Examination of Witnesses (Questions 39-50)
28 OCTOBER 2003
COMMISSIONER PASCAL
LAMY AND
MR MATTHEW
BALDWIN
Q39 Chairman: Commissioner, thank
you very much for coming this afternoon. I suspect if you had
to visit all of the Member Parliaments it would keep you very
busy, so we are very grateful to you for doing this. Before we
get on to the trade, and this is not in any way to ambush you
because I am not going to ask you to make any comment at all but
my colleagues would think it strange if we did not make some comment,
and it would be discourteous if we did not give you advance notice
of one of our concerns. Many of us, indeed most of us, last week
were in Israel and the Occupied Palestinian Territories and in
due course we will be producing a report. This is a very, very
complex issue. It is not an issue where right and justice is on
one side or the other. Amongst the many issues that caused us
concern were the expansion of the settlements into the West Bank
and to Gaza. As I understand it, the European Community takes
the view that they are illegal under the Geneva Convention. I
think we were also concerned by the almost impossibility of there
being any trade from the Occupied Territories. In due course we
will be writing to you and I just give you notice of this so that
you know it is a matter about which we are genuinely concerned,
it is not a formalistic thing. We are concerned that Europe has
trade agreements which provide for free trade, both between Europe
and Israel and between Europe and the Palestinian Territories,
but we have the view that the Israeli closures make the export
of Palestinian goods practically impossible. I think that one
of the issues that we will want to explore with you and Chris
Patten is the extent to which existing EC/Israeli trade agreements
can be used as a lever to tackle obstacles to Palestinian exports.
I think the other concern we have is how is the EC working to
address the issue of mislabeling of goods which have clearly been
produced in the settlements and driving through the West Bank
it is quite clear that many of the settlements are huge, big,
quasi-industrial units. Has there been any attempt to calculate
how much has been lost in custom duties because of this practice?
Again, to what extent is this a possible area of leverage in relation
to the negotiations and the EU's position on all this? I do not
expect you to respond now, in fact I think it would be unfair,
but I just would not want this moment to pass and you think "It
is very strange, I went to see the Select Committee, they did
not raise it with me and now they are writing to me about it".
If you would like to comment please do, but I would not want you
to feel in any way you have been ambushed.
Commissioner Lamy: No problem,
Chairman. On your second point, which was the problem of Israeli
exports of goods which in reality come from the settlements, whether
they are in the West Bank, the Gaza Strip, East Jerusalem or Golan
Heights, we have a problem because these exports cannot benefit
from the preferential access which Israel has to the EU market
according to the EU/Israel Free Trade Agreement. We have another
agreement, as you rightly said, with the Palestinian Authority
but this is a different one. It is a problem we have had for some
time. At the end of 2001 we published a notice to importers which
was a clear warning that if the national customs services have
an indication that the origin is in reality from the settlements
then duties can be reclaimed in the hands of the importers. This
is a sort of holding measure which we have taken; for the rest
we are still discussing this with the Israeli Government because
it is something that we should really get rid of. On the first
point which you mentioned, which was the problem in reality of
the Palestinian Authority not being able to trade, which is also
something we have been working on, we have had contacts, including
in person, with both the Israeli Trade Minister and the Palestinian
Trade Minister not that long ago in Palermo in Italy before the
summer time and we are trying to address this, brokering some
improvement in the position because de facto the customs
are Israeli customs. We made progress with the Israeli customs
service paying back to the Palestinian Authority duties which
they collect on behalf of the Palestinian Authority which for
a long time they had not been paying back, so this is moving in
the right direction, but we still have a problem with the trade
itself and we are trying to address it and Chris Patten, on his
side, is also doing that.
Chairman: A number of us were at Cancún
and, indeed, the Committee was officially represented as observer
by Tony Colman so, Tony, would you like to start?
Q40 Mr Colman: Yes, indeed. Thank
you, Chairman. Before I put my question can I make two comments.
