EU Proposes WTO Trade Plan to Cut 60% of Domestic Support
Proposal represents middle ground from U.S. and developing countries' proposal for getting world trade talks back on track.
Compiled by staff
Published: Oct 28, 2005
Europe has proposed a 60% cut in its highest tariffs and a tariff cap of 100% that will put serious downward pressure on agricultural tariffs in the developed world. Although significant, the proposal is still less than the U.S. proposed 90% cut for Europe and the G20's call for 75% reduced subsidies.
EU Trade Commissioner Peter Mandelson says that its offer is the outer limit given by the European Commission and is conditional on immediate movement on negotiations on trade in industrial goods and services as well as in other areas of the agricultural negotiation.
Conditional on satisfactory movement in other areas, the EU offer proposes:
- A 60% reduction in the EU's highest tariffs. A range of tariff cuts between 35% and 60% for lower tariffs. A cut in average agriculture tariff of 46% - from 22.8% to 12.2%.
- A maximum agricultural tariff of 100% - as demanded by developing countries;
- A reduction in the number of sensitive products designated by the EU;
- Reductions in tariffs even for sensitive products - and wider Tariff Rate Quotas for all sensitive products - meaning more market access;
- A 70% reduction in trade distorting agricultural subsidies - as agreed in the EU's 2003 CAP reform, and tighter disciplines on Blue Box spending;
- The total elimination of all agricultural export support by an agreed date, if others discipline their export support;
- Differential treatment for developing countries: higher tariff bands, lower tariff cuts and a maximum tariff of 150%. No tariff cuts for the 50 Least Developed Countries
EU's support for moving forward calls for stricter disciplines on U.S. countercyclical payments, what it calls as the most trade-distorting U.S. farm payments. The European Union also wants further U.S. commitments on food aid and export credits. It also wants to have a full register of geographical indications in all WTO member states to protect its products known by their name. Europe also wants further reform for Australia, Canada and New Zealand's State Trading enterprises (wheat boards).
EU Agriculture Commissioner Mariann Fischer Boel called the proposal "a bold move which will mean big new challenges but also opportunities for EU farmers." She adds that, "We need to get something in return: real, meaningful reforms in other developed countries, international recognition of our Geographical Indications, real curbs on other countries' trade-distorting export programs, and far-reaching offers in other parts of the negotiation. The Doha Round is about much more than just agriculture and others must give as well as take."
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