BRIDGES Weekly Trade News Digest | Volume 3, No. 38
As BRIDGES Weekly Trade News Digest went to press, EU agriculture ministers were meeting to adopt a formal position for WTO agriculture talks.
EU Agriculture Commissioner Franz Fischler warned EU member states that the EU's Common Agriculture Policy would come under heavy attack in the WTO round, led by the Cairns Group of agriculture exporting countries and the U.S. EU farm ministers have thus far discussed a point-counterpoint approach to defending EU farm policy. The EU wants to put the U.S. - which frequently uses export subsidies, on the defensive, while also attacking state trading enterprises used in Cairns Group countries (e.g. Canada, Australia). EU farm ministers noted in discussions last week that the US$6 billion emergency aid money given recently to U.S. farmers is proof that a free-market approach to agriculture does not work.
Finland, which currently holds the EU rotating presidency, put forward a draft negotiating proposal calling for "discipline" on the use of export credits, and for alternative solutions to "less transparent forms" of export support such as state trading enterprises. Ministers are also expected to call for the preservation of so-called blue box subsidies. "Blue box" subsidies is the term commonly used to refer to the set of provisions (contained in Article 6.5 of the Agreement on Agriculture) which allows direct subsidies under production-limiting programmes - if they are based on fixed area and yields or a fixed number of head of livestock, or if they are made on 85 per cent or less of base level of production.
The draft proposal also calls on the multifunctional role of agriculture to be taken into account during negotiations. This reflects the EU position - supported by Japan, that the definition of Members' non-trade concerns (addressed under Article 20 of the WTO Agreement on Agriculture) be expanded to include issues such as economic viability of rural areas, preservation of landscapes and social cohesion. The draft proposal states that European agriculture "must be capable of maintaining the countryside, conserving nature and making a key contribution to the vitality of rural life". The draft calls for a balance between trade and non-trade issues within agriculture talks "intended to answer the legitimate concerns of the rural world and of consumers."
EU Agriculture ministers are expected to adopt a formal proposal this week.
In other news, numerous press reports last week quoted an internal European Commission memo noting that 17 separate EU risk-assessments underway on hormone treated beef are not likely to provide the scientific evidence needed to support an EU ban on hormone-treated beef imports. The memo states that scientific gaps exist in proving health risks from hormone-treated beef and that the 17 risk assessments underway will not bridge those gaps. The WTO Appellate Body in January 1998 ruled that the EU ban on beef treated with growth hormones was not based on adequate scientific evidence and so violates international trade rules. The U.S. and Canada brought the complaint to the WTO, estimating that U.S. and Canadian farmers lose a combined US$250 million a year from lost trade due to the ban. (See BRIDGES Weekly Trade News Digest Vol. 3, No. 6, 15 February 1999, http://www.ictsd.org/html/story3.15-02-99.htm)
According to one EU official, the information revealed in the memo does not change the official EU position on hormone-treated beef. "This all goes back to the precautionary principle. We believe the WTO Agreement on Sanitary and Phyto-Sanitary Measures (SPS) allows the ban on the basis that scientific gaps do exist." The official was referring to Article 5.7 of the SPS, which allows provisional measures to be adopted (in this case a ban on imports) when "relevant scientific evidence is not sufficient" provided such evidence could be provided within a reasonable (undefined) period of time.
"Ministers prepare to man barricades," FINANCIAL TIMES, 28 September 1999; "Europeans dig in to defend farm policies," FINANCIAL TIMES, 15 September 1999; "EU faces intense pressure from other trading blocs for further farm reforms," EUROPEAN VOICE, 16 September 1999; "EU defence of farm subsidies expected to shape WTO talks," WALL STREET JOURNAL, 15 September 1999; "EC internal document concedes proof is lacking on beef hormone allegations," INTERNATIONAL TRADE REPORTER, 22 September 1999; "EU studies on beef hormones won't support ban - document," DOW JONES, 22 September 1999.BRIDGES Weekly Trade News Digest:
