EP - Breakthrough in WTO negotiations - what next

Trade Commissioner Pascal LAMY, addressing Parliament's Trade Committee for possibly the last time on Tuesday, outlined the main aspects of the recent WTO framework agreed in Geneva. The text sets the parameters of a future trade package in five key areas: agriculture, industrial products, development issues, trade facilitation, and services.

The Commissioner stated that there would be a "substantial reduction in the authorised trade-distorting subsidies for agricultural products as well as the eventual abolition of export subsidies". On cotton, the Commissioner underlined that the EU had already abolished all export subsidies and tariffs for cotton and had undertaken a fundamental reform of its cotton subsidies eliminating the most trade-distorting support. The US, he said, would now have to follow suit and had made the commitment to do so in Geneva.

The Commissioner also sketched out the latest developments in the EU-Mercosur trade agreement. He stated that the two sides were aiming "for an ambitious agreement that would go beyond normal WTO parameters". Mercosur, he said, was calling for greater market access to the EU but what it offered in return was currently "not enough".

The Commissioner also stated that Commission hoped to have a proposal on the table by the end of this year on the reform of the GSP (Generalised System of Preferences) which would mean reform starting on 1 January 2006. The proposal, he said, would aim to simplify the current system and would lead to the least developed countries gaining better trading conditions. On textiles, Mr. Lamy reminded MEPs that the quota system would end this year. The Commission, as a consequence, would introduce market surveillance measures aimed at monitoring the impact of the ending of quota system. The Commissioner was particularly concerned about possible loss of income for Bangladesh, where insufficient textile manufacturing capacity could mean capacity being transferred to China.

In the debate that followed, Robert STURDY (EPP-ED, UK) asked what the US would do in terms of reforming its cotton and agriculture subsidies. Commissioner Lamy confirmed that the US would have to stick its commitments made in Geneva and reduce subsidies over time. Caroline LUCAS (Greens/EFA, UK) asked the Commissioner to comment on how transparency could be increased in WTO negotiations and also asked him to give a specific date for the abolition of export subsidies. On transparency, Mr. Lamy said that those who gained from the WTO negotiations tended to believe the procedures were sufficiently transparent while those who lost did not. He could not give a specific date for the abolition of export subsidies but recalled there would be a 20% reduction in agricultural subsidies across the board in the first year following the completion of the round. Vittorio Emanuele AGNOLETTO (GUE/NGL, IT) questioned the Commissioner on dumping of excess food supplies on developing countries. Mr. Lamy responded that a specific agreement had been reached in Geneva to outlaw this practice.

31.08.2004 Committee on International Trade

In the chair: Enrique BARÓN CRESPO (PES, ES)

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