Examination of witness (Questions 40 -
59)
WEDNESDAY 9 FEBRUARY 2000
PROFESSOR ALAN
SWINBANK
40. Commissioner Fischler said in his speech
"the CAP is now a multi-functional instrument designed to
sustain, promote and develop the multi-functional role of agriculture."
So we seem to have got a wonderfully circular argument that has
a whiff of social policy about it. In the context of this round
of the WTO, I can see that both the European Union and Japanese
failed to get this particular concept onto the agenda as far as
the final draft was concerned. Given that we are now proceeding
on the leftovers of the Uruguay Round, where does this concept
stand in that strain of argument? Does it count for anything more
than language or is it possible to defend some of the subsidy
payments that are given to European farmers in pursuit of what
may be a social policy? Are those going to be accepted by others
who are party to these talks? Is it potentially on the agenda
in the post-Uruguay mechanism we are now embarked on?
(Professor Swinbank) In the limited negotiations which
are currently premised for this year my judgment would be that
we cannot press that multi-functionality idea. To my mind it would
involve re-opening the green box and I do not think our partners
would be willing to do it. It might be that in broader based negotiations
where there was give and take between sectors and if the European
Union wanted that sufficiently badly and was willing to give concessions
elsewhere it may be possible.
Mr Mitchell
41. I am going to short-circuit this one. Is
there any way that environmental policy is going to be includable
within the WTO?
(Professor Swinbank) Yes and no. The green box already
provides for a whole series of environmentally related payments
which are provided for and will continue. Apart from the WTO there
is a whole series of international negotiations which go on to
try and establish multilateral environmental agreements, and there
was the recent agreement in Montreal. The problem with those other
multilateral agreements is, if they have a trade dimension, how
do they mesh into the WTO process, and that is one of the issues
which WTO ministers need to grapple with over the coming years.
42. Basically it is not a question for the WTO?
(Professor Swinbank) No. The WTO is aware of the problem,
it has a committee on trade and the environment and there was
a lot of discussion about environmental issues. The let-out clause
in Article XX of the General Agreement includes an environmental
component but in the main environmental considerations are deemed
to be not trade issues, even though they impinge upon trade.
Mr O£pik
43. First of all, how can we ensure the UK's
and the EU's animal welfare standards are maintained? Should we
basically be negotiating a separate agreement outside the general
box, or is that not feasible?
(Professor Swinbank) I think it is highly problematic
at the moment to negotiate an agreement which would allow us to
limit trade based upon animal welfare considerations. Ultimately
within a larger round of trade negotiations, one might envisage
Article XX of the General Agreement being amended to include an
express reference to animal welfare, and then the development
of a new agreement on animal welfare along the lines of the agreement
on sanitary and phyto-sanitary measures. But even that, I think,
is highly problematic because a lot of our trading partners would
be very suspicious about European motives in that. Where we are
on surer ground is in trying to get some sort of international
agreement to enable us to have sterner labelling requirements
on products, which might not meet the standards which are expected
within the European context, and I would certainly welcome that
because I believe consumers have a right to be informed of things
that they believe impact upon the character of the product they
are buying. In terms of the extra cost that this imposes upon
the livestock sector, I would not wish to belittle the extra cost
which animal welfare legislation imposes, but it is not huge in
relation to the import tariffs we currently apply on livestock
products coming into the Community, and if, say, the cost of animal
welfare regimes is raising production costs by 10 per cent, which
would be a very high figure, then that needs to be set against
import tariffs of the order of 100 per cent or so.
44. Given the fact that in the EU itself we
seem to have problems applying our existing legislation—for
example in pig farming the stall and tether requirements, where
there are clearly wide variations in implementation—what
chance do we have of getting the EU position to prevail? Probably
not very high, would you say?
(Professor Swinbank) Not very high.
45. Finally, is there any future in preferential
access arrangements? Preferential access to the EU markets because
of some animal welfare standard or expectation, is there any feasibility
of encouraging raising standards by doing that?
