August 14, 2003

Today the EU and the US presented a joint framework to relaunch agricultural negotiations. We have agreed that it is necessary for the two largest trading powers to develop a joint approach to the major issues dividing the WTO membership. It focuses on three areas, domestic support, market access and export competition. The joint paper reflects the great importance the EU and the US attach to their responsibility to pave the way for a successful and ambitious conclusion in Cancun and to provide added impetus to the cycle of trade negotiations.

Commenting on the results of the negotiations, Agricultural Commissioner Franz Fischler said: «Our WTO partners called on us to show leadership and asked us to come up with something constructive. We have now delivered. Backed by sweeping farm policy reform, the EU is ready to lead by example and to find common ground. I am very pleased that having worked with a spirit of compromise and determination, we and our US friends have been able to reach such a reasonable framework for the further negotiations. We look forward to continuing the work with all the WTO members, in the same constructive spirit, in the three weeks which remain before the Cancun meeting ».

Commissioner for trade Pascal Lamy said: "I am delighted that we have been able to reach agreement. This EC/US joint paper is just what is required to enable the WTO negotiations to change gear and move us into the final phase. The paper provides a solid and sustainable basis upon which to complete the agricultural negotiations which are, after all, the cornerstone to the Doha Development Agenda. Both the EU and US have committed themselves to concrete action in favour of DCs. Others must now do their bit to bring us down the home straight."

In reaching this agreement the two trading blocs show their commitment to the success of this round and their determination to close some of the gaps that have until now stalled the negotiating process on agriculture. Further gaps and obstacles remain ; it is now up to other WTO members to assume their responsibilities too by engaging in the negotiations in a flexible and constructive manner.

It is hoped that members will react positively to the fact that the EU and the US took the leadership to stimulate the negotiation process. This paper represents a balanced base for all members to engage in constructive negotiations and to demonstrate their commitment for further progress.

Focus on three pillars: domestic support, market access and export competition

In short : the paper deals with the « three pillars » of domestic support, market access and export competition, while making it clear that a number of other elements remain to be addressed. For each of the three pillars the paper provides an outline of how to carry the negotiations forward, while leaving the details, and in particular the extent of the future commitments, to be negotiated.

For domestic support, the paper provides for substantial cuts by all members who use trade distorting subsidies, recognising that those who subsidise more will have to reduce more, but ensuring that all make efforts.

For market access, there is a formula which takes on board both the formulas discussed to date (Uruguay Round and so-called “Swiss” formula), while fully preserving the elements of flexibility and recognition of the existence of sensitive products an element of great importance to developing countries.

In fact, recognising their importance to developing countries, flexibility and the recognition of the concept of sensitive products for reasons of development and food security are essential points in this paper. On top, a special safeguard is envisaged for developing countries to protect sensitive products from excessive imports. It goes without saying that this paper also provides for lower tariff cuts and longer implementation periods for these countries. In addition, the importance of existing and future preferential access for developing countries is recognised. Finally, there is a firm commitment from Developed Countries to provide duty free access for a certain percentage of their imports from DC.

On export competition, the framework paper provides several elements. Firstly, a clearly defined parallelism between the disciplines imposed on export subsidies refunds and exports credits. Secondly, it provides partial elimination of export subsidisation for a common list of product for of interest for DC. Thirdly, it provides a path for parallel reduction of export subsidisation for the products that are not eliminated. In addition to that, there will be clear discipline on food aid programs to prevent misuse and disciplines also on the transaction of state trading enterprises.

Finally, the paper notes a number of elements not agreed, including non-trade concerns and GIs.