First of all, I was particularly impressed by the sustainable
trade day which you addressed on the day before the Cancún
conference started, which was "From Johannesburg to Cancún
and beyond", and particularly interested in the work that
you were doing with your part of the Commission on sustainability
impact assessments. We have had many criticisms from NGOs that
these sort of impact assessments of trade polices are not being
carried out before trade policy is changed. I was there with DFID
representatives and there was some criticism of the methodology
but there was applause for the fact that you were doing this work.
I think it would be important for you, if you could, to actually
inform this Committee, and I think there is a report that is going
to come out in the next month which will be a move forward on
this, as to how you see sustainability impact assessments being
part of the Doha round. The second thing to comment on is while
I was very pleased that you were able to attend the joint IPU/European
Parliament Assembly that took place on the Tuesday and the Friday
of the Cancún meeting, I was disappointed that members
of delegations who were parliamentarians of Member States were
unable to attend your briefings that you had with the European
Parliament. I would ask perhaps in the spirit of the 133 Committee
that you might perhaps at the next meetings of the WTO Ministerials
allow that not only Members of the European Parliament can attend
your briefings but also representatives, one per Member State,
who are parliamentarians who are members of delegations. I suggest
you respond on either of those. One is a slight compliment, a
work in progress, and I applaud you for doing it, and I hope DFID
will be following it up on sustainability impact assessments,
but, secondly, in terms of accountability and democracy within
the European operations to ensure not just the European Parliament
are consulted and briefed as the negotiations go on but also members
of individual parliaments who have been appointed by their parliament
to serve on the delegation of that Member State. My question really
is a more general one having, if you like, talked about specifics,
which is what is your assessment of the failure of Cancún
and do you think there was, in fact, a good deal for developing
countries that could have been achieved there? Do you think that
the WTO in a sense can ever deliver a development round given
its membership of extremely unequal countries in terms of their
economic punch, as it were, or is this, if you like, a lost cause?
Commissioner Lamy: A very short
comment on your first two points, if I may. On the first one,
sustainability impact assessments are now systematically part
of our trade policy and whichever trade agreement we negotiate,
whether it is multilateral or bilateral, it is now accompanied
by a sustainability impact assessment. You are right that the
methodology is not yet there but we are icebreakers in terms of
moving this discipline forward. It is all available on our website.
The moment we have a finding or a piece of paper or something
we have put together, we make it available so that stakeholders
can have access to it. On your second point about the organisation,
the rule within the European Union is that there is an EU delegation
with Members of the European Parliament and there are national
delegations with members of national parliaments and until now
the rule has been that it is national ministers who brief national
parliamentarians. I am not aware that this rule, which by the
way is set by the Member States themselves, has been changed but
if the Member States want to change it, it is up to them, and
we in the European Commission will discuss it with them. On the
points of substance, could Cancún have worked and can WTO
today deliver a truly development round? Yes, it could have worked.
It did not work, it was a big failure, it was a real collapse,
but it could have worked. Looking back after a month of reflection,
there are good reasons which now appear which could have led us
to say it could not have worked: there is a mix of classical negotiation
that does not work because negotiating positions are too far from
one another on the one hand, and the setting of this and the climate
and the temperature and the pressure and the way things happened
on the other, which together just did not result in an agreement.
There are also a few more fundamental reasons, for instance the
reluctance of the so-called G90, Africans, and Least Developed
Countries (LDCs), who benefit from trade preferences, notably
in Europe and the US, and if you put yourself in their shoes the
view that any progress will in reality result in an erosion of
their preferences is not at all an incentive to pushing forward
for negotiation. If we have a tariff on canned tuna which is 20%,
and the Africans and the LDCs have a zero tariff as a result of
the preference we give to them, and if the result of the WTO round
is that Thailand and the Philippines get 10% instead of 20%, that
is not good news for the Africans or the LDCs because they will
lose the 10% comparative advantage that they have. With the big
presence of China in many markets today it may make a bit more
obsolete the way trade negotiations have been going on in GATT
for the last 50 years where you nicely and progressively trade
at 5% comparative advantage here and there. For the big new player
whose comparative advantage is 40% anyhow, trading marginally
at 5%, that may not be such a nice gain as it used to be. In my
view, and with the benefit of reflection, the reasons why it did
not work were a mix of the accidental and maybe more the systemic
which we have to address if we want to reignite this process.
