Testing le d’fi fran’ais on Agriculture

According to press reports Mr Chirac told the EU Summit meeting in Hampton Court, England, that France would ‘veto’ a Doha round agreement on Agriculture that required cuts in support or protection greater than those contained in the EU’s 2003 decision on future Common Agriculture Policy (CAP) reforms. Could he do that? Well … the WTO’s decision-making procedures suggest it might be a close-run thing

Chirac’s spokesman qualified the threat as a ‘right reserved’ rather than an an ultimatum:

“Mr Chirac’s spokesman said France ‘reserved the right not to approve’ any outcome of the Doha talks that undermined the 2003 EU deal on farm reform, which set out policy until 2013.

Mr Mandelson outlined his latest proposals in a ‘difficult and frank’ discussion with Dominique de Villepin, French prime minister, on Wednesday, EU officials said. ‘Voices were not raised,’ one added.”(Financial Times)

But France cannot veto, on its own, EC policy decisions on external trade or in WTO where the Commission speaks and negotiates on behalf of all members of the Treaty of Rome (the EC’s fundamental constitutional agreement). Within the EC, a weighted majority voting procedure applies to external trade decisions and France alone does not have sufficient weight to reverse majority decisions.

In the WTO, both France the EC are original members. It’s a unique double dipping arrangement that arises out of the EC’s status as the only large customs union in WTO. The rules on membership say that any government (or in the EC’s case, intergovernmental organization) that controls a customs-territory may be a member of WTO. The EC itself qualifies under this rule, as does France.

So when we get to the final scenes of the Doha round, France, as a full member of WTO, may refuse to join a consensus on the Agreement on Agriculture, even if the other members of the EC go along with the consensus. Normally, this would hold up agreement and cause at least delay and further wrangling to achieve consensus.

But there’s another way to make decisions. The Agreement Establishing WTO (sometimes called the Marakesh Agreement) provides the WTO rules on decision-making. Article 10.1 of the Agreement notes that consensus is the usual way of making decisions but that a Ministerial Conference may put matters to a (simple) majority vote. In such a vote, the EC will have as many votes as it has member states: that is, 25 including France.

Now, suppose instead of allowing France to hold a decision on Agriculture to ransom by refusing to join a consensus, the Members of WTO decided to vote. The EC must vote en bloc (according to the requirements of the Treaty of Rome). As I understand Article 10, it contains the same expectation: France should not exercise its own vote in WTO but must reach an agreement with the other members of the EC how Europe’s 25 votes should be cast. In that internal negotiation, France is faced with the EC’s qualified majority requirement: it cannot unilaterally determine EC external trade policy.

But if I am wrong and France can exercise a vote in WTO independently of the other 24 members of the EC (thus delivering yet another constitutional crisis to Europe), it might just squeeze through. France will have to find 74 other WTO members to vote ‘no’ with it.

Here’s the worst case scenario.

Let’s suppose that the G-33 group of developing countries that want to open up market access as little as possible are not entirely happy with the final agreement and see no harm to their interests in allowing negotiations to collapse, even if this means that Europe and the USA may continue to use export subsidies. They comprise 42 WTO members.

Let’s suppose, too, that the highest protection developed countries in the G-10 (Nine members: Iceland, Israel, Japan, Rep of Korea, Liechtenstein, Mauritius, Norway, Switzerland, Chinese Taipei) take a similar view and that the six ‘recently acceded members’ (6 RAMS: Albania, Croatia, Georgia, Jordan, Moldova and Oman) decide that they have ‘given enough’ in the terms of their accession to WTO and don’t stand to gain much from additional access obligations under a new Agriculture agreement.

That adds up to 57 WTO members who might join France if a vote were called. France would need to find support from seventeen more countries from e.g. the African, Caribbean and Pacific group to which it channels aid, in order to win a majority. That’s would be a big challenge … but not impossible.

Why would 74 countries that would otherwise join a consensus for an Agriculture agreement vote against it if given the chance?

That’s a question for another time. But think of it this way: a vote would not only call Chirac’s bluff but also that of every other government that would prefer to go along with a majority consensus rather than make an overt choice. In the circumstances of a vote, some governments will vote ‘no’ as a means of avoiding responsibility for change.

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