally extended for much shorted periods (often less than 6 months). The EU's paper lays out proposals to address this issue both from a quantitative as well as from a qualitative point of view, while bearing in mind the special needs of developing countries. On the latter point the paper recognises the need to address sudden and significant deterioration in a nation's economy, which could necessitate special credit terms, to be agreed following appropriate international co-ordination.
Food Safety a genuine societal concern, which should not be abused
"Consumers have the right to be assured that WTO rules will not be used to place onto the market food products on whose safety there are legitimate concerns," the EU negotiator explained. But he added that "concerns on food safety should not be abused, and used as a disguised means of trade protectionism." And this is not an issue restricted only to Europe or even to the developed world. "It is an issue which all members should have an interest in seeing addressed, and one which is already enshrined in the domestic legislation of many WTO members."
There is therefore a clear need for a clarification of the use of the precautionary principle, because on the one hand consumers have a right to expect a prudent approach when decisions on food safety are taken, while on the other there is a need for a clear definition to avoid abuse. The EU addresses this issue in its proposal, by making a number of suggestions, including the need to ensure that:
. any measure adopted should be proportionate and no more trade restrictive than required to achieve an appropriate level of protection;
. measures should not be discriminatory;
. measures should be consistent in the application of the level of protection members consider to be appropriate in different situations;
. the cost and benefit of action or lack of action should be examined considering less trade distortive measures;
. provisional measures could be maintained on certain conditions; and
. measures should be based on scientific evidence coming from qualified sources.
The EU's additional proposals can be found on the Internet: http://europa.eu.int/comm/agriculture/external/wto/officdoc/index_en.htm:
