The Doha Development Agenda

EU tables new offer in Doha World Trade talks; calls for immediate movement on services and industrial goods
Brussels, 28 October 2005

Today the EU has tabled new proposals on agriculture and other areas of the DDA trade talks to its negotiating partners in the "Five Interested Parties" (FIPs). The European Union recognises that agricultural negotiations have now entered a critical phase and these proposals represent a comprehensive, substantive and credible contribution. The EU proposals bridge the different proposals tabled by other WTO Members. These proposals must unlock immediate progress in other areas of the Doha negotiations, particularly, trade in industrial products and services, which are crucial to the European economy. The EU proposals are fully conditional on satisfactory movement in other areas of the negotiation. The cuts offered are within the European Commission’s mandate.

The EU’s proposals will allow WTO Members to converge on the middle ground in agriculture negotiations. The cuts proposed go further than the EU’s original offer and significantly further than the cuts agreed in the Uruguay Round. More importantly, the average cut is higher and is more uniformly applied in the various levels of tariffs. In the Uruguay Round, the highest tariffs received the lowest cuts. The EU’s new proposal ensures that the higher the original tariff, the higher the reduction. The proposal is fully within the current negotiating mandate given to the Commission. However it is at the outer limit of that mandate.

EU Trade Commissioner Peter Mandelson said: "The EU’s offer is substantial, offering new market access in agriculture and driving down trade-distorting farm subsidies. We want to move in a way that is tolerable for the EU’s reforming agricultural sector, and does not eliminate the preferential access Europe already offers to some of the world’s poorest countries. Europe’s major partners need to understand that this offer is conditional on immediate movement in negotiations on trade in industrial goods and services as well as in other areas of the agricultural negotiation. These areas are important to Europe, and to developing countries and provide the only route to a balanced Doha outcome."

EU Agriculture Commissioner Mariann Fischer Boel said: "The EU has radically reformed its agricultural policy. Today’s new proposals on tariffs respect our commitment to offer substantial improvements in market access, without putting those reforms into question. This is a bold move which will mean big new challenges for EU farmers. 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 programmes, 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."

The Offer
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 our 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 (TRQs) 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 (LDCs)

The Conditionalities
EU proposals in market access are strictly conditional on further clarification from other developed countries on the elimination of their forms of export support. US commitments on Food Aid and Export Credits are not yet sufficient. Australia , Canada and New Zealand need to provide further commitment on the reform of their State Trading enterprises. The EU also seeks real disciplines on the most trade-distorting US farm payments (Counter Cyclical Payments).

The EU proposals are also strictly conditional on the acceptance by our negotiating partners of a number of proposals in the negotiating areas of the DDA outside of agriculture:

• In trade in industrial goods, the EU wants agreement before Hong Kong on a progressive formula that cuts into applied tariffs;

• In services, the EU wants to see negotiations complemented by ambitious mandatory country targets for services sectors to be liberalised - agreed at Hong Kong;

• An international register protecting Geographical Indications (GIs) in all WTO Member States.

• In WTO Rules negotiations, the EU wants the WTO to negotiate between now and Hong Kong a list of issues to be resolved including all major impediments to international trade created by abusive recourse to antidumping

• In development, the EU wants assurance that there will be a range of proposals ready for Hong Kong including a Trade Related Assistance package, and agreement that all developed countries should extend tariff and quota free access to all Least Developed Countries no later than the overall conclusion of the DDA.