Sunday, August 03, 2008

What does Doha round collapse mean for CAP reform?

The Doha Round has effectively collapsed and if it is revived at all, it will be when a new US president is in office. However, US policy could take a protectionist turn while India, which has been a stumbling block in the negotiations anyway, may have an even less liberal government in power.

Trade has been the main driver of reform of the CAP. It played a key role in the MacSharry reforms and again in the 2003 reforms. In both cases wily farm commissioners (MacSharry and Fischler) used the international trade negotiations to broker needed reforms.

Now, not only have we lost the pressure from trade negotiations, the food security argument is being used to justify a reversion to protection and subsidy. The economic downturn has weakened the momentum behind pressures for a greening of the CAP.

However, it's not all bleak news. The opportunity cost of the CAP in terms of the EU budget remains considerable at a time when there is an imperative to invest in research and development to compete with emerging countries.

Greater transparency about CAP subsidies may also foster greater public pressure for change. In this respect the work being done by Jack Thurston and others to ensure that as much as information as possible becomes readily available on the internet is of crucial importance.

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