The Likely Impact of CAP-Reform on EU Positions in Cancun

The June 26th 2003 EU Council Agreement on reform of the Common Agricultural Policy provides the basis for the EU’s negotiating position in the WTO Agreement on Agriculture negotiations. This paper looks at the outcome of the final CAP-reform agreement in the areas of: • decoupling and cross compliance; • modulation and rural development; • the major sectoral reforms agreed; • with reference to the initial European Commission proposals, the extent of the changes introduced in the final agreement, and the broad implications of these changes for EU positions in the WTO agricultural negotiations on export subsidies, market access and domestic support to agriculture. The paper then goes on to consider the implications for ACP countries in terms of the challenges this will generate at the Cancun WTO Ministerial. It concludes by proposing options for ACP governments to pursue at Cancun with the aim of maintaining some economic space for national and regional agricultural and agro-based industrial development, in the face of a reformed CAP and the liberalisation of agricultural markets that are implicit in the WTO process.A discussion pape