By IPS Correspondents
BRUSSELS, May 11 2004 (IPS)

What is being seen as a conditional offer by the EU to drop subsidies for agricultural exports has been conditionally welcomed by independent organisations.

The European Union (EU) has offered to drop subsidies on these exports if other countries like the United States, Canada and Australia do the same.

Oxfam urged other WTO members to follow the EU’s example.

"A genuine offer to eliminate all export subsidies would be cause for great celebration," said Jo Leadbeater, head of advocacy in Oxfam’s Brussels office. "The European Union must make this pledge a reality as soon as possible, and encourage the U.S. to follow suit."

Oxfam wants to see a definite date set for the elimination of export subsidies, she said. "This could give a real boost to the stalled WTO negotiations and be a big step towards making trade work for the poor."

The EU announcement, she said, "is proof that developing country assertiveness, backed by pressure from civil society, can have a significant impact."

But Oxfam said the EU offer must not be "conditional", and urged the bloc to proceed with the elimination of export subsidies even if progress from other countries is not as forthcoming.

"If the EU is serious about showing real leadership in a genuine development round, these concessionsàshould not require reciprocal action by the United States," Leadbeater said. "Such conditions must not be allowed to scupper what could be an enormous breakthrough for trade justice."

WWF, the international conservation organisation, says that "whatever happens" the EU should end export subsidies.

EU commissioners are saying that they would end export subsidies if the outcome of WTO negotiations is acceptable to the EU, head of the agriculture programme at WWF Elizabeth Guttenstein said in a statement. "The commissioners’ proposal to end export subsidies also falls short of making the CAP a green policy for the EU."

But the EU hopes the move will restart the stalled world trade talks and demonstrate its "absolute commitment" to the Doha Development Round.

EU trade commissioner Pascal Lamy and commissioner for agriculture Franz Fischler have written to members of the World Trade Organisation (WTO) with their proposal. But a final offer will depend on the willingness of other countries such as the United States, Canada and Australia to follow suit.

The European Commission, the EU executive, says concessions could include U.S. shipments of surpluses as food aid, boosting domestic prices, and cuts in U.S. export credits which let buyers defer payments with preferential financing and undercut foreign competition.

The EU offer was made ahead of a WTO meeting of trade ministers from some 30 countries due in Paris Thursday and Friday (May 13 and 14).

The bloc’s refusal until now to eliminate farm export subsidies has been a major obstacle in the Doha Development Round (DDR) which aims to reach agreements in such critical areas as agricultural trade, trade in services and industrial tariffs.

The EU spends some 51 billion dollars annually on farm subsidies.

Poorer nations have long complained that subsidies give farmers from more developed countries an unfair advantage by keeping prices artificially low.

WTO talks collapsed in Cancun, Mexico, last September mainly over the billions of dollars a year rich countries spend on farm subsidies.

Speaking to media representatives Monday (May 10), Lamy outlined three areas where the EU is ready to make further movement to kickstart the stalled trade talks – export subsidies, a package of concessions for the G-90 countries, the poorest and weakest of the WTO members, and the so-called ‘Singapore issues’ that cover trade facilitation, transparency in government procurement, cross-border investment and competition. The last three of these are likely to be removed from the WTO agenda – a long-standing demand of developing countries.

"The Doha Round is at the heart of the EU trade policy," Lamy said. The new move shows "we are ready to go the extra mile to ensure we conclude 50 percent of the round by 2004."

He called on other WTO members to match the "same level of ambition" so that the Doha Round can make "real progress" in July.

"If we are to succeed, we cannot do it alone," he added. "All WTO members, developed and developing alike, have to translate general expressions of political commitment into concrete movement on the substance if we want to get an agreement on modalities by July."

The negotiations under the WTO were launched in Doha in Qatar in 2001. They were scheduled to conclude this year, but are months behind schedule.

Speaking at a meeting of agriculture ministers in Killarney, Ireland, Fischler said the offer showed that the EU’s commitment to the Doha Round was more than words.

"Agriculture is key to its success, so we are ready to show flexibility," he said Monday. "Provided we get a balanced deal on market access, domestic support and non-trade concerns and strict parallelism on export competition, we are ready to put all the export subsidies on the table."

This meant that "our American, Australian or Canadian partners have to make clear that they will fully match the EU on the forms of export support they use, such as export credits, abuse of food aid or state trading enterprises," he added.

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