The back-story to the Commission’s offer[⇒ related story] to eliminate agricultural export subsidies is starting to emerge. It seems that, in typical fashion, the Commission made an offer that—if it did not actually exceed its mandate—leaned some distance forward of the consensusof Member states. bq. The letter[⇒ related story] drafted by Lamy and Fischler was discussed by EU trade officials on 7 May. Reportedly, France, Ireland, Belgium, and Hungary argued at the meeting that the Commission lacked the mandate to negotiate a date for eliminating export subsidies. Germany, the UK, Denmark, Sweden, Finland and the Netherlands all supported the initiative. France’s agriculture minister Herve Gaymard, at a separate occasion, stressed that the Commission had overstepped its mandate, and called the initiative dangerous. He said it “signals a degree of flexibility even though none of our other trading partners show any signs of flexibility”. Farm groups in France also voiced strong opposition. Jean-Michel Lemetayer, of FNSEA, the largest farm union in France, said “We refuse to allow agriculture to be the bargaining chip in international negotiations… They have no right to sell off agriculture”. Trade sources indicated, however, that it would be very difficult for the EC to withdraw its offer at this point. (“ICTSD”:http://www.ictsd.org/weekly/04–05-13/story1.htm) So Pascal Lamy, the EU trade commissioner has taken a calculated risk. He showed in the closing hours[⇒ related story] of the Cancún Ministerial meeting that he is prepared to maneuver Member States of the EU into a squeeze play. On that occasion securing, at the last minute by phone, their agreement to dump a hard-line but iconic position on investment and competition policy negotiations. He is probably counting on a positive reaction from the rest of the world to make it impossible for the Community to climb down from this offer. His colleague, the agriculture commissioner, Franz Fischler is going with him. Fischler knows only too well that he needs the external pressure of the Doha negotiations—moving ahead, not stuck in arid diplomatic debate—to keep internal reform of the Common Agricultural Policy (CAP) more or less on track. In an editorial today, “Agence Europe”:http://www.agenceurope.com/, a newsletter whose French Language edition is the mouthpiece of chauvinism in European agriculture, “calls”:ttp://www.agenceurope.com/Daily/ADI_EN.html the proposal a “brave wager by the two European Commissioners” The leader writer on balance approves the offer but warns that Europe can not make a similar concession on market access where it has the ‘interests of the poorest countries’ to protect. By this he means that the preference margins that countries—chiefly ex-European colonies in Africa—enjoy in the EU market would be eroded by cuts to high EU protection against imports of e.g. fruit, vegetables, oilseeds, dairy etc etc from the rest of the world. I recently heard a Kenyan trade official describe this as the ‘handkerchief argument’. “They slap you in the face.”, she said. “Then they hand you a handkerchief to wipe your tears away … and they expect you to be grateful!”
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher