Brussels, Belgium
February 21, 2003

DN: MEMO/03/41 Date: 21/02/2003

Authorisation of an additive (avilamycin) in feedingstuffs

The Council agreed to extend the provisional authorisation for use of avilamycin - an antibiotic preparation - as a growth promotor in feed for turkeys. Commissioner Byrne said that the granting of the authorisation of avilamycin does not in any way change the policy on the phasing out of antibiotics, which has been proposed for the end of 2005.

Official food and feed controls

Commissioner Byrne presented this essential piece of legislation adopted by the Commission on 5 February. (see COM(2003) 52 - IP/03/182 - MEMO/03/24). The proposed Regulation will streamline and reinforce the existing control system with added bite, consisting of stricter enforcement mechanisms. It is intended to address the deficiencies of the current rules: patchy and fragmented systems, lack of overall coherence and synergy, lack of definition of responsibilities, non understanding of our requirements by developing countries. The new legislation will improve the efficiency of Member State control services through better definition of tasks, harmonisation and integration of controls across the entire food and feed chain. It will define enforcement measures, including sanctions, and will assist developing countries. Commissioner Mr Byrne concluded by placing this proposal as the third and final and final element of the new food safety system foreshadowed by the White Paper of January 2000.

GMOs and co-existence

The Council held a discussion on co-existence. Commissioner Fischler noted that co-existence meant that farmers should be able to choose the agricultural production systems they prefer. "This will be particularly important once the authorisations of new GMOs resume and genetically modified crops are grown on a larger scale in the EU. What is at stake here are the economic consequences that conventional or organic farmers could incur if they have to sell their crops at a lower price because of adventitious presence of GMOs above the authorised threshold level. Of course, it can also work the other way round. If a GM crop has specific qualities and therefore sells at a price premium, admixture with non-GM crops could reduce its value.

Fischler announced that he would present a paper to the College on 5 March as a basis for an orientation debate on co-existence. "I hope that we will come out of this debate with some clear policy orientations and a concrete timetable for the future work. One thing that should be clear is that we all need to work together to find a realistic and sustainable solution to this highly complex issue. In order to facilitate this process, the Commission is organising a Round Table on co-existence at the end of April.

This Round Table shall provide an opportunity for discussion and an exchange of information among a wide range of experts and stakeholders." He further mentioned that the Commission was continuing to promote research activities in this area.

On GM food, Commissioner Byrne clarified that the Novel Foods Regulation remains the legal provision in force. New products would be looked at on a case by case basis. A technical meeting with member State experts will be held on 7 March to review all pending applications under the Novel Foods Regulation and to check which applications can be processed under the existing rules and which are likely to be converted into applications under the new legal framework. Commissioner Byrne emphasised that the purpose of this technical meeting was not to take decisions on any authorisations.

WTO and agriculture: debate on Harbinson paper

The Council held a debate on the ongoing WTO negotiations on agriculture. The Commissioner said "We had hoped that Mr. Harbinson would come forward with a paper which offered a possibility of at least starting to move the membership of the WTO towards an agreed position. Unfortunately, this was not the case.

Export subsidisation

"Mr. Harbinson proposes to phase out completely this policy instrument in nine years, with a significant down-payment. On the other hand, those WTO Members, and particularly the US, which use export credits or abuse of food aid to subsidise exports, in a totally trade-distorting way, are not asked in the Harbinson text to accept any comparable discipline. On the contrary, for export credits, there is what appears at first sight to be a proposal for an impressive framework proposed to discipline this form of trade distortion except that there are built in escape clauses.

"Similarly, for food aid there is what first appears to be a valid proposal to eliminate abuse of food aid for purposes of surplus disposal; except that here too, the system is porous, since a request from a beneficiary country (not necessarily justified), or the channelling through any private charitable body not a difficult thing to set up is exempted from disciplines.

"In short, for both export credits and abuse of food aid, the proposed disciplines have huge loopholes. These disciplines do not in any way compare to that proposed for direct export subsidies. The proposal does not, therefore, respond to the Doha commitment to discipline all forms of export subsidy.

