Appendix 2: Response from the European
Commission
Learning the lessons of Cancún
Process matters: Time, timing and organisation
The Commission agrees on the importance of process.
Although the failure of the Cancún ministerial was due
largely to substantive differences amongst Members, important
organisational and procedural shortcomings also contributed to
the breakdown. What is needed is a modest but feasible set of
organisational improvements to the WTO, focusing first and foremost
on the preparation and management of Ministerial conferences,
and other means to improve the efficiency and inclusiveness of
WTO negotiations and the decision-making process. It is important
that discussion of process does not become a distraction from
the substantive negotiations.
In relation to the conduct of Ministerial conferences
a key point is to ensure an earlier start of the negotiations:
For future Ministerial meetings, the EU suggests that the informal
negotiations at Ministerial level start immediately. We also want
the structure for negotiations and the complete agenda to be set
in advance of the Ministerial Meeting and in a way that all necessary
time is given to the actual negotiation of texts.
We also need a clear delineation of the role of the
Chairperson, the Director General and Members: The Cancún
'experience' suggests that key substantive decisions should be
taken in a more collective way so as to reflect the will of the
WTO membership. We also need to address the challenge for many
members, in particular those that do not have resident representatives
in Geneva, to cover the many issues on the WTO agenda.
With regard to the proposal that trade ministers
of Member States meet the EU trade Commissioner regularly, at
least daily, during WTO Ministerial meetings so that the Commissioner
can base his negotiating position on policies agreed collectively
by the trade ministers (paragraph 22), the EU trade Commissioner
negotiates on the basis of a mandate agreed with Member States.
There was very close contact between the Commission and Member
States—both at the political and official level—before,
during and after Cancún. Nonetheless a balance needs
to be struck between internal discussions and contacts with third
countries.
GEO-POLITICS MATTERS: NEW COUNTRY-GROUPS AND THE
FAILURE OF BRINKMANSHIP
The Commission recognises the importance of intensifying
contacts with groupings such as the G20 and G90 and welcomes the
Committee's conclusion (paragraph 27) that 'given the significant
barriers to South-South trade, negotiations and liberalisation
between developing countries must form part of a development round.'
Since the WTO General Council meeting on 15 December, where there
was a clear expression by all WTO Members of their political will
to continue the DDA negotiations, the Commissioner responsible
for Trade has travelled to Brazil for a meeting with the G-20,
to India, Bangladesh, Indonesia, and Kenya, met the G90 in Geneva
and attended the ACP-EU Joint Parliamentary Assembly in Addis
Ababa as well as holding other meetings in Brussels.
SUBSTANCE MATTERS MOST: THE SINGAPORE ISSUES, AGRICULTURE
AND COTTON SUBSIDIES
The Commission continues to believe that it is of
crucial importance, for developed and developing countries alike,
to create optimal conditions for cross border trade (trade facilitation),
to encourage an attractive climate for productive foreign direct
investment, to promote fair competition and the procurement of
the best goods and services for citizens at decent prices. The
EU sees no reason to abandon the fundamental and long run objective
of creating rules for these four issues as key drivers of the
global economy.
Support for Trade Facilitation and Transparency in
Government Procurement is widespread and there is no reason why
these issues should not remain part of the DDA Single Undertaking.
By contrast, we recognise that there is insufficient support
for the time being to pursue Investment and Competition within
the single undertaking. Given that, one option is to allow those
members that are interested in elaborating rules on these issues
to forge ahead. No WTO member should be forced to participate
in the negotiation process nor to subscribe to the results. But
equally no one should block others from moving forward, if they
want to do so.
On agriculture, the EU will continue to play a full
and constructive role, including through its own internal reforms
such as recent orientations for reform in cotton, sugar, olive
oil, and tobacco. A successful outcome of the negotiations will
however only be possible if other major players are ready to show
the same degree of determination to arrive at a fair compromise.