On whether or not we can develop a development round, yes, we
can, provided that the notion is not that a development round
is a round where the EU and the US do all the opening and where
China, India and Brazil will do none. It all depends on what you
call a development round. There is a north/south dimension in
trade and, by the way, we have seen in Cancún that there
are several "souths"—for example, the G21 and
the G90. There are several "norths", by the way,—the
US, the EU, Japan, and there is a strong north/south dimension
but also a south/south dimension. Let us not forget that 70% of
tariffs which are paid on exports of developing countries are
paid to developing countries, so if a development round is only
about north/south it cannot work. A development round can work
north/south but it also has to be south/south. I do not think
we or I or you will convince, for instance, EU textile producers
that it is a good idea to reduce again the 10% or 15% tariff which
we have on this to zero if India keeps its 100% or if China does
not make a further effort compared to what they did to join WTO.
Q41 Chairman: Commissioner, when
you reported back to colleagues in the European Parliament after
Cancún you observed that we, and I think by that you meant
Europe, were not prepared for the new geo-political groupings
which emerged at Cancún. I just wondered what we might
have done or what might have been done differently had you been
prepared for that.
Commissioner Lamy: You are quite
right, Mr Chairman, to say that. When I debriefed the European
Parliament just after Cancún I made this point that, for
instance, G21 has what I call an agricultural mother and a political
father and that this notion that Brazil, India, China and South
Africa are together leading a group does not only have to do with
agriculture. In my view it has to do with a more geo-political
dimension, whether it is a reincarnation of the non-aligned movement
or whether it has to do with the way the Iraq war question was
discussed in the Security Council in the UN; there are many explanations
for it, but there is a political dimension. I think it may be
a very positive development. It is like trades unions. I think
that in the WTO with 148 members and the very disorganised way
in which this organisation works it is a good thing that groupings
appear which are negotiating unions (note the play on words) and
that G21 is a trade union and G90 is a trade union. By the way,
the European Union is also a trade union with 25 members so we
should not be surprised at this. We also have to adjust. If that
is to be the rule for the future, and I think there are good reasons
for that, we have to adjust to this new reality, including the
way in which we relate to these groupings, which, by the way,
I am doing now. I have had rather a good chat with the Brazilian
Foreign Minister, who is a sort of trade union leader in the G21.
I had this morning a phone conversation with the Bangladesh Trade
Minister who was the G90 trade union spokesman in Cancún,
and I think it may become a positive development.
Q42 Tony Worthington: After Cancún
you used some strong language about the WTO's mechanisms—"medieval"
and "neolithic". Could you expand upon that?
Commissioner Lamy: I used "medieval".
I did not use "neolithic". I nearly did but I was strongly
advised that I should not do it in Cancún and I did not
do it. These are, of course, two harsh words. My view is that
as an organisation WTO is pretty disorganised and, given that
it is one of the strong pieces of international governance we
have in today's world (and I personally regret that we do not
have more), we have rules and we have been making these rules
more and more binding for the last 50 years quite consistently.
