Memorandum submitted by The Food and Drink
Federation
FDF, DOHA, WTO AGRICULTURE MODALITIES AND
THE DEVELOPMENT AGENDA
The Food and Drink Federation (FDF) represents
the food and drink manufacturing industry, the largest manufacturing
sector in the UK, employing over 500,000 people. Many more are
employed in support industries. The industry's annual turnover
is some £66.2 billion. It purchases some £11 billion
worth (about two thirds) of UK agricultural produce but also
imports a further £7 billion worth of produce for processing.
UK food and drink exports in 2001 were £8.55 billion. Some
two fifths, £3.4 billion, of these exports went to non-EU
countries.
FDF WELCOMES BOTH
THE COMMITMENT
TO WORLD
TRADE LIBERALISATION
AND TO
THE DEVELOPING
WORLD THROUGH
THE WTO DOHA
ROUND
Not least as the UK is already a major importer,
we welcome the emphasis on the developing world, and in particular
the least-developed countries (LDCs), in the Doha Declaration.
Equally we welcome the commitment to trade liberalisation, but
this must be equitable: FDF looks to the WTO agriculture negotiations
to produce a fairer and clearer set of trading rules, treating
agricultural products and value-added processed food and drink
products in balance.
THE IMPORTANCE
OF MAINTAINING
UK COMPETITIVENESS
Increased trade liberalisation is key to the
future competitiveness of the UK food and drink manufacturing
industry: as a major exporter, it is essential that the UK food
and drink manufacturing industry can continue to compete for both
existing and new markets opening up outside Europe; there are
significant and growing opportunities to be grasped over the next
10 years as ever larger numbers of consumers are starting to enjoy
disposable incomes and looking for new and diverse choices in
the food they eat.
At the same time, manufacturers must be able
to continue to import necessary raw materials from third countries
without impediment, provided food safety is not jeopardised.
A particular challenge over these 10 years will
be to maintain production and investment within the UK, as companies
make new regional or global decisions and as the EU enlarges.
KEY ISSUES
ARISING FROM
THE DEVELOPMENT
ASPECTS OF
THE DOHA
AGENDA
1. International Standards/technology transfer—maintaining/enhancing
public trust and confidence in the safety, wholesomeness and quality
of the food supply is paramount.
FDF looks to the maintenance of international
standards in food safety, which cannot be compromised—technological
assistance, technology transfer and other technical support will
be necessary to enable developing countries to meet these standards.
FDF does not want the SPS Code to be re-opened;
Codex is the principal global basis for developing consumer health
protection, based on quantifiable, science-based standards aimed
at enhancing food safety, thereby minimising trade barriers and
consequently facilitating global economic development.
Any use of the Precautionary Principle must
be proportionate to the risk, applied in a non-discriminatory
way and must not give rise to disguised restrictions to trade;
equally, attempts to use standards as hidden trade barriers need
to be avoided.
2. Sourcing from developing countries.
Provided that these international food safety
standards are met, we believe the opportunities for sourcing agricultural
raw materials or semi-processed products for further processing
from developing countries should markedly increase with a successful
outcome of the Round However, clear distinctions will need to
be made between countries in different stages of development,
for example Brazil from India, and India from Uruguay and other
LDCs.
3. Market Access and Special Products.
FDF believes that greater market access must
operate both ways: it is essential that the UK food and drink
manufacturing industry can continue to compete for the new markets
opening up outside Europe. FDF awaits with interest the "ongoing
technical consultations" into the definition of "special
products" for developing countries, as proposed by Mr Harbinson.
If the cost of reducing barriers to exports
to third country markets is that barriers against imports from
third countries are to be lowered, it will be essential to retain
the incentive to process food and therefore add value within the
EU; EU tariff reductions must not outpace internal price support
cuts.
4. Ethical trading.
FDF companies supporting FDF's Statement of
Principles are committed to ensuring that relationships with suppliers
are ethically as well as commercially based. FDF works closely
with UK, EU and international bodies to promote the dissemination
of best ethical trading practice to help members tackle this complex
issue.
5. Preferential treatment.
FDF notes with concern the fears expressed by
many ACP Member States as to the Harbinson proposals in this area
and considers that in certain cases (e.g. where narcotics may
be the main alternative crop) derogations may be necessary. In
any event transition periods will need careful management.
6. Export subsidies—a coherent approach
between the three pillars.
Certain exports of processed, value-added foodstuffs
currently benefit from export restitutions. So long as EU prices
for agricultural commodities are above the world level, restitutions
are essential to achieve competitively priced exports.
FDF is concerned that the current Harbinson
proposals concerning the reduction of export subsidies and based
on "front-end loading" are inequitable: FDF stresses
that reductions, both in export restitutions and in levels of
domestic support must be balanced and simultaneous. As well as
correlated reduction in the price of raw materials internally
(through CAP reform), externally the control of measures
having an equivalent effect to export refunds (such as export
credits, Food Aid or STE practices) must be tackled to the same
degree.
A coherent approach to the three key areas—market
access, export competition and internal support -is essential
"in order to establish a fair and market-oriented agricultural
trading system" (Article 20 of the Marrakesh Agreement)—while
maintaining sustainability.
Food and Drink Federation
April 2003
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