Europe’s revised offer on agriculture ‘inadequate’

The EC Commission’s offer increases the cut in import duties in the higher ranges, offers a smaller variable cut in import duties in the lower ranges and reserves approximately 180 tariff lines for ‘sensitive’ product treatment (up to 8% of all agricultural tariff lines). The USA has called the offer ‘disappointing’; a nuanced reaction which I interpret as designed to allow the two sides to continue to wrangle—between themselves and with the G-20 and others—beyond Hong Kong.

The EC has provided more detail, too, on it’s complex and restrictive proposals for handling the expansion of tariff quotas.

I have modified the quick-comparison charts of the main offers to reflect the ‘headline’ numbers in the new EC offer. Click this thumb:

I have also obtained the full EC proposal, which you can download as a PDF file (about 120k) here.

The USA calculates that the new EC offer amounts to a 39 percent average cut in tariffs—as opposed to the 54 percent proposed by the G-20 group of developing countries—and has ‘too many strings attached’.

This rejection of the EC offer is not as hard-edged as it might have been. The reaction from the spokesperson from the US Trade Representative’s office was:

“From our early analysis, we are disappointed with the new EU proposal. While in some ways it is a step in the right direction and we acknowledge the EC’s efforts, much more needs to be done.  First, the proposed tariff reductions are lower than proposals from the G-20 developing countries and far lower than the U.S. proposal.  As concerning, the large number of exceptions for so-called sensitive products apparently has not changed from earlier EU proposals, and another element – the ‘pivot’ – actually walks back from their last proposal.  Both of these elements would allow substantial loopholes to the relatively lower tariff cuts the EU has offered.  If the final Doha agreement on agriculture were to go no further than this, other areas would also be weak and the Doha Round would not approach its potential for promoting development, opportunity and global economic growth.”

In other words: this is better, but still not good enough. This sort of language signals that the USA wants to take this debate on through the Hong Kong Ministerial conference (of course).

More analysis to follow.

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