We have a Dispute Settlement Machinery which is very original
and which transforms these rules into effective disciplines, so
it is important for many people, and yet the WTO's organisation
is fairly weak. The one man/one state/one vote principle is not
bad, and the attachment of many of the participants to the fact
that it is a member-driven organisation, but the theory that each
and every piece of legislation we agree on has to be drafted by
148 delegations composed of five people each in a sort of grand
"sit-in" just will not work and the fact is that it
does not work. As a result nobody returns good pieces of legislation,
and yet this is binding legislation. It is not a resolution that
we believe things should be this way or that way. When we take
decisions in WTO it impacts upon the law of each of the 140 Member
States and the lives of billions of people, so there must be a
way other than a permanent "sit-in" of 148 members to
do that. For instance, should we not review the fact that the
Director General of the WTO has no power at all? This eminent
person does not have any right of initiative. He cannot even convene
a meeting of the General Council in Geneva and decide himself
what the agenda of the meeting will be. The Chairman of this Committee
here today has infinitely more powers on what happens in it than
the Director General of the WTO has in his system. If we are confident
that we need a lively, energetic and well-functioning WTO (which
I think we Europeans do, which this country does, which I do),
we need to reorganise it. The question is, how shall we do that?
If we table proposals to revamp or review this process is that
not going to overload a negotiating agenda which is already very
full? It is an argument which deserves careful consideration and
this is why—and we are discussing this within the European
Union, the Member States and the European Parliament—I personally
think we should table modest proposals, for instance, on the way
a Ministerial Conference is handled. Those of you who were in
Cancún know that we spent a week down there, that during
five days we were preparing the negotiations—through bilateral
contacts, facilitators and many invisible things—which really
started at the end of the fifth day and aborted on the morning
of the sixth day. That is not something which is run in any sort
of efficient way so without overhauling the whole system I think
there is scope where we could improve things in the short term
and make sure that this very important asset of ours is not eroded
by poor organisation.
Q43 Tony Worthington: One of the
issues related to that is about the timing of reforms, that you
say you have got something which is broken, it is not working,
but surely we must make sure that reforms do not get in the way
of rescuing Cancún.
Commissioner Lamy: I take this
point. I totally agree with this. I think we should address the
organisational problem but we should not do it in a way that risks
endangering the re-ignition of this process. We Europeans in a
month's time, when we have consulted with each and every other
Member State, with the European Parliament, with industry, with
trades unions, with NGOs (which we are in the process of doing),
will have to decide whether we really want to move the thing forward.
That is my personal view. I have to check that the people to whom
I am accountable to share this view.
Q44 John Barrett: When Patricia Hewitt
gave evidence to this Committee on 16 October she said then, "Europe
as one of the largest and leading players in the WTO does need
to take a lead and put a great deal of effort into helping get
the talks back on track in Geneva". What is the European
Commission doing to help get the development round back on track?
Commissioner Lamy: As I have just
said, just after Cancún we started a period of reflection,
consultation, listening, both within the Union and outside the
Union. The negotiating mandate I have dates from September 1999,
so it is four years old, which is not a problem but when there
is a shock like the one we all had in Cancún you have to
go back to your constituencies and check where the negotiating
position is, which we are doing within the Commission first, of
course, because many of my colleagues have a stake in this: the
Environment Commissioner, the Agricultural Commissioner, the Commissioner
responsible for competition, the Commissioner responsible for
enterprise all have their view of what we should do now. We are
doing this within the Commission, then with the Member States,
then with the European Parliament and, as I said, in parallel
with business, trade unions, NGOs, on the basis of a few questions
which I will give you. At the end of this process my intention
as a negotiator is to have, if not a re-shaped, then a revamped,
revisited negotiating position so that we know where the big offensives
are, where the big defences are, where our "red lines"
are, so that everybody knows where we want to go. This should
be done in time so that the next deadline which we have agreed
in Cancún—and it is one of the rare things we have
agreed in Cancún—is that we should try and resume
the process so that by mid December we are available for an exercise
of this kind. I have been doing this on the basis of four questions
which I have raised with the European Parliament and the Council
of Ministers. The first question is, should we keep this balance
of ours between trade opening and rule-making, which is very specific
to the European agenda? Secondly, depending on the answer to the
first question, should we keep this priority for multilateral
negotiations (to be complemented with bilateral negotiations whilst
keeping this bias which we have in favour of multilateralism,
or not? The third question is, what exactly is a development round?
