Examination of Witnesses (Questions 1-19)
MR DAVID
ROBERTS
WEDNESDAY 23 JANUARY 2002
Chairman
1. David Roberts, Deputy-Director General of
DGVI in Brussels, thank you very much for making the journey to
be with us. We do appreciate that you have to leave at 12 because
I think you are going to Japan.
(Mr Roberts) To be quite honest, Chairman, I was going
to Japan but Mr Fischler was taken ill last week with salmonella.
That has caused a series of events, the conclusion of which is
the postponement of Japan. However, my train is still going at
the same time as it always does.
2. We are presenting our foot-and-mouth report
at a quarter-past, so the deadline remains the same. We are doing
a report into what farming might look like in a regime less dependent
on subsidy and support than now. We aim to try and come up with
various scenarios to test how people would react to that, so we
are not postulating a regime in which there is no support for
agriculture—that would be a fairly brave thing to do, I
think, in the present circumstances—but what we are anxious
to do is to begin by looking at, in a sense, the architecture,
the politics, the constraints upon decision-taking, so that we
do not fall into the trap of just talking as if you have a completely
free reign over policy, because obviously the establishment of
the World Trade Organisation, the European Union, the legacy of
Uruguay—all those are quite significant factors determining
the scope for decision-making. I wonder if I could ask you to
begin by giving us an appreciation of what you think the mood
is amongst European Union Member States about the desirability
of change, the need for change in agriculture and the pressures
upon them? I know there is a series of elections coming, but try
and, in a sense, abstract a little bit from that. How would you
assess the appetite for change in the sense about the policy at
the moment?
(Mr Roberts) Mr Chairman, that is a very difficult
question. I think in 2002, the beginning of 2003, some really
quite difficult choices are going to have to be made, and I think
the difficulty is that those who want very radical reform of the
CAP will see in various circumstances the reason why we absolutely
must have very major reform, and those who do not want major reform
of the CAP will find equally compelling reasons why we absolutely
must not. So it is a very difficult situation to call. On the
external side and external considerations, you have mentioned,
Mr Chairman, the WTO negotiations and, of course, we will be under
pressure there to make more deep cuts in our trade distorting
support, in our export subsidies or even elimination of our export
subsidies, and we will be pressed to give much more market access.
All of that would imply a fairly radical shake-up. There are also
other pressures. There are the negotiations with Mercosur, if
and when Mercosur is able to resume serious negotiations if the
Argentinians are able to overcome their crisis. There is an undertaking
in the Cotonou Agreement to start to negotiate free trade agreements
with the ACP countries in 2002, and we already have given duty
and, soon, tariff-free quota access to all products to the least
developed countries, which will of course have its own impact
on the ACP negotiations. If you look externally and if you look,
also, at the Johannesburg Summit, which is coming up at the end
of this year, which is about sustainable development (which will
certainly be used by developing countries to argue that for many
of them development means agricultural development, and agricultural
development implies better access terms to the developed countries)
you see cast-iron reasons for a very great change in the CAP.
If you look at enlargement, however, the question is a little
bit more difficult, because as regards enlargement there is the
decision of Heads of States and Governments (which is the normal
decision in all enlargements), that the negotiations will take
place on the basis of the existing acquis; and that the
negotiations will be finished this year. It is clear that if that
had not been the position there could be no serious negotiations
this year because we would have to complete our internal reforms
first; and if we have to complete our internal reforms first we
could not conclude the accession negotiations until late in 2003
and then we would be very close to beginning of the work on the
next financial perspectives. So the prospect, therefore, is that
we do reach agreement with the candidate countries, essentially
on the terms on which they adopt the acquis, but it will
be possible, I think, to make that decision such that it does
not prevent the acquis being changed. Nevertheless, one
can well imagine that once the candidates have got an undertaking
on when and how much they are going to get in direct payments,
for example, even if that is expressed as a percentage of the
total community support, they will convert that percentage into
a figure based on the existing level of direct payments, they
will convert that from the euro into local currencies and that
is what they will be telling their electorates is in prospect
when they join. That arm of our equation makes major change, at
the moment, rather difficult. So you have the two external influences,
one rather conservative, the other very radical, and I think both
points of view are represented in Member States. There are Member
States who are always in favour of reforming the CAP: there is
the United Kingdom, the Swedes and the Danes, who have traditionally
looked for a more liberal Common Agricultural Policy.
3. Can I just interrupt a minute, because you
said something very important. It is conventional wisdom—here,
certainly—that enlargement is a great force for change for
the CAP because "we could not possibly afford to bring in
all these new members with an unreformed CAP". What you have
just said, I think, is that actually enlargement is a force against
change because we have to agree enlargement before CAP reform
is completed and once people have come into the European Union
on the basis of a certain acquis then there is far less
likely to be subsequent reform in the light of promises made to
the electorate. Is that a fair summary?