(Professor Swinbank) One way forward in theory might
be to split tariff lines into two, so you had pig meat produced
at one standard and pig meat produced at another standard. That
would require international negotiation, we could not just unilaterally
do it, so we are back to the same problem of negotiating this.
46. Labelling is presumably important there,
giving consumers a choice?
(Professor Swinbank) I would imagine that the European
Commission and ministers around Europe are contemplating that
possibility as a negotiating point.
Mr Todd
47. The concept of a precautionary principle
has been raised for restricting access of goods which are seen
as either potentially dangerous or having an impact on our environment,
or even in some cases having more ethical concerns for consumers.
Firstly, have you been impressed by that as a concept in the trade
talks environment?
(Professor Swinbank) The Commission, I think, would
argue that although the words "precautionary principle"
do not appear in the agreement on sanitary and phyto-sanitary
measures, in practice there is a precautionary principle built
into it, and one of the difficulties is putting operational significance
around that.
48. What do you think it means?
(Professor Swinbank) That is the problem, because
everyone has different thresholds when it comes to applying a
precautionary principle. If a precautionary principle means you
never do things because you are always concerned about the possible
adverse implications of that action, then that would not achieve
substantial support around the world. If you had a higher threshold
then there would be some acceptability of that, and in a sense
the existing agreement on sanitary and phyto-sanitary measures
does allow governments to set their own thresholds provided there
is some consistency between sectors—they do not do something
in one sector which is out of kilter with another sector—and
provided there is some scientific justification for it.
49. So really you are saying that what the EU
has floated in this area is not a useful addition to the already
existing arrangements for restricting the exchange of goods which
may have health implications, either animal health implications
or human health implications or even potentially environmental
implications?
(Professor Swinbank) No, I think their contribution
to the debate is useful and I would imagine that debate to continue
largely within the committee on sanitary and phyto-sanitary measures
rather than being an issue in its own right in the new round of
multilateral trade negotiations.
50. Bearing in mind the elimination of risk
is not possible and we all accept risk in this world and we accept
risk in the food we eat, and also we have varying ethical concerns
on, for example, animal welfare, is one route out of this dilemma
much more flexibility to allow market access but under clear understandings
of an obligation of how goods are labelled so the consumer makes
an informed choice?
(Professor Swinbank) I think that is true, but of
course the precautionary principle does not necessarily just relate
to food standard issues, it relates to environmental issues as
well. You might like to consider the Australian position on this
which in many respects is free trade but their quarantine regulations,
understandably, are extremely strict because of the fear of introducing
into Australia pests and diseases which could cause major problems
within their natural flora and fauna. So there is a range of views
around the world on where this threshold is and countries are
apt to take different standards according to the circumstances
of the time.
51. The Americans have similar controls.
(Professor Swinbank) Indeed.
52. You can be searched at the airports for
chocolate bars and anything else you might bring in which might
cause problems. The possibility of using labels on, if you like,
the health issue, where there may be some remaining risk but you
feel consumers should make their own choices as to that risk,
would you feel that that might fall foul of a complaint against
technical barriers to trade?
(Professor Swinbank) Labelling is covered by technical
barriers to trade. In general, I support the idea of labelling
giving consumers the information to choose between products. It
is extremely difficult, nonetheless, to devise labelling schemes
which do enable consumers to make effective choices, and in terms
of how they mesh with our international trade rules there is a
world of difference between voluntary labelling of nice attributes
which are associated with the product and mandatory labelling
of what one might call negative attributes.
53. So you think putting a death head on some
import might perhaps stray across the boundary of acceptability?
(Professor Swinbank) That would certainly cause eyebrows
to be raised in Geneva.
Mr Marsden
54. WTO reform, Alan. The WTO is extremely unwieldy,
it is bureaucratic. I think Seattle started to demonstrate how
it is not working as an organisation. What do you think should
be done to reform its procedures in relation to agriculture?