What do we intend by a development round, in order that there
are no ambiguities like the ones we discussed a moment ago which
could lead to misunderstanding? For instance, what should we do
with preferences which, as I have said, now are becoming a problem
in moving the round forward? Of course, the fourth question is,
what should we do with the WTO as an organisation in terms of
improving it? These four questions are being discussed, as I said,
with the Member States, the European Parliament and NGOs. Some
of them, by the way, have already tabled answers, like WWF, who
have been working on this and putting forward their position,
and we will do that until, let us say, the end of November and
then come out with a revisited position. In the meantime I am
also contacting some of my colleagues, notably in developing countries.
I will be in China at the end of this week. I will be in Washington
next week. There is a whole lot of listening which we can do with
this idea, which I agree with Patricia Hewitt is our idea, that
we probably care more about this system than others, the problem
being that caring more than others for the system should not mean
that we have eternally deeper and deeper pockets in a negotiation.
We probably have to pay in a negotiation like this. We cannot
be the only ones to pay because we care more than the others about
the multilateral trading system. That is the tactical difficulty
we have.
Q45 Mr Colman: On the Saturday evening
you met with the media and the European parliamentarians to talk
about your ten red lines, one of which was the Singapore issues
and we always assumed there was a slight wink when you announced
that that was a red line, and of course the next morning you made
an offer. Can you tell us what that offer was on the Singapore
issues and does that offer still stand?
Commissioner Lamy: The mandate
I had on the day before, which was the one I had to follow because
it is the one which the majority of the EU Member States agreed,
was that we should not unbundle the Singapore issues. The next
morning we had a Green Room meeting, which is a sort of panel
meeting with adequate geographical representation of the membership,
where we discussed Singapore issues and where it appeared, following
a suggestion which was made by the chair of this meeting, Mr Derbez,
the Mexican Trade and Foreign Minister, that some sort of compromise
on the Singapore issues might move the negotiation forward, it
being understood that then we would move onto agriculture, industry,
services, and the whole list of topics, to which I said, "That
is not within my mandate", but, as a negotiator can sometimes
say, "My judgment is that it might be worth considering.
I have to go back to my constituency", which I did, "and
check with the Council of Ministers whether or not I am authorised
to accept a compromise which would be to unbundle the Singapore
issues, keeping the negotiation on trade facilitation and transparency
in government procurement and drop investment and competition".
That was a proposal which the Council of Ministers accepted and
which I then made in the spirit that it would move the negotiation
forward. Then there was the check with the others. The African
group said, "No way. We do not want any of these four",
and the Koreans said, "No way. We want these four together",
which then led to the conclusion by the others that there was
no point moving the negotiation to other topics, that we continue
on this one and then it would unplug the conference, which it
did. The reason why I am giving you this detailed explanation
is that the spirit in which I made this proposal was that the
negotiation would move forward. The negotiation did not move forward
and we are now back to square one.
Q46 Mr Colman: So have you withdrawn
the offer?
Commissioner Lamy: I have withdrawn
the offer as anybody has withdrawn anything which was on the table
and, by the way, there was not much on the table other than what
we had put on the table, and that was through Doha, between Doha
and Cancún and through Cancún. The table crumbled;
there is no table and there is nothing on the table. Does this
mean that we are not re-thinking, revisiting our position on Singapore
issues? No. There is a clear view among a number of developing
countries who are fervent supporters of Singapore issues, notably
Latin America, that we should revisit our position, but some are
opposing it vehemently, although it was in the Single Undertaking
which was agreed in Doha. We are now re-thinking as to whether
on some of these Singapore issues we could, for instance, move
to a plurilateral agreement, as we already have for government
procurement, rather than a multilateral agreement, or whether
we should or should not maintain some of the Singapore issues
within the Single Undertaking. These are ideas on which we are
working and consulting with the main stakeholders, as I said a
moment ago.