(Mr Roberts) I am glad you interrupted me to ask the
question, because I want to put that rather carefully. Enlargement,
I think, is an event which allows those who want to argue for
reform to argue for reform and those who want to argue for conservatism
to have the means of enforcing conservatism.
4. What do you think?
(Mr Roberts) I thought you might ask me that. I want,
before even replying, to say that I have been a civil servant
even longer than Sir Humphrey, because Sir Humphrey would have
retired by the time he got to my age. I think there have been
various points in my career when it seemed to me that we were
facing the irresistible force approaching the immovable object.
The two clash. It is very difficult to see the synthesis that
will come out of that. I think that what we will see is something
which is considerably less radical than those who want it to be
radical, but it will not be possible to maintain things as they
are. I think it will not be possible to maintain things as they
are, mostly, particularly, because of export subsidies. In Doha
we were arguing a great deal about export subsidies but the argument
was not about whether we cut them but whether we accepted that
the end-point of the cutting would be elimination. Even another
very substantial cut will certainly give an arm to those who argue
for more liberal internal policies, and therefore I think no change
at all is not a realistic prospect.
5. We have already seen the interlocking nature
of the various phases. Could you set out the timetable for us
of the mid-term review, the WTO, the accession negotiations, because
it would be rather helpful to have that bit of calendar?
(Mr Roberts) Yes, Mr Chairman. The position is that
we will complete the accession negotiations in the course of 2002,
which means that we, the Commission, will have to come out with
draft common positions on the tough issues in the very near future,
and we will be doing that in the very near future. The steps to
be done on enlargement now are for the Commission to make a proposal
to the Council as to what our common position should be, for the
Council to agree it and present it to the candidates and the candidates,
we hope, to accept it or to negotiate a conclusion based on that
position. That is 2002 on the enlargement side. On the mid-term
review, we are anticipating making our proposals in about the
middle of the year. We anticipate that that will involve negotiations
running on into the middle of 2003. As regards the WTO, Doha specified
that there would be agreement on modalities by the 31 March 2003.
Modalities are a very key part of the WTO negotiations and therefore
very difficult to achieve because they lay down the ground rules
on which all members have to submit their offers, which they should
do by the time of the fifth ministerial meeting, which will be
sometime later in 2003.
Mr Mitchell
6. You put that answer in terms of the attitudes
of existing states. What do we know about the expectations of
the applicant states? Have they been given any indication that
they have a right to expect the application of the CAP and that
benefits will flow their way? Are they being conditioned to expect
nothing? They need to know that in terms of whether an application
for entry if worthwhile. What information have they been given?
(Mr Roberts) They have been told that as regards direct
payments we will take a decision at a later stage of the negotiations,
which unfortunately is now. They have told us that they want direct
payments in full from the time of entry. They know that although
there was nothing said in Agenda 2000 the financial assumptions
underlying Agenda 2000 were that they would not be receiving direct
payments in the years running up to 2006. However, they also know
that Agenda 2000 assumed entry much earlier than is now taking
place, so they know, I suspect, that there is some room within
the budget limits for them to get some payments.
Mr Todd
7. Can we go back to the Uruguay Round. Can
I ask whether we have actually complied with our obligations under
the Uruguay Round in terms of agriculture?
(Mr Roberts) Yes, we have. Every year we submit to
the Agriculture Committee in Geneva the reports on how much we
have opened in terms of tariff quotas, how much export subsidy
we have paid and the level of our domestic support—the commitments
that we undertook. We have been able to report honestly that we
are within our commitments.
8. You have had no objections to that, or queries
as to whether that is accurate?
(Mr Roberts) The process in the Agriculture Committee
in Geneva is that when these reports are made the other members
can query them, and of course we have had a lot of queries. We
have been able to answer them to the satisfaction of members.
What I cannot say, of course, is that at some point or other some
member might argue that we are in breach of our commitments, as
they did indeed in relation to bananas, for example, and we can
lose cases. The bananas case was not a matter of our Uruguay Round
commitments or rather not specifically our agriculture ones; they
were breaches of the rules of GATT, and GATS rules on trade and
services. In terms of what I think you mean by our commitments,
our export support and on access, we have not faced any challenge.
9. What conclusions have you reached on the
impact on both our regime and on the European economy of complying
with the Uruguay Round obligations?