(Professor Swinbank) I think it is not just specifically
an agricultural issue, although the animal welfare and the health
issues come to the fore there. In general terms a lot of countries
feel excluded from the decision-making process and that gives
rise to this idea there is a democratic deficit, not just that
members of the public do not get involved in the consultations
but governments themselves do not and it is difficult to know
how to address that issue given that many governments are very
poor and have some difficulty manning effective offices in Geneva
and participating effectively in the WTO process. It may be that
you do not need to do much for the European Unions and the United
States of this world, but you do need to provide more technical
support to small countries to participate. I think it would be
helped if there was some greater transparency of what goes on
in the WTO process. The new web site technology has made this
much better, but there is still a whole series of documents which
are not easily accessible to outside commentators and I think
if you had a bigger body of independent experts scrutinising what
goes on in the WTO process that would be to the better. This sounds
like a plug for more money for academics, I appreciate that, but
nonetheless I think there is a case not just for governments and
lobby groups being involved in trying to influence the process
but an independent body of researchers also commenting on what
goes on.
55. So you are not advocating radical change.
Can we truly continue with 130 countries by consensus trying to
find an agreement on some of the most important issues we are
facing in the 21st Century? Giving assistance to developing countries
and greater transparency in terms of information to the wider
public is froth, is it not?
(Professor Swinbank) It is in one sense, but if you
are going to get countries to voluntarily sign up to new rules
and regulations then you have got to have their agreement whether
they are involved in the voting process or not and so in practice
if you are going to talk about significant changes to the rules
I do not see that you can really get away from a consensus-based
organisation. You can only proceed at the speed that you can get
everyone on board. When it comes to running the organisation,
maybe some countries representing others on a rotating basis may
work and when it comes to the dispute settlements procedure there
may be a case for significant overhaul of that mechanism. But
in terms of establishing the basic international treaties, I do
not see how you can do other than have everyone agree to them.
56. Let us turn to the developing countries.
In reality how much influence do you think they are going to have
on the outcome of the agreement on agriculture?
(Professor Swinbank) Probably not a lot, but in terms
of some of these other issues relating to the agricultural sector
that we are talking about such as animal welfare and the environment
then potentially quite a lot because they tend to view these sorts
of calls as protectionism and unless the European Union can carry
with them the idea that this is to the greater good and not to
their disadvantage they are not going to agree to it.
57. Finally, what changes do you think are needed
to the disputes procedure? Have you any particular thoughts or
comments on that?
(Professor Swinbank) I am not an expert on this, but
it does seem to me that although the disputes settlement procedure
has a lot of merits there are some problems associated with it.
The process is very legal even though the pretence is made that
it is not a legal process. It is a panel of experts who are drawn
to serve on the panels. They have six months to report and there
is a mass of paper that is presented to them. It seems to me that
there needs to be a more professional core of panellists on whom
one can draw so there is greater continuity of expertise from
one panel to the next. At the moment it seems to me the appellate
body is busy re-writing panel reports left, right and centre to
make sure that they are consistent rather than the panel reports
themselves being consistent.
58. So you still think the WTO has a bright
future?
(Professor Swinbank) I would not say a bright future,
but I would hate to see a situation where the WTO process broke
down and we were back to an unregulated system of trade.
Mr Hurst
59. You mentioned that animal welfare will not
be marked high on the market and developing countries will probably
do rather badly and consumers will not gain much but the supermarkets
might. I have not heard anything terribly positive here today
as to why we should go through this enormous trouble to fail to
seek dubious objectives. Is there a case for letting it either
wither on the vine or not bothering to proceed at all?
(Professor Swinbank) I think the next witness will
be a more robust defender of the WTO system, but I would wish
to defend it. We have been talking largely about the parochial
problems within the agricultural sector so far. If you do not
have a rules-based system then what sort of certainty can traders
have in an international environment? Different countries make
their own rules up as they go along. That is highly problematic.
I would be a firm defender of the rules-based system. Whether
the rules we have got are finely tuned enough is another issue,
but we do need it.
Mr Mitchell: Thank you very much, Alan. We have
got used to your clarity and incisiveness on one side of the table
and now we have got it from the other side of the table. We are
very grateful to you. Thank you.
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