The European Union has launched a twin attack at the new round of negotiations to liberalise the global trade of food and drink, tabling a series of papers, as part of this year’s discussions to set the ground rules for detailed negotiations from next March.
They reveal that the EU is preparing to fight hard to protect the subsidies paid to its food exporters and farmers, by forging a broad coalition with poorer developing countries, along with its traditional allies Japan, South Korea and the EFTA countries. And they also underline that the European Commission is prepared to attack export systems used by its free trade opponents at the WTO as being unfair, to deflect criticism of its own export supports.
Brussels wants to forge a common EU-developing country agreement on ground rules for next year’s detailed horse-trading on the amount of grants, privileges and loans that governments will be able to make available to their food industries, without being taken to a WTO disputes panel for exporting cheap over-subsidised food. Assistance that will be debated includes help on conservation matters, the environment, animal welfare, food security, economic development generally and rural development in particular.
It is a key principle of the WTO that goods traded on the world market should not be sold cut price because of government subsidies, but at the last Uruguay Round of the WTO, it was agreed that subsequent agreements should give governments some leeway to spend on so-called non-trade concerns.
The big question is how many policy areas should be covered by this exemption. An EU-developing country-EFTA-east Asian government conference held this summer in Norway reached agreement, saying that they should include “strengthening the socio-economic viability and development of rural areas, food security and environmental protection, and promoting the co-existence of various types of agriculture” with “special and differential treatment to developing and least-developed countries.”
This was a barely hidden attack on the position of the Cairns Group of food exporters, (such as New Zealand, Australia, Canada and Argentina), and the USA, who have attacked the EU for spending widely on agricultural subsidies.
These attacks could be seriously undermined if developing countries agree that the WTO talks should treat subsidies paid to their poor farmers in the same way as EU helps free range and organic food producers.
Brussels could paint an attack by Washington on non-trade spending as an assault on the rights of poor developing countries to sustain their farmers.
The Commission’s second sortie has pinpointed tactics used by the US and the Cairns Group to sell their foodstuffs, hoping to identify them as being unfair and so introducing them as a topic for debates in the round. In that instance, they would become an asset that the EU’s opponents would have to defend, forcing them to accept Brussels’ export subsidies as a trade off.
As a result, another paper sent to the latest WTO round meeting by the EU attacked the use of export credits, (a widespread US practice), and of state owned trading corporations, (popular in the Cairns Group), creating targets for European diplomats to hit next year.
By Keith Nuthall