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Glum Outcome On World Trade Meeting

  • June 22nd, 2007
  • Posted by EUEditor

ships-reduced.jpgThe so-called G4 meeting of major trading interests has ended early with no agreement or concessions that might have got world trade negotiations started once more.

BREAK-DOWN OVER DEMAND FOR A TWO-WAY DEAL

The meeting of Ministers from Brazil, the European Union, India and the United States broke down, with the Brazilian and Indian representatives saying they did not see any point in attending a planned final session.

European and United States delegates said they had made a case that both developed countries, and advanced developing countries like Brazil, India or China should cut tariffs on agricultural and industrial goods, and services.

They had argued that both groups of countries should also make concessions to poor countries without expecting anything in return.

Concessions they gave to the more advanced developing states, to let in more of their agricultural goods, should be matched by concessions to enable them to export more industrial products in return.

The idea of the G4 was to put together states that represented on one side interests of the developed world, and on the other, the large emerging economies.

The meeting this week, at Potsdam in Germany, was intended to find ways for making concessions, that could then cause a breakthrough in the Doha round multi-lateral trade negotiations organised by the World Trade Organisation (WTO).

Those talks reached a stalemate last year and there have been concerns that the stalled round, might have to be suspended for a period of years.

(It is a successor the long-running Uruguay round, which dismantled many barriers but did not liberalise farm trade).

The following are extracts from statements on Thursday (21.6.07) by the European Agriculture Commissioner, Marian Fischer Boel, and the Trade Commissioner, Peter Mandelson.

A “BAD DAY” SAYS THE TRADE COMMISSIONER

“This is a great disappointment; it’s a bad day for the multilateral system,” said Mrs Fischer Boel.

“We have worked very hard to get a deal and have shown willingness to squeeze the lemon to the last drop to obtain a balanced result among the G4 countries.

“If such a result had been obtained we would have opened major new market opportunities, in particular for the developing countries.

“Europe was prepared to cut our average farm tariffs by more than half…

“We were prepared to eliminate export subsidies by 2013 and cut trade distorting domestic farm subsidies by more 70%.

“Even for products that are sensitive for us like beef, new export possibilities the size of total Argentinean beef exports were on the table.

“Overall there were total opportunities on offer exceeding by 3 times those that were agreed in the Uruguay Round.

“We of course hope that the Geneva process can do better, but frankly I am not optimistic.

“So, historic opportunities have been lost today.

“Firstly … on market openings, those who risk losing the most were not present here today.

“Some believe that these opportunities can be recuperated through bilateral deals. I have to disappoint them. They are wrong. The EU will never be able to offer anything at the bilateral level of the order we were prepared to do at the multilateral level.
“We also have to prepare ourselves for the fact that we now risk to be living in a more uncertain world as far as agriculture is concerned.

“Secondly, we sincerely regret that we lost leverage on the direction in which US agricultural policies will develop over the coming years.

“Here in Potsdam we saw real possibilities to start a change of direction, and if the Doha Round fails, all constraints will have gone.

“This is bad for the EU and it is bad for the developing world.”

JUST “NEGOTIATING WITH OURSELVES” – MANDELSON

Mr Mandelson said progress had been made on some points, including agricultural market access and subsidies, export competition and export subsidies … along with “good substantive discussions on services”.

However settlement had not been reached on the “big numbers”, despite an EU proposal which he believed was “fair and forthcoming to developing countries” and “took to the limit what the EuropEan Union could do.”

“We have moved, moved, and moved again in the last year or so in different parts of the agricultural negotiation … but we cannot negotiate with ourselves, ” he said.

It remained totally unclear whether there would be comparable concession on the other side on industrial goods, “without which it would not be possible to find a reasonable trade off.”

“The developing countries – but only those in a position to do so – should make less effort and receive more than the developed countries.

“In the case of the poorest they should only receive from a successful trade round.

“While in Europe, we are prepared to pay a lot – and more than others – we cannot do so for next to nothing in return.

“I would have hoped that this would have not been the last word exchanged in the G4 meeting today, but …. the last plenary this afternoon did not happen as planned.

“I regret that ..

“Both the developed world and the fast growing competitive countries of the developing world must create trade-offs for the most needy.

“That means lowering tariffs in the developed world and proportionally, over time, reducing them in developing countries who are in a position to do so; something, incidentally, that will help spur their own economic reform and future growth,” Mr Mandelson said.

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