WORLD TRADE
ORGANIZATIONG/AG/NG/W/24
11 July 2000
(00-2824)
Committee on Agriculture
Special SessionOriginal:  English
SECOND SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
29-30 JUNE 2000
Statement by the European Community
Introduction of EU Papers
The present negotiation is based on Article 20. Under Article 20, the first stage of the
negotiation is to be the examination of the effect s of the application of existing commitments.  This
has been the principal objective of this week’s m eeting.  The Community's intention is to submit its
comprehensive negotiating proposal when this process is over and by the end of this year.
We have, however, submitted papers to prepare the ground for parts of our proposal, on
subjects when our position has not been well understood - or where it has been misrepresented.  These
subjects we have covered are the Blue Box;  food quality and animal welfare.
1. On animal welfare  the Community position has been constantly misrepresented.  We are not
seeking to protect animals at the expense of human welfare.  We are not seeking pretexts for
new trade barriers.  What we are trying to ensure is that the progress of trade liberalization
can take place without damaging the progress which the Community and many other
members of the WTO have been making to ensure that animal production takes place under
reasonable conditions.  In saying this we are not making attacks on any one, least of all
developing countries, who typically do not indulge in the kind of factory farming which EU
legislation seeks to regulate.
2. On food quality , we are not – as some delegations appear to think – trying to justify
additional tariffs for food with special quality characteristics.  On the contrary, what we are
seeking, as part of the process of opening up markets, to ensure that producers and consumers
can be protected from misleading labelling as a result of which high quality food which aretypical of particular regions are confused with imitation products bearing the same name.
What we want is to maximise the gains from tr ade, which is the fundamental objective of the
WTO itself.
3. On the Blue Box , our papers make clear, on the basis of objective studies by the OECD, that
transferring from trade distorting Amber Box measures to Blue Box measures based on fixed
payments makes a valuable contribution to reform .  This objective analysis stands in contrast
to the position of those who want to abolish the Blue Box simply because they do not use it. I
suggest that this is not the best way for member s to judge their interests.  All stand to gain
from the reform process which Blue Box measures facilitate, even those who do not use them.G/AG/NG/W/24
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On the US Proposal
As I said when I introduced the EU proposals, we believe that it is better to submit
comprehensive proposals after the stage of analyzing the effects of existing commitments has been
completed. Nevertheless, we are interested in the US proposal and will study it carefully. What I will
give now are preliminary reactions.
We welcome the fact that the US now shows a keen interest in the subjects which we group
under the phrase "multifunctionality", although for some reasons they do not like using the word.
This should help to advance the negotiations because it means that we should be able to concentrate
on how the multifunctional role of Agriculture can be safeguarded not whether it can be safeguarded.
For the rest, however, I have to say that we find the US proposal disappointing.  On export
subsidies, their proposal is that the kinds of export subsidy in which the US has less interest should be
eliminated, but that nothing, or less drastic action, should be taken on export assistance given throughmechanisms which the US does use, in particular export credit and loan deficiency payments.
On tariff reductions, the proposal tries to place the main burden of adjustment on those with
higher tariffs than the US.  And they want to abolish the special safeguard clause, which allows a
flexible and targeted response to be taken when markets are disrupted by unusual volumes of trade or
unusually low prices, whilst they continue themselves to use the general safeguard clause to imposehighly trade disruptive measures, for example in relation to wheat gluten, - for what is more disruptive
than a fixed volume limit?
And as regards to support programmes, the proposal is to set levels of support based on the
value of production.  This method is obviously designed to favour countries in which large farmers
produce large quantities and to attack countries whose support is designed to look after the interests oflarge rural populations of smaller farmers.  And, although the proposal suggests that the Green Box
should be revisited, it attacks the Blue Box, even though fixed per hectare payments granted under the
provisions of the Blue Box are, according to the OECD study, no more distortive than fixed per
hectare payments made under the Green Box.
I see that many press stories have portrayed the US proposal as being specifically directed
against the EU.  I do not myself see it that way or criticise it for that reason.  The EU is, in fact, not
the one which would be most hurt by the US proposal were it to be adopted. I criticise it because:
1. it is not faithful to the existing agreement on Agriculture which commits all parties to
progressive reform, which implies that all should move in a similar fashion;
2. it is not helpful to the negotiating process because it demands more from some than from
others. For this reason, it does not seem to me to facilitate a generally acceptable compromise.
On the two papers on Special and Differential Treatment
These two papers have only just been made available and we will need to study them.
Therefore I have just two preliminary remarks.  First, the Community starts by the principle
of special and differential treatment for developing countries.  We are already the world's biggestimporter of the products of developing countries, in part as the result of our extensive range of tariff
preferences for such countries.  And we want to see all developed - as well as, so far as possible, the
most developed developing countries - give tariff free treatment to essentially all imports from the
least developed countries.G/AG/NG/W/24
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Second, we are concerned to see in this proposal the suggestion that developing countries
should move away from trade liberalization.  Trade liberalization increases wealth both for exporters
and for importers.  We recognize that it poses transitional problems and that it should not proceed
faster than the pace at which they can be overcome.  But we do not think that it can be beneficial to
developing countries to move away from liberalization which has already taken place.
On the Cairns Group Paper
The Community position is that we are prepared to negotiate reductions in export subsidies
provided that other forms of export support are treated in a similar fashion.  We note a certain
ambiguity in the Cairns Group Paper.  In some places, it seems to attack all forms of export support.
In others, it attacks only export subsidies.  We cannot accept a negotiation which deals only with
export subsidies as this is clearly discriminatory.
On the Canadian Paper
1. This is a thoughtful and detailed paper which we will wish to study carefully.  However, it
seems to me that several of the points it makes can only be assessed when we have studied the
problem of tariff quota administration.  Indeed I note and welcome that the paper says that the
issue needs to be addressed.
2. The problem is not only one of quota fill.  It is also a question of what administrative means
can be taken to deal with the problem of excess demand to participate in a tariff quota.  This
problem is, of course, more acute when the quota rent is high.  For this reason, I would not
think that it would be a good idea to discuss reductions in quota tariff rates which would, of
course, increase quota rent until we have a clear understanding of what can and what cannotbe done to resolve this.
3. I would suggest that we reflect carefully on the procedure by which this issue can be
addressed.  Well over one thousand tariff quotas have been notified to the WTO We must
have clear rules on their administration.
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