APPENDIX 3: SUMMARY OF KEY CONCLUSIONS
FROM THE COMMITTEE REPORT ON THE WORLD TRADE ORGANISATION: THE
ROLE OF THE EU POST-CANCÚN (16TH REPORT, SESSION
2003-04, HL PAPER 104)
The context of our Inquiry
We recommend that the Government continues to pursue
further trade liberalisation as an important policy objective.
The continued removal of trade barriers will lead to greater economic
growth and jobs around the world.
United Kingdom and EU interests in the Doha Round
If United Kingdom companies are to compete effectively
in world markets they need to make use of the most competitive
sources of supply, including global outsourcing where this makes
good business sense.
We support the EU's recent offer to "move"
on export subsidies. The EU should negotiate on the basis that,
as long as others follow suit, it will firmly commit itself to
phasing out its agricultural export subsidies by a specified date
The Doha Round should aim for the elimination or
significant reduction of industrial tariffs, although developing
countries should have longer implementation periods.
The United Kingdom should press for a wide-ranging
EU approach to the Doha Round aimed at tackling the main barriers
to trade in services.
The EU must put the failure of Cancún behind
it and work for agreement by the end of July 2004 on a framework
for negotiations in order to secure a successful outcome to the
Doha Round by early 2006.
The changed landscape of negotiations
The EU, along with other WTO members, needs to adapt
to the changes taking place in world trade negotiations. In return,
leaders of the G20 and G90 need to recognise their responsibility
in contributing to the re-launch and successful conclusion of
Although the growth of South-South trade over the
last decade has been substantial, there remains considerable potential
for further liberalisation. The recent agreement between India,
South Africa and Brazil is an encouraging sign. This Committee
strongly supports the extension of such agreements to the less
We accordingly recommend that:
- a framework for the Doha Round negotiations must
be agreed by the end of July 2004;
- a firm date of early 2006 must be set as the
target date for the end of the Doha Round negotiations.
The EU does not need to attempt to determine at this
stage the final outcome of negotiations on the contents of the
domestic support boxes. However, having established a credible
system of subsidy classification in the Uruguay Round, WTO members
including the EU should avoid re-opening the boxes in the context
of the Doha Round.
We support the EU's willingness to negotiate on the
elimination of all export subsidies. The EU should proceed on
the basis that, in line with the Doha declaration, all WTO members
should phase out all export subsidies or equivalents by a specified
date. We recognise that the timetable for individual products
remains for negotiation.
Export subsidies and measures of equivalent effect
are of course not limited to the EU. In that context the EU should
maintain its demands that the US and other developed countries
must also phase out the subsidy element in food aid and export
We support the principle of South-South trade and
would be keen for further discussion to help remove existing obstacles
to such trade. In particular, we recognise the potential for South-South
trade to benefit those developing countries who will be disadvantaged
by the agreements that are likely to be necessary on market accessas
is the case for the ACP countries.
Market access may well prove the most difficult of
the agricultural issues to resolve. For the re-launch of the Doha
Round the EU will have to be flexible in negotiations over alternative
formulas to be adopted in working out reductions in tariffs and
other forms of agricultural protection. A final settlement to
conclude the Doha Round will require the EU to move further in
improving market access for agricultural imports than it has so
far been prepared to do.
We strongly support use of the WTO to provide practical
and effective means for agricultural liberalisation. The EU can
no longer postpone action on difficult issues. Every effort should
be made to reach agreement within the Doha Round.
The United Kingdom should continue to exert pressure
on her EU partners over agricultural reform, encouraging them
to go further as quickly as possible. Spending has been agreed
for the CAP budget up to 2013. This ceiling should be seen as
the outside limit, and must not be exceeded.
In order to re-launch the Doha negotiations the EU
- proceed on the basis that it will commit to the
phasing out of all export subsidies by specified dates, on the
understanding that other WTO member countries do the same.
- Show the necessary flexibility to ensure that
a formula (without precise figures at this stage) is agreed for
reducing tariffs on agricultural imports.
In order to bring the Doha Round to a successful
- The precise timetable for phasing out export
subsidies by product will need to be negotiated.
- EU reform of the sugar regime is an opportunity
to demonstrate real commitment to liberalisation, and should proceed
as quickly as possible.
- The EU will need to commit to greater market
access for agricultural imports than it has so far been prepared
We believe that the EU's approach should be to:
- drop some Singapore issues from the Single Undertaking,
- press for a consensus to launch negotiations
on trade facilitation and on transparency in government procurement
within the Single Undertaking, and
- if any or all of the issues are excluded from
the Round, explore progress on a plurilateral basis.
Multilateral and bilateral approaches
We conclude that there is no inherent contradiction
between multilateral and bilateral approaches, and that the bilateral
route can add value as long as it does not replace multilateral
We recommend that the EU should continue to prioritise
and push for gains in the multilateral WTO forum, given the greater
gains that are achievable.
Formulation of EU trade policy
We do not believe radical changes are required in
the way EU trade policy is formulated and executed. However, the
Commission should maintain and if possible increase the flow of
information and consultation on trade policy.
We do not see a compelling argument for increasing
the formal powers of the European Parliament. Doing so would risk
slowing down and politicising what is already a difficult negotiating
process within the Doha Round. Furthermore, comparisons with the
Fast Track authority in the United States highlight the potential
danger for the European Parliament to become a lobby for protectionist
interests, and thus for anti-liberalisation voices.
We recommend that there should be strong continuing
dialogue between the Council, Commission and Parliament on trade
policy, but that the formal powers of the European Parliament
should not be increased.
There is scope for the United Kingdom to use its
influence within the EU to make the case for agricultural reform.
The Government should also use its strong links with the US to
encourage them to look seriously at reforms to their own agricultural
sector in order to get the Doha Round re-launched. The Government
should continue to use its connections with individual Commonwealth
countries in order to encourage progress on Doha.
We urge the United Kingdom Government to use its
connections with the US, Commonwealth countries and others to
press for progress within the Doha Round.
Role of WTO in global governance
The WTO should not be held responsible for failure
to achieve non-trade objectives nor blamed for policy shortcomings
elsewhere. But the WTO membership should acknowledge that its
agreements have implications for other policy areas. Efforts to
achieve international standards on labour and environmental protection
should be pursued by national governments in other fora.
Role of NGOs in multilateral trading framework
We welcome NGO contributions to a broader debate
on trade policy and their assistance in capacity-building in developing
We are not convinced by the arguments of those NGOs
who try to call in question the benefits which globalisation and
trade liberalisation offer to developing countries.
NGOs should be transparent about their aims and accountable
for their actions when advising developing countries on trade
Reform of the WTO
We therefore recommend that:
(i) in the short-term, the WTO should focus on
procedural improvements which would make it easier for substantive
agreements to be reached, notably better preparation and organisation
of ministerial meetings;
(ii) other, more major reforms of the WTO, relating
to the Secretariat and Director-General, should be addressed only
after the successful conclusion of the Doha Round.