Doha Development Agenda - Remarks by EU Trade Commissioner Mandelson at a Civil Society Dialogue Meeting

Sommaire: 23 June 2008, Brussels - Remarks on the state of play in the Doha Development Agenda at Civil Society Dialogue Meeting

EU Trade Commissioner Peter Mandelson has today warned a meeting of Civil Society that if the current round of world trade talks did not succeed, the loss of the benefits to the world economy would be profound. The status quo in the global economy would not be maintained if DDA negotiations collapsed, as we would risk rising protectionism and increased tariffs in developed and developing countries. The poorest countries would stand to lose the most, as they are most dependent on access to other developing and larger markets. But the EU would also suffer, as lost trade opportunities amounting to billions of Euros per year could be lost. Mandelson argued that prosperity in Europe is down to business certainty, tariff predictability, economic stability, and, crucially, access to fast-growing markets. In the event of a DDA failure, Europe would be less able to anchor these growing markets in the rules-based trading system.

Commenting on the ongoing negotiations in Geneva, Mandelson noted that the talks are at an advanced stage, with an 'ambitious but balanced' offer on the table from the EU. However, Mandelson argued that the offer will only work if 'commensurate effort' is made in other areas of the negotiations, notably on industrial goods market access (NAMA). On those negotiations, Mandelson notes: "What is very clear to me and to the Member States is that, in NAMA, consolidation of existing openness by the large emerging economies, while important ... will not be enough. We must see some additional new market access. All must contribute some kind of fair share - a fair share which reflects the efforts made in other areas of the negotiation, and a fair share which reflects the developmental status of the country concerned, and the nature of their present tariff structure."

On the next steps, Mandelson notes: "Overall, only in the next stage of negotiation which lies ahead of us, will we be clear whether enough is being delivered to satisfy all parties for the Round to go ahead on the basis of the agriculture and non-agriculture modalities….I hope we will now see senior officials reducing the number of remaining issues to be tackled by Ministers, notably in agriculture and NAMA, to something manageable." Mandelson also noted that other areas of negotiations needed to make progress, including Non-Tariff Barriers (NTBs), services, Geographical Indications (GIs), rules, trade & environment and trade facilitation.

Remarks by Peter Mandelson

The situation we face in the DDA is one of uncertainty - breakdown and breakthrough both remain equally feasible. This concerns us all, because the benefits of a DDA outcome - for the developing world, for the EU and for the world economy - would I believe be positive, and their loss would be profound.

There are some who seem to believe that failure could be shrugged off. We should not delude ourselves that there is some safe status quo option where nothing changes if the negotiations collapse. Failure would open the door to greater protectionism. Instead of succeeding in consolidating the existing openness of the world economy, and creating new market access, we would be exposing ourselves to the risk of rising tariffs in the future, as governments in the developed and developing world give way to populist pressures. If Doha fails, the international trading system would be powerless to withstand this negative trend, which is already emerging.

The biggest losers, I fear, would be the world's poorest countries - they are those most dependent on access to other developing and larger markets. They are those who suffer most from their lack of integration into the world economy. And they are those for whom a good package is now potentially on the table covering a number of key and legitimate concerns - cotton, farm subsidy disciplines, preference erosion, OECD duty free quota free and so the list goes on. The package for the world's poorest countries is very significant and I welcome this and I am proud of the part the EU has played in putting it together.

But the bigger players, including the EU, would also lose if we fail.

Though we are somewhat more sheltered from global economic protectionism, because of the internal market, a "no DDA" scenario means lost trade opportunities amounting to billions of Euros per year, depending on the economic model you look at. And it means a weakened WTO whose open, non-discriminatory trading system is the fundamental platform on which our exporters trade into often difficult markets. We forget much too easily that tomorrow's prosperity in Europe is down to business certainty, tariff predictability, economic stability, and, crucially, access to fast-growing markets. In the event of failure, we would be less able to anchor these growing markets in the rules-based trading system. And Europe would be damaged across the board, not only in industrial goods and services but also in agriculture where we have become net exporters in processed farm goods and where our farm communities need the certainty of negotiated agreement on farm support programmes.

Within the current Geneva negotiation, the fundamental issue today is the balance between agriculture, where the CAP tariff and subsidy regime means that the EU is more defensive, and industry, where the EU is well placed in many sectors to build up its international presence.

In agriculture, the negotiation is at a very advanced stage. On the key issues for Europe, of the Green Box and on Sensitive Products, the outlines of an acceptable solution are now visible. We have, at this stage, defended our bottom lines. Nonetheless change for some of our agriculture sectors is inevitable, as foreseen by our original 2003 CAP reform and additional farm tariff adjustments.