Q47 Mr Colman: So will you be pushing
for inclusion at the meeting in December within the WTO of the
agreements on investment and competition?
Commissioner Lamy: Too soon to
say. This is being discussed internally, as I said, between me
and my colleagues in the Commission and then with a number of
other trade policy constituencies.
Q48 Hugh Bayley: It seems to me that
the critical issue is to reach agreement on agriculture without
which there cannot be a deal at all. Given that developing countries
did not feel at Cancún that enough was being offered by
the EU in terms of reduction of subsidy and reform of the CAP
what will the EU have to offer in order to get the negotiations
back on track? In particular, Commissioner, I would like to know
your view about the export subsidy proposal which President Chirac
made at his summit with African leaders in March, which seemed
to me and to many people in Britain a good step forward, and I
was extremely concerned that that did not form part of the EU
negotiating position at Cancún. Can it be restored as one
of the changes to the CAP package we have put forward?
Commissioner Lamy: Agriculture,
of course, is a critical issue. There are many critical issues
in the round. Maybe some are more critical than others, but there
are many critical issues. Industrial tariffs is a critical issue.
World trade is 80% of industry and 10% of agriculture. I would
not agree that one of the reasons for the failure of Cancún
was that the developing countries found that there was not enough
in the EU offer, first because the EU is not the only player in
agriculture; the US is another big player. Secondly, as we have
seen in Cancún, there is no such thing as developing countries
in general. Discussions, if not negotiations, did take place in
Cancún between the EU and the G21, the US and the G21,
and even the EU and the US together with the G21. I do not think
the discussion on agriculture went far enough, for instance, in
discussing numbers because nobody was suggesting we should discuss
numbers in Cancún. What we were discussing on agriculture
was a framework that would lead the negotiations to a stage where
we could then discuss numbers. Of course, we have made quite a
number of very substantial moves in the direction of developing
countries in agriculture, not least on export subsidies. This
proposal which you mentioned of the French President, which was
removing export subsidies for Africa where they create problems
for African countries, has not only been adopted by the European
Union as such (and the President of the Commission defended it
in the G8, so it became an EU position) but also, since the G8,
including in Cancún, it has been extended to every developing
country. I had the authorisation, and I would not have done it
otherwise, to table a proposal, which I did in Cancún,
that the European Union was ready to remove export subsidies for
products of interest of developing countries, so this French/African
proposal has been extended to every developing country. By the
way, I am still waiting for the list of where we should suppress
our export subsidies because developing countries have problems
with them. This was on the table in Cancún. Will it be
on the table on 15 December? This we are, of course, reviewing
in the process which I mentioned a moment ago. My proposal would
be that we keep this but, of course, it deserves also some sort
of interaction on the part of developing countries.
Q49 Hugh Bayley: When we came to
Brussels earlier in connection with this inquiry we were fortunate
to meet you and also to meet Commissioner Fischler. Commissioner
Fischler made it clear to us that in his view the agriculture
negotiations within the WTO were his responsibility as the Agriculture
Commissioner, not yours. A lot of people have highlighted the
incoherence of policy, not just EU policy but policy by many of
the players at WTO,—the incoherence between trade policy
and development policy, by which I mean inconsistency, and between
trade policy and agriculture policy as a cause for the stumble
at Cancún. Would it make sense for the EU to have a single
clear negotiator with responsibility for all areas of EU policy
rather than having two commissioners, perhaps even three, with
the Development Commissioner's responsibilities, with a role to
play in the negotiations? Would it not make for a more coherent
position within our group at the WTO?
Commissioner Lamy: I do not think
it is a problem. The tradition in the Commission is that the Trade
Commissioner is the head of delegation, that he has the authority
to co-ordinate the positions and that, given the importance of
agriculture in the framework of what we are doing together in
the European Union traditionally, the Agriculture Commissioner
is responsible for the agricultural part of the negotiations.
