What EU Offers to Developing Countries

Manila Bulletin, April 14, 2004 | Go to article overview

What EU Offers to Developing Countries


Byline: Commissioner FRANZ FISCHLER

WE will only make headway in Doha Development Agenda if developing countries are convinced that they are not getting a rough deal from the World Trade Organization (WTO) and trade liberalization. If the poorer countries are to benefit, they need much better market opportunities, they need support to meet international production standards, they need a steep cut in trade-distorting agricultural subsidies in rich countries, including the European Union (EU), they need special treatment.

That is precisely what the EU is proposing.

Contrary to what many believe, the European Union is not a fortress. The EU is the worlds largest customer for farm products from developing countries, importing as much as the US, Japan, Canada, Australia, and New Zealand taken together. The EU alone absorbs around 85 percent of Africas agricultural exports. And the average tariff for imports of farm goods to Europe is 10.5 percent, whereas the average tariff in Brazil is 30 percent and among developing countries 60 percent.

But, no doubt, we still can do more and better.

So, what is the EU offering?

1. We are ready to completely eliminate our export subsidies for products of interest for developing countries. This is a major shift in the EUs position. Our only condition is that other forms of export promotion, which equally harm developing countries, such as US export credits and export support in the guise of "food aid," or Canadas and others state trading monopolies have to go as well.

2. Developing countries should have the right to cut their tariffs and trade distorting farm subsidies considerably less and over a longer period.

3. We want a "food security box" to help developing countries meet their justified concerns on sensitive agricultural crops, while a special safeguard instrument should ensure their food security.

4. Developing countries should also need the possibility to support their agricultural sector for developmental reasons.

5. All industrialized countries shall give completely duty and quota free access to their markets for exports from the 49 poorest countries in the world. The EU has already made this step, now it is time that the other industrialized countries follow our example.

6. We further propose that industrialized states shall grant zero duty access to at least 50 percent of their imports from the remaining developing countries.

7. And the EU finally offered to address tariff escalation, which undermines to such a significant extent the ability of developing countries to develop value-added exports.

We also have to address cotton in the WTO talks. African cotton has already free market access in the EU, we do not pay any export subsidies and are with 2 percent of the worlds production price takers, not price makers. In general access to a number of other major markets has to be improved. We must also continue our efforts to reduce trade distorting support within the ongoing WTO Round. Europe is ready to do its part. We are about to take a decision to make our subsidies for cotton trade friendly. I hope that other rich countries will follow the EUs lead.

But facilitating trade alone is not a sufficient answer.

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