By IPS Correspondents
BRUSSELS, Nov 2 2005 (IPS)

Development groups say the latest EU offer on cutting tariffs and subsidies is inadequate.

The European Commission, the European Union (EU) executive, offered Friday (Oct. 28) to reduce its highest import duties on farm produce by 60 percent, and to cut its average agriculture tariff by 46 percent from 22.8 percent to 12.2 percent.

It also offered a 70 percent reduction in agriculture subsidies. The EU currently spends 64 billion euros (76.4 billion dollars) a year on domestic farm subsidies, officials say. The EU, Japan and the United States between them pay out more than 250 billion dollars a year to support their agriculture sectors.

Agriculture tariffs and subsidies are the main obstacles to a new international trade agreement. European Union (EU) tariffs on import of agricultural produce from developing countries raises the price of those products. At the same time, subsidies offered to European farmers artificially lower the price of European agriculture produce. This makes several agricultural goods from developing countries uncompetitive.

Developed nations have been slow to set amounts and dates for reduction of tariffs and subsidies in the trade negotiations known as the Doha Development Round, after Doha in Qatar where the talks started two years back. They are also demanding that developing countries open up their markets to industrial goods and services in exchange for any concessions on agriculture.

Trade ministers are due to meet in Hong Kong in December in an attempt to reach agreement on these issues.

But environment and development groups say the EU offer is not good enough. “The EU proposal is outrageous and serves big business rather than people and the environment,” Alexandra Wandel, trade programme coordinator with Friends of the Earth Europe told IPS. “The EU must stop making conditional offers, and refrain from forcing liberalisation of natural resources, manufactured goods and essential services on developing countries.”

Instead, the EU must “finally and unconditionally stop subsidised dumping that hurts farmers and livelihoods around the world, and ensure food security and sustainable agriculture instead,” she added.

Friends of the Earth Europe says the ten page EU document “fails to name an end date for the elimination of export subsidies, exempts European sensitive products from steep tariff cuts, and does not refer to exemptions for sensitive products and special safeguard measures that many developing countries demand.”

Christian Aid says the conditions the EU has attached to its offer on agriculture “make a mockery” of the promises made at Doha that this would be a development trade round.

“The EU is holding a gun to the head of poor countries in the WTO,” Claire Melamed, head of trade policy at Christian Aid said in a statement Monday. “Unless they agree to liberalise vital services they won’t get the agricultural reform that they have been long promised in the WTO. But if they do liberalise services they will be unable to guarantee their citizens access to the essential infrastructure – like transport, energy and banking, that make trade possible.”

The British-based international aid agency Oxfam said the EU offer provides “some hope” of unblocking world trade talks before the Hong Kong meeting, but warns that the fine print could make the deal meaningless for Europe’s trading partners, especially the poorest countries.

“The EU still refuses to define its sensitive products that it wants made exempt from tariff cuts,” Celine Charveriat, head of Oxfam’s Make Trade Fair campaign said Friday. “If these are the same products that are important to developing countries then this offer would quickly begin to lose its meaning.”

The EU offer has also failed to win consensus among the leading trading powers. The United States says the EU offer on cutting tariffs does not go far enough. This position was echoed Monday by the Cairns Group of 17 major food importers that includes Australia, Brazil, Canada and South Africa.

Agricultural subsidies have proved a bone of contention also among EU member states. France remains sceptical about the new package, repeating claims that the European Commission is acting outside the negotiating rules agreed to by member states.

Oxfam says the EU must remain united if talks are to advance. “If France breaks ranks – as it has done recently, wasting three crucial weeks in internal wrangling – then these WTO talks would finally seem doomed,” Charveriat said.

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