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EU Row “Disastrous” For Australia

  • July 3rd, 2008
  • Posted by 7thmin

sarkozy_officielle1.jpgOPINION: An open row between the powerful French President and the European Commission has posed a new threat to international trade deals where Australia has high stakes.
As Lee Duffield reports from Brussels, the new development has upset arrangements that the Australian government wants — and in Europe it has brought on a new political challenge to the existence of the European Union itself, in its present shape.

Nicolas Sarkozy, as President of the European Council, responsible for leading European Union policy debates for the next six months, has signalled that agriculture is one of his key priorities.

He may have been expected to promote new, and formally agreed European policies, that have seen a reduction in overall spending on farm supports, a change away from subsidies linked to production, and therefore less of a tendency to push subsidised goods onto world markets.

(In the most recent step towards full reform, the EU member states agreed this week to abolish compulsory set-asides, the arrangement for paying farmers to keep good land out of production; they’ll be encouraged to pursue good prices available now, but if they take the land out of production later they will not get money for doing it).

The Australian government welcomed European proposals to cut tariffs and other forms of agricultural support, in favour of demands for concessions by Australia and other farm exporters, in such areas as trade in services – like banking or information technology.

That was considered a promising start to Australia’s “new partnership” with Europe, pronounced by the Prime Minister, Kevin Rudd, last April.

It remains on the agenda for the start of a new session of trade talks, at Geneva, in just under three weeks, through the World Trade Organisation (WTO) – an effort to revive the struggling Doha Round of multilateral negotiations.


However that confident initiative has now been put under threat by statements from Mr Sarkozy, in his main role, as President of France, that he opposes new EU concessions on farm trade as they would cost French jobs.

He has added that the executive European Commission should not initiate policies, such as the negotiating stance on agriculture versus services, being put forward by the European Trade Commissioner, Peter Mandelson.

Instead, he thinks the Commission should defer to Ministers of national governments, when they get together as the European Council.


Mr Mandelson has now replied in media interviews (1.7.08), reiterating that his position was agreed on by all the EU countries.

He repeated a joint statement by the European Heads of Government, including Mr Sarkozy, last month (20.6.08), that a break-through in the world trade talks would be a “shot in the arm” for a lagging world economy.

The same expression — the “shot in the arm” — has been used by Australian Ministers supporting the trade negotiations.

“I have been undermined”, Mr Mandelson told BBC radio (2.7.08), in his rebuke to the French President.

Spokespersons for the European Commission joined in (1.7.08), at Brussels, pointing out to journalists that it was legally correct for the European Commission to plan the EU’s negotiating position on trade; and letting out more figures that show French farmers take the biggest share of the €42.7-billion ($A70.38-billion,, 2.7.08) European agricultural budget.


Australia has had long battles with Europe over its heavy support for agriculture, and over access to European markets, so recent concessions from Brussels were seen as encouraging.

One senior Australian official said the row brought on now by Mr Sarkozy’s statements would be “disastrous”; a new problem for Ministers from Australia going to the Geneva negotiations.


The dispute can be seen as part of a new political assault on the EU as it stands now, coming from the European right wing.

It began with the June summit of EU leaders at Brussels, where the recently elected Italian Prime Minister, Silvio Berlusconi, attacked the European Commission, saying it should do the bidding of Ministers form the 27 national governments.

The Commission President, Jose Manuel Barroso, replied, that his Commission had formal executive powers; it was not subordinated to the Council of Ministers, and was “not the secretariat of the Council”.

Now Mr Sarkozy, elected to national office himself just over one year ago, has come up with the same line as his conservative confrere from Rome.

Is this a field day coming on for right-of-centre European leaders — some younger and sophisticated, others more old fashioned and more peasant-like – all looking for some quick support from sections of the electorate?

The timing, is that it comes just as the EU has started to struggle, getting through its reorganisation law, the Lisbon Treaty.

All of the national governments need to ratify the treaty to put it into force; 19 have already agreed to that; but Ireland, the only state to put it to a popular vote, has said no.


That’s been seized on by Vaclav Klaus, President of the Czech Republic, a rightist dissident form the Velvet Revolution days.

He’s known for such positions as disputing the threat of climate change as a result of human activity, calling the idea an assault on the free market.

He has individually declared the Lisbon Treaty “dead” and wants a Czech court to over-rule his country’s ratification of it.

It’s been seized on also by Lech Kaczynski, President of Poland, best recognised in Brussels for objecting to EU human rights policy in conflict with his drive to punish homosexuality.

He’s from the Opposition party, and has now refused to sign the ratification bill passed by the government majority in parliament, saying that first he wants to see how things will go.

European news media have no trouble recognising a pig’s breakfast, enjoying, and retailing some of the revved up Euro-sceptic rhetoric.

For example, from the home of Euro-scepticism, England: the European Union has already been “thrown into further disarray”, (BBC World Service, 30.6.08, 20:00 GMT).


It may be a good time for politicians not given to a friendly understanding of the EU, to move in and try to get more power out of the situation for themselves.

The impasse over the Lisbon Treaty is expected everywhere to continue well into next year.

Leaders of the European Union itself have spelled out that they have law and legitimacy on their side, usually acting in support of unanimous decisions of the member countries.

They cannot see the authority of an executive, the Commission, given away to another body, the Ministers’ Council, without more treaties, and more politics – no matter how much authority some national politicians might want.

They have the agreement of all governments to keep on with the process of ratifying the Lisbon treaty – hoping they will find a settlement for Ireland on the way.

Even President Sarkozy of France, becoming ambiguous, has declared the EU cannot expand further in any shape, under its present treaty arrangements; and he has made commitments to help get the change put through.

The row this week may have the EU, to some minds, in “disarray”; but it may, as it has several times before, overcome its present obstacles and keep on with its own expansion.


European Commission, “Agriculture: Member States agree in principle to abolish obligatory set-aside”, 1.7.08, IP/08/1069

Picture: Caught between two flags: Nicolas Sarkozy, official photograph