(Mr Roberts) That is quite a difficult question because
what we did in the Uruguay Round was to change our policy in 1992
with a view to resolving problems that were arising internally,
and those changes made it possible to recommend to the Council
the adoption of the Uruguay Round commitments as being compatible
with that policy. So it is quite difficult to separate out the
effects of the Round and the effects of the policy changes we
made in the knowledge of the Round. What I can say is that in
terms of our exports, the value of our agricultural exports has
actually risen. That is largely because of increases in our exports
of processed products, which has been possible because the price
of cereals, which are part of the component of our export subsidies
on processed products, have for a lot of the time been lower than
world prices. So no refund was needed, but we had an amount of
refund which would be given based on what we have been given in
the past. So we have seen an increase in exports of high-value
products. We have seen no significant problem in complying with
our commitments as regards cereals. As regards beef and some dairy
products, particularly in the first year, we had to take action
in terms of cutting export subsidies in order to remain within
the limits. I think, however, to a large extent we learned to
live within the limits and we have not seen a crisis on the dairy
market arising from that. As far as beef is concerned, I think
it is quite impossible to sort out the effects of the Round and
the effects of BSE. At present we are well within our commitment
because BSE has had the effect of closing many markets to us.
I think, in general, one can say we have lived relatively comfortably
with our Uruguay Round commitments, but that is because we took
policy changes with those commitments in mind.
10. Any difficulties about meeting those commitments
into the future? From what you have said it does not sound as
if there should be.
(Mr Roberts) The existing commitments I think we can
continue to live with, apart from other factors and, also, depending
on imponderables, like the rate of exchange of the euro. I should
perhaps have said in my reply to the first question that one of
the reasons why we have found things more comfortable than we
might otherwise have done is that the euro has been relatively
weak since it came into effect, and that has had the effect of
reducing our prices relative to world prices. If that were reversed
and the euro became very strong, then, of course, we would have
much greater difficulties, even with our existing commitments.
At present we are living well with our existing commitments.
11. Can we turn to Doha. It may have been inflated
in the media, but it was a little difficult to distinguish what
the European Union position was in agricultural negotiations with
a backdrop of loud noises from French quarters as to their position.
I had understood that the European Union took a common position
in negotiations at Doha. How was it that it appeared that one
Member State appeared to be taking a separate stance?
(Mr Roberts) The issue where the appearance of different
positions arose was—
12. Was it only an appearance as opposed to
a reality?
(Mr Roberts) It was only an appearance in the sense
that the Commission, which speaks for the Community in the WTO,
spoke throughout on the basis of the mandate which we had been
given by all 15 Member States. There was, however, a moment when
the chairman of the conference was able to say (although I am
not sure if it was totally true but no one wanted to deny it at
that point) that everyone except the Community could accept the
text which had been proposed before Doha, the text which had emerged
from Mr Harbinson's consultations before Doha. The Community was
still arguing about the phrase "with a view to phasing out
all forms of export subsidies". At that moment, I think,
some Member States may have let it be known that they were more
flexible than others in relation to that position. That is the
point which I think you are referring to, when there was the impression
that France would be taking a tougher stance than others. Our
position was that we were prepared to reduce export subsidies
on condition that the forms of export subsidisation practised
by other members of the WTO were also disciplined, and that was
set out in our mandate. The other point of principle that we were
taking was that the Doha Declaration taken as a whole was setting
the agenda for talks, not actually setting the end-point, and
"with a view to phasing out" was presented as being
a commitment to an end-point which was out of tune with the whole
of the rest of the declaration. So there was just that one day
when we were apparently isolated and when some of the Member States
were suggesting that they would not find it too difficult to join
the majority.
13. What do we learn from that? Negotiating
collectively is difficult, and making sure that the mandate is
entirely clear to all Member States and that Member States adhere
is pretty critical to successful negotiations. Certainly the United
Kingdom representatives have consistently argued to this Committee
that there is an EU position that is taken and there is no separate
United Kingdom stance to be adopted on matters of this kind, once
the position has been adopted. Does this indicate that there is,
perhaps, some weakness in the process of defining the mandate
and authorising negotiations to proceed?
(Mr Roberts) No, I do not think it was that. I think
the point was that the argument about whether there should be
a commitment to phase out export subsidies had been rumbling on
since even before Seattle, and the text was cleverly designed
to be capable of two interpretations; it was "reduction of
all forms of export subsidies with a view to phasing out".
It was possible to argue that all that meant was that one was
going to reduce export subsidies and the mathematical formulae
used for doing so would be one which would eventually lead to
zero, in which case it would have been compatible with our mandate.
