Tuesday, June 20, 2006

Doha Round crisis

Crawford Falconer, chairman of the Doha agricultural trade negotiations, is to present a paper on Wednesday June 21st in an attempt to get a basis for agreement in the troubled Round. Apparently Falconer's proposals will be close to the compromise model put forward by the Brazilian-led G-20 group. On the biggest tariffs, their compromise proposal of 75% cuts is halfway between the EU offer of 60% and the US demand for 90%. G-20 also proposes a maximum tariff of 100% whereas the EU has ad valorem tariff rates substantially over 100% in several sectors.

However, it will be far from a conclusive document with options and lots of brackets. Nevertheless, his efforts and those of Canada, which has cast itself in the role of mediator, may not be enough. The ministerial meeting at the end of the month may not produce the hoped for outline settlement. The parties are digging their heels in and taking quite entrenched positions.

EU Farm Commissioner Mariann Fischer Boel has refused to confirm or deny rumours that the paper will be based on new figures given to Falconer by the Commission that go further than the EU's October proposal. Falconer's paper is, however, likely to be closer to the G-20 proposal than Brussels would want.

Opposition to what they would see as a sell out is buiilding among member states with the usual suspects involved. France, Italy, Greece, Poland, Ireland and Hungary are the countries most worried that the Commission is ready to sacrifice European agriculture for limited gains in areas such as services and industry. The UK and its liberal allies (Sweden, Denmark, Lithuania and Estonia) is backing the Commission's aim to get a deal in Geneva before the summer break.

Fischer Boel faces a real dilemma. She thinks that the EU still has 'some slight room for manoeuvre' within the negotiating mandate given it by the Council of Ministers, but an EU spokesperson admitted that the room for manoeuvre was 'not very large'.

It should also be remembered that there is a group of countries in which Japan and Switzerland are prominent that take an even harder line on market access issues. The Swiss have argued that if the idea of a tariff cap was dropped, there could be more flexibility in other areas of the negotiations. Canada has suggested that a cap could exist, but countries facing the biggest difficulty in complying could be given some leeway. This is a well intentioned idea but it is very vague in its present form and could drive a coach and horses through parts of any agreement.

Georgaphical indications

This remains a key issue for the EU because of its relationship to the strategy of developing high value added niche products in Europe. The EU and Switzerland, backed by accession states Bulgaria, Romania and Turkey, together with Kenya (with its horticulture sector), Morocco and Thailand, argue that the higher level of protection awarded to wines and spirits should, in the future, be extended to all agricultural products.

The EU has already won the battle to stop marketers using terms such as 'champagne' or 'port' for products which are not made in the specific region to which they relate, although success there was partly the consequence of direct agreement between wine producers in the EU and US. However, products such as 'Parma ham' can still use the name provided that their packaging states they are produced outside of the EU.

Little progress is being made on the issue with opposition to the EU's stance coming from countries as diverse as the US, Brazil and Taiwan.

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