I have not had any problem on this. I do not think Franz Fischler
has had any problem. We have always worked together extremely
well and I do not think that during the four years we have spent
together on this boat, whether it is about multilateral negotiations
or bilateral negotiations, we have ever had a problem. I would
not say that was always true in the past, and my second life in
Brussels in this respect clearly demonstrates that we do not have
a problem, when compared to the first life I had in Brussels,
so there is no problem, provided the Commission as a college works
as a college, which in my case and in Franz's case is not a problem.
Is trade policy articulated with development policy? Yes, because
we have the same sort of relationship with Poul Nielson. Is EU
agricultural trade policy coherent with the development policy?
I think it is improving. I would not agree that this was the case
20 years ago. I think the reforms which were started in 1992,
re-energised in 1999, plus the 2003 reform each and every time
have moved us into a more trade-friendly agricultural policy and
a more development-friendly agricultural policy, and look at the
numbers on what we import from developing countries. We are by
far the biggest importer and, as Franz Fischler often says, we
import more from developing countries than the US, Australia,
Japan, New Zealand and Canada together, and there is more to come
with the sugar reform, for instance, which he and I have started
tabling recently.
Q50 Hugh Bayley: There have been
efforts to shift CAP resources to non-trade distorting subsidies,
or largely non-trade distorting subsidies, which is clearly a
move in the right direction, but how confident are you that all
the agricultural support which currently is in the Green Box is
actually non-trade distorting? Would the EU be prepared for an
independent body, such as the OECD or the World Bank, to make
an assessment of which Green Box agricultural support measures
distort trade? Is this a way of breaking the disagreement that
there is between the EU, which sees this as a way of reforming
our policy, and developing countries, specifically the G20, who
are not convinced that everything we have put in the Green Box
is really non-trade distorting?
Commissioner Lamy: It is a very
interesting academic question, whether or not decoupled farm support
is or is not trade distorting. You can have many views about this,
the extreme view being that any farmer in the European Union has
a problem because no European farmer will be able to compete,
if it is on beef, with Argentina, if it is on wheat, with Australia,
if it is on sugar, with Brazil. We may in the end remain able
to compete on a few wines and cheeses. Of course, that will never
float because we want to keep a number of our farmers on the land
and for instance, if we put animal welfare or environmental constraints
as parameters which handicap their competitiveness as compared
to an Australian or an Argentinian farmer, then we have a problem.
I think the right table to discuss this around is WTO. The OECD
is fine. It is a first quality think-tank, but there is an organisation
which is about trade negotiations and where, by the way, the criteria
for what is in the Green Box are decided, and this organisation
is the WTO. We have criteria for what is in the Green Box. We
have criteria for what is in the Blue Box, we have criteria for
what is in the Amber Box, and we decide this in WTO. The OECD
can give a good input. By the way, they have a calculation for
farming support which is different from the WTO calculation because
they have their own methodology; hence the "300 million"
number which they have put together which is too often interpreted
as "300 million" subsidies, which it is not. They have
their own way of doing this. I think the right organisation to
discuss this in is WTO. I would strongly advise a number of our
developing country partners, by the way, that they should not
persist with their argument that, for instance, the Green Box
should be capped. It is the best disincentive to further CAP reform
which one can find. We have progressively in recent decades moved
from Amber, which is very trade distorting, to Blue, which is
less trade distorting, to Green, which is not trade distorting,
in WTO terms, and I think this is what we should do and, by the
way, this is what the Americans should also do, and this is why
we should push the Americans to do it. We trade people are at
the end of the day rather pragmatic. If at the end of the day
you can move something which is very trade distorting to something
less trade distorting and then from less trade distorting to even
less trade distorting, I am happy with that.
Chairman: Commissioner, thank you very
much. I know that we are very shortly going to have a vote and
I know that you have to leave fairly soon so, rather than having
the inelegance of having half your answer cut off by the division
bells, I think it might be a sensible point to close the session.
Thank you very much for coming. I am sure these are issues which
are going to continue to engage us for some time.
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