The Commission does not accept the Committee's view (paragraph
36) that there has been a lack of coherence between EU policies
on trade, development and agriculture: our duty-free and quota-free
access for least developed countries, the CAP reform decided in
June 2003 which firmly puts agricultural support on a less trade-distorting
path, our proposals in the DDA for market opening, disciplines
on domestic support, elimination of export subsidies for all products
of interest for developing countries, our support for a food security
box in the WTO are all firmly oriented towards meeting the interests
of developing countries. However, in addition to putting development
questions at the heart of discussions on industrial tariffs and
agriculture, there is a need for additional creativity in addressing
the particular problems of the smaller and weaker WTO members
including least developed countries, landlocked and small island
developing countries.
THE EUROPEAN COMMISSION AND THE EU'S MEMBER STATES:
MANDATE, COMMUNICATION, ACCOUNTABILITY AND TRANSPARENCY
With regard to the recommendation in paragraph 46
about publishing the agenda of the 133 committee, these agenda
are already available on the website of the Council of the European
Union at: http://register.consilium.eu.int
GOVERNANCE, ROLE AND SCOPE: THE WTO AND A DEVELOPMENT
ROUND
As noted above, the Commission agrees that there
is scope for modest organisational improvements in the short term
but that, as paragraph 52 of the Report says, now is not the time
for proposals that might distract from making progress on the
substance of the development round. In the medium to long term,
attention needs to be paid to issues such as the size of the WTO
secretariat, the role of its Director General, and greater involvement
of Parliamentarians and civil society in the work of the WTO.
Reviving a genuine development round
POST-CANCÚN PROSPECTS: BILATERALISM, TRANSATLANTIC
RELATIONS AND THE PEACE CLAUSE
The EU's objective in its bilateral relations, including
Economic Partnership Agreements with the ACP countries is indeed
developmental partnership (paragraph 54). Sustainability Impact
Assessments represent an important instrument in ensuring that
this is achieved.
With regard to the 'Peace Clause', comprehensive
negotiations on agriculture, resulting in an agreement acceptable
to all Members, risk being undermined if Members use litigation
in an attempt to challenge subsidies granted consistently with
the Agreement on Agriculture. A strategic choice has to be made,
in particular by the export oriented WTO Members, between multilateral
negotiations or WTO litigation.
WHAT'S ON THE TABLE?: THE DERBEZ TEXT AND THE SINGAPORE
ISSUES
We do not understand the Report's reference to a
'U-turn' on the Singapore Issues (paragraph 62). As set out above,
the Commission continues to believe that international rules on
these issues would be advantageous for developed and developing
countries alike. However it recognises that there is insufficient
support to pursue all of them within the single undertaking at
the current time. This should not prevent those countries that
wish to move forward from doing so.
THE EUROPEAN UNION AND AGRICULTURAL REFORM
The EU's offer to 'remove export subsidies for products
of particular interest to developing countries', does remain on
the table (paragraph 69). It is unfortunate that, in the year
since this proposal was made, no developing country has identified
the products it would prioritise. Of course the EU's offer is
conditional on the US and others' readiness to take equally comprehensive
commitments on their own export support programmes, such as surplus
disposal disguised as food aid, export credits, single desk arrangements
or the like.
The criteria for determining what forms of support
are included in the 'Green Box' are issues to be negotiated at
the WTO because this classification is part of the WTO agreements.
And support which causes little or no distortion of trade cannot
be subject to any capping or reduction. WTO Members should retain
the right to pursue key policy goals as animal welfare or environmental
protection through such support.
DEALING WITH DIFFERENCE: PREFERENCE EROSION, SDT
AND COHERENCE
We are ready to support the establishment of a specific
negotiating group on special and differential treatment, in line
with the recommendation in paragraph 80 of the Committee's Report.
POLITICAL LEADERSHIP
In response to the failure at Cancún, the
Commission initiated an extensive process of reflection and consultation
with Member States; with the European Parliament; with a broad
range of civil society representatives (NGOs, business and trade
union representatives); and with our third country partners, in
order to better understand views and build a sense of what needs
to be done if the process launched at Doha is to move forward
again. It welcomes the Committee's Report as a useful contribution
to the debate and looks forward to an ongoing dialogue as the
DDA negotiations move forward.
Commissioner Pascal Lamy
Directorate-General for Trade
European Commission
8 March 2004
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