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WTO-SPECIAL: EU Takes Offensive at Trade Talks
By Emad Mekay
HONG KONG, Dec 16 (IPS) - The European Union, under pressure to offer greater cuts in its farm subsidies at global trade talks here, has challenged its counterparts on a number of issues from food aid to tariffs to support for state-run commodity cartels. And the strategy is working.
While the United States, the other heavyweight player, has similarly refused to make substantial concessions on issues like market access for poor nations and farm subsidies, it has been getting higher scores on flexibility from developing countries and some non-governmental organisations (NGO).
"The EU has so many extreme offensive positions on the table at the moment. And presumably, the strategy is to put so much down partly because they have such huge ambitions, especially in services and industrial tariffs," said Dave Timms of the World Development Movement, a European NGO.
Chief among the EU's hardened positions here is its refusal to set a date for dismantling its multi-billion-dollar export subsidies. Many other countries, including the United States, Brazil and India, have said 2010 would be an acceptable deadline.
The face of the 25-member bloc, EU Trade Commissioner Peter Mandelson, an astute British negotiator, has said no dates will be set until other countries changed their export subsides first.
U.S. export credits and food aid have come under attack from the Europeans, who contend that both programmes are forms of support that violate World Trade Organisation (WTO) regulations.
U.S. officials say they have been bogged down by the issues. "One of our main interlocutors has stuck to a very hard position on food aid, that food aid should be provided only as cash," said a senior administration official referring to the EU. "We are running to the ground on food aid because of this intransigence."
EU officials are also sniping at New Zealand, Canada and Australia, demanding that all three nations discipline their support for their "state trading enterprises." The EU charges that those countries help their commodity companies win a dominant share of the global market through monopoly practices such as giving them exclusive export rights.
Developing countries, too, are expressing disappointment with the EU's aggressive bargaining at the Sixth Ministerial Meeting of the WTO here, which ends on Sunday. The EU has asked Brazil and India to slash their tariffs by more than 70 percent before it will cede to their requests for greater access to the EU market.
"Would the European Union be prepared to take a cut of 70 percent from their applied domestic support so that there is 'real' reduction in trade distorting support, which is a far more serious violation of free and fair trade, which they profess to preach?" asked India's minister for commerce and industry, Kamal Nath.
Some NGOs, while saying the United States is no less culpable, have accused the EU of backpedaling on promises made last year to remove its export subsidies.
"It is an outrage the Europe is backsliding on subsidies," said Adriano Campolina Soares of ActionAid America.
"If Peter Mandelson is unwilling to respect a commitment made last year, he is showing that the EU has no real intention of tackling poverty in poor countries. This does not bode well for the rest of the negotiations and shows that talk of this being a development round is a farce."
As isolated as it is becoming, the EU is getting what it wants. Smaller issues have dominated the debate here, nearly sweeping agriculture and farm subsidies off the table.
The United States came to the talks wanting the EU, Japan and developing countries to focus on agricultural trade and not single issues or sector-by-sector problems, a demand Washington is still making.
"I'd first of all suggest that in fact what is happening is that the entire round is being held hostage to a failure of our developed country partners to come forward with ambitious proposals in agriculture market access, which is what we need to close the round," said a senior U.S. official.
The poor countries' agenda included requests that both the EU and the United States eliminate their anti-dumping laws, non-tariff barriers and domestic subsidies, but all these issues remain unanswered.
One explanation for the Europeans' refusal to budge is that they have discounted the Hong Kong meeting, which aims to reach a global trade deal by 2006, and are seeking to shift blame onto the failure of others in dealing with the issues the EU put on the table.
This is especially true since the United States embarrassed the EU when it made a much publicised offer in September to cut U.S. farm subsidies by as much as 90 percent.
"A lot of it is directed at the Americans," said Timms of the World Development Movement, referring to the European positions.
"I think Europe feels it's been in the spotlight for a month, two months after the U.S. agriculture offer went down. (U.S. Trade Representative Robert) Portman quite successfully, even though there was nothing really of any significance in his offer, put the spotlight on the Europeans. It's just a way of making their intransigence look less objectionable." (END/2005)
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