But we have worked very hard to make sure that these concessions remain within boundaries where that transformation and change can be managed gradually, so that individual farmers can be fully helped where there is difficulty.

There remain a number of very detailed points in agriculture which we must still secure:

o Green Box language needs further work, as do the proposals on sub allocation of tariff rate quotas.

o We are in intense discussions on tropical products with Latin American countries in particular, and will also need to find the right balance in terms of preference erosion for the ACP.

o On cotton I hope the ACP will show understanding of the very significant reform efforts we have already made. We have gone a long way, and it is now clear that what residual subsidies we still have only affect the international market very marginally. The problem for cotton comes from other major trading partners, not from the EU. What I cannot do is alter accession commitments taken by the EU for certain of its Member States.

There are also some big farm issues left on the table which will necessarily be for Ministers alone to solve. These include the US cap for trade distorting farm support - we having delivered ours; and the degree to which emerging economies will be granted flexibility to protect particular farm sectors (Special Products and SSM). The EU is not the main player in these discussions.

Overall, the agricultural offer made by Europe is ambitious but balanced. I know that for some, they are too much; likewise, for many developing countries, plus the world's agricultural exporters, they are too little. I think this gives a pretty good indication that it is a well calibrated offer which will fly only if there is a commensurate effort made in other non-agricultural sectors of the negotiation. First and foremost in industrial goods, but we will also need to see the outcome in services, rules and GIs.

The new NAMA text that came out mid-May is not clear cut. The Chair has sought to craft something wide enough to keep all the Green Room partners round the negotiating table. As a result, the NAMA parameters under negotiation are still too wide and too numerous for us to assess the real value of what is on the table. A reasonable result is there for the taking, but the final economic value for Europe is still up in the air.

What is very clear to me and to the Member States is that, in NAMA, consolidation of existing openness by the large emerging economies, while important as I argued at the outset, will not be enough. We must see some additional new market access. All must contribute some kind of fair share - a fair share which reflects the efforts made in other areas of the negotiation, and a fair share which reflects the developmental status of the country concerned, and the nature of their present tariff structure.

Developing countries are receiving significant flexibilities and exclusions, and small, vulnerable and less developed countries even more so. The OECD countries have no such latitude. But there must be limits to this - "less than full reciprocity" for developing countries is the right principle but it must still mean some reciprocity. For example, it would be wrong for whole product sectors to be carved out from tariff cuts by the competitive developing countries. So a meaningful anti-concentration clause, within flexibilities, is essential. Sectorals are also a useful way of finding the right balance within NAMA, providing that the overall tariff cutting formula remains sound.

The treatment of Recently Acceded WTO Members such as China, which has benefited considerably from its accession to the WTO and will benefit further from a positive DDA outcome, is also very sensitive. I hope that China will reflect on this so that we can move this part of the negotiation to a conclusion.

Overall, only in the next stage of negotiation which lies ahead of us, will we be clear whether enough is being delivered to satisfy all parties for the Round to go ahead on the basis of the agriculture and non-agriculture modalities.

We will also need a substantial outcome across the other silos of this negotiation - including NTBs, services, GI's, rules, trade & environment and trade facilitation. There is substantial economic value for Europe in these areas. In each, our partners are clear on the "must haves" for Europe if we are able to sign up to a final package.

Meaningful services offers must be part of the single undertaking and we need signals of commitment to a substantive outcome on GIs, with some extension of protection to all products and a GIs register with greater legal effects.

If we deliver on all this, the macro figures show we can give to our own economy, as well as globally, the very significant boost it surely needs in the current climate and in the increasingly difficult and competitive years to come.

I hope we will now see senior officials reducing the number of remaining issues to be tackled by Ministers, notably in agriculture and NAMA, to something manageable. Their capacity to do so is a litmus test of the seriousness of every partner in this negotiation to securing its completion. If they do so, the responsibility will rest with Ministers to bridge the final divides and I'm in no doubt that Pascal Lamy will push us all very hard.

There is always a risk of negotiating failure at such a Ministerial before the summer. But the risk of political failure, if this drifts beyond the summer, is greater. The American political calendar is not helping us so we must press ahead now so that all the WTO Member countries can take their responsibilities. In Europe, we shall continue to take ours, and work for a conclusion, but this must be at a price that is fair for all. Success is neither inevitable nor impossible. It will require huge effort and flexibility by all to achieve the result, in particular developing countries, the world badly needs.

Ref: EC08-141EN
Source UE: Commission Européenne
UN forum:
Date: 23/6/2008

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