An EU/US agreement should include developing countries

Following meetings with US trade representative Robert Zoellick and US Agriculture Secretary Ann Veneman on July 28th 2003 EU Agricultural Commissioner Franz Fischler called for the EU and US to 'engage in some imaginative long-range thinking' in order to address the needs of farmers and consumers. He argued that any EU/US agreement must treat developing countries fairly, since any agreement requires all WTO members to come on board. Commissioner Fischler however maintained that Europe was now 'ready to make the necessary concessions and sacrifices but that other trading partners will need to show willingness and flexibility as well. Comment: Commissioner Fischler argued that CAP reform was allowing the EU to pursue further multilateral tariff liberalisation. This is indeed the case. However, tariff liberalisation is only one element in the process of establishing free trade in agricultural products. An increasingly important dimension relates to production and the consequent trade-distorting effects of publicly funded agricultural aid programmes. Until this issue is comprehensively addressed in all its dimensions, there can be no free trade in agricultural products, and developing countries like those in the ACP will be unable to benefit from their comparative advantage. While the Commissioner correctly maintains that CAP reform has allowed the EU to cut back on trade-distorting forms of domestic support, this is purely a matter of definition. The reality is that the decoupled farm payment scheme allows an expansion of EU production even in the face of dramatic price reductions (for example, up to a 41% reduction in the market price for rice in the EU). In these circumstances it is difficult to see how the EU can sustain the contention that the new forms of decoupled farm support are not trade distorting. Rather it could be argued that they are more efficient in budgetary terms in sustaining and generating distortion.Following meetings with US trade representative Robert Zoellick..