On the other hand, you could say—and it was certainly true
from the way the Cairns Group was speaking—that it really
meant, no, no, you were committing yourself to reductions with
a view to getting to the end of them in this round. Between those
two interpretations of what the phrase meant you could obviously
have two interpretations of how we should react when the rest
of the world appeared able to accept it. So it was not a question
of ambiguity on our mandate, it was constructive ambiguity in
the text with which we were presented.
14. As you said, this particular ambiguity was
not new, was it, and one would have expected the European Union
to have resolved the stance on this ambiguity prior to turning
up at the negotiation. It would certainly have given the impression
that it was possible to fragment the EU position relatively easily
within the negotiating process. Would you not agree?
(Mr Roberts) A good negotiator prepares for every
negotiation and every eventuality, but preparing for every eventuality
in a council of 15 Member States which has to take a position
on all aspects is, I think, a little idealistic. I think we knew
before we got there that all were prepared to take the line that
this was not an acceptable form of words. To ask "If the
rest of the deal meets the rest of the mandate, is this form of
words (which is, anyway, ambiguous) so bad that we must risk the
rest of the negotiation in order to oppose it?" is a question
which, quite honestly, you cannot discuss openly in council before
you get to that situation. I think that is just impossible.
15. Turning to what was at Doha, do you believe
that we now have the scope to pursue the objectives that the European
Union have set for this Round?
(Mr Roberts) Do you mean in agriculture, or do you
mean across the board?
16. Yes, in agriculture.
(Mr Roberts) Yes. I am sorry if I am speaking at great
length but sometimes it is important to get the context. The big
argument about the agriculture text, both in Seattle and Doha,
was between those who believed that if you are going to put agriculture
into a new round it should have a new and more ambitious mandate
than what is set out in the Uruguay Round conclusions, and those
who said that what we are intending is that the negotiations based
on Article 20 of the Uruguay Round agreement should be given an
impetus and a deadline by being included in the major round. The
text which Harbinson put together was cleverly designed to be
capable of both interpretations. The outcome, particularly with
the additional words which are negotiated in Doha, is certainly
capable of the interpretation which we have always wanted to place
on it, which is that it is the negotiation itself and not the
decision to open the negotiation which will determine the outcome.
Therefore I can answer your question "yes".
17. It certainly sounds as if you will be at
those negotiations for sometime, if the purpose is to maintain
ambiguity for as long as possible. Is that a reasonable view?
(Mr Roberts) Yes and no!
18. It is, if part of the strategy is to defer
decisions for as long as possible on issues which really do need
to be resolved. Does the Commission need a fresh and, perhaps,
sharper mandate to enter the negotiations in earnest?
(Mr Roberts) Let me just explain what I meant by "yes
and no". Assuming that the deal is something like the Uruguay
Round deal, it will involve reducing tariffs by X per cent, our
AMS by Y per cent and increasing our tariff quotas, perhaps, or
whatever. There will be percentages in the numbers and there cannot
be ambiguity about that. Where there can be ambiguity—and
probably inevitably in life there will be—will be on the
impact, because the impact will depend on other matters. There
cannot be an ambiguous settlement in the sense that the figures
are not clear. Second point: I do not think there is anything
very special about the Doha negotiation in that sense, except
that it is extremely complicated to negotiate with 148 countries
(the number goes up every few days). It is a very complicated
negotiation. To take something which seems totally different,
if you have a train strike and the parties are trying to come
together to resolve it, a lot of the negotiation is about the
terms on which they agree to meet. I think you find exactly the
same situation when we were in Doha; that some say they will only
come if it is clear that more money is on the table, and the employers
usually say "We need to come to see if we can find an equitable
solution". Then somebody, depending on the era, has to produce
a form of words which allows them both to say "We met our
pre-conditions for negotiation" so that they can get together
and actually find a solution. So it is the same situation. It
is not all that unusual.
19. Do you anticipate that the round of reforms
that have just been implemented are a reasonable basis for a negotiating
position in this round? The Agenda 2000 plan has been seen as
the basis of the EU position in the WTO round. Have you heard
anything or seen anything in this exercise so far that makes you
think that will need to be re-addressed with some rigour?
(Mr Roberts) The decision of Heads of Government at
Berlin was that the decisions in Berlin were supposed to be an
essential element of our negotiating strategy for the round, but
the Heads of Government in Berlin also foresaw the mid-term review,
for example. So when we look at the mid-term review we will have
to look at the situation in the negotiations as well as problems,
insofar as we identify them, in the internal application. I think
it is clear that we could not, on the basis of Agenda 2000, meet
all the aspirations of liberals, but, on the other hand, we can
go at least as far and maybe further than the countries to the
right of us—if I might put it that way—Japan, Korea,
and that group of countries. So it is too early to say that we
would need to do more, but we have in any case to consider whether
to do more in the context of the mid-term review.
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