Domestic support

"The Harbinson paper treats the blue box almost the same way as the amber box, which suggests that Mr. Harbinson considers the two forms of support amber and blue as comparably trade distorting. But the principle underlying the treatment of the blue box in the Uruguay Round was that support linked to production limitation was clearly less trade distorting than unlimited support. And recent OECD analysis has confirmed that this principle was correct, clearly demonstrating that the amber box is about four times as trade distorting as the blue box. Why then should blue box support be capped, and reduced at almost the same rate as amber box support?

"On the other hand, domestic policies using the most trade distorting policy instruments, with abundant use of the de minimis loophole, are in fact treated better. This is the case of the US, for example, where use of the de minimis provision in 1999 exempted a huge $8 billion from their reduction commitment, compared with their $16 billion notification under their ceiling. Given its trade distorting nature, we had proposed the elimination of the de minimis provision for developed countries. In the Harbinson paper this loophole is maintained with only a 50% reduction. So the most trade distorting form of support is in the end treated rather more gently that a form of support which is only one-quarter as trade distorting: how can this be reconciled with the basic objective of our negotiations?
And how does this represent a balanced approach?

Market access

"On market access, I regret to say that in our view, the balance between reducing tariffs and expanding access for developing countries that would characterise this round as a development round is lost. Further market access becomes an instrument to accommodate developed exporters, instead of a means to differentiate access for the benefit of the developing world.

Non Trade Concerns

"Finally, one the key objectives contained in the Doha Development Agenda (DDA) is absent from the Chairman's draft: apart from one single issue (animal welfare) the text appears to ignore the commitment to take non-trade concerns into account in the negotiations. There can be no doubt about the importance of these issues, not only for the EU but also for many other WTO members and for civil society in general. But in fact, none of these issues have received more than a cursory reference to the need to decide what to do with them! Indeed, on one issue investment for environmental purposes the proposal actually cuts back aid that up to now was permitted: where does that leave policies aimed at encouraging higher environmental standards a key non-trade concern amongst many Members? In other words, the reflection in Mr. Harbinson's paper of the real concerns of a significant number of members regarding non-trade concerns is simply lacking.

"In Tokyo we insisted on the need for a fair balance of interest if agreement is to be reached. This balance was lacking in the paper, which put the burden mainly on those who pursue policies which, while moving away from trade distortion, nevertheless reflect objectives linked to social, economic and environmental sustainability, and not just untrammelled free trade. The other main losers in the paper were the more vulnerable developing countries. The clear winners were the strong exporting countries, and those who have not shown the same commitment to move away from the most trade distorting form of support.

"But now the hard part starts. We have to continue to press for a draft modalities paper which is balanced but this clearly will need considerable movement, both on the part of Mr. Harbinson and of those members of the WTO who achieved all their objectives, and more, in the first draft at absolutely no cost to themselves. A comprehensive, realistic and balanced proposal is, I believe, what we should work to obtain. My conclusion is that we therefore need a "Harbinson Mark 2" which is more conceptual and more balanced.", Fischler stated.

There was broad consensus on the Commissioner's assessment.

CAP reform

The Council took note of a progress report on the CAP reform in the Council's working group and the Special Committee on Agriculture (SCA).

State aids Italy

Italy presented a request to authorise state aid for Italian co-operatives. In response, the Commissioner said that the exact scope of the request was not clear. "This should be clarified on the technical level. But I want to point out that the Council has exceptionally authorised € 100 million some years ago. Now Italy claims to need another € 118 million for the same problem. The Commission is afraid that these aids are granted without the necessary transparency and may lead to distortions of competition", he said.

The Council decided to refer the issue to the SCA for further discussion.

Bad weather conditions in Greece

Greece gave initial information on damage caused by adverse weather conditions in Greece. According to Greece, the extent of damage will be evaluated and presented to the Commission. Commissioner Fischler responded that once it was clear what damaged had been caused, the Commission would consider how to proceed.