WTO deal on food products worries EU farmers

EU officials involved in the World Trade Organization’s Doha round of global trade talks reached an outline deal this month with counterparts from a handful of other big WTO countries on how to treat “sensitive” farm products. “What we are most concerned about is the impact on meat because of the sector’s importance in Europe,” said Shelby Matthews, head of trade at European farmers group COPA-COGECA.

Sensitive products are one of the keys to a long-elusive WTO deal that would lower barriers to global trade in industrial goods and services as well as agriculture, and which could give the world economy a boost just as fears grow of a slowdown. The sensitive products agreement is still largely under wraps but people familiar with the talks said it would mean new competition in the EU’s long-protected farm markets, especially in beef, pigmeat, poultry, dairy, sugar and cereals. EU farmers want to classify those products as sensitive, shielding them from the full impact of the import tariff cuts. But, as a way of compensation, the EU would have to agree to fixed-volume quotas of imports of those products which would come in at lower tariff levels, or in some cases at no tariff.

WTO ministers are expected to gather in Geneva in May for a potentially make-or-break attempt to strike a long-elusive trade deal covering industrial goods, services and agriculture. The deal on sensitive goods -- agreed by the EU, the United States, Canada, Japan, Australia and Brazil -- has yet to be put to the WTO’s wider membership. Signs emerged this week of differences among the six over the small print of the agreement. “It remains to be seen if this deal can stick,” said an EU diplomat, speaking on condition of anonymity. European farming groups are ramping up their protests against the EU’s offer in the negotiations. Irish farmers plan demonstrations when European Commission President Jose Manuel Barroso visits Dublin on Thursday.

 
MEAT PRODUCERS SEE THREAT
The deal’s broader principles alarm the EU’s farming groups. For example, the EU has agreed to use historical consumption data to calculate import quotas for sensitive products, dropping its insistence on using much lower import figures. Quotas would be equivalent to 4-6% of EU consumption of products in question, said COPA-COGECA’s Matthews. At 4% of consumption, imports of beef into the bloc will more than double to over 1.2 million tons a year, with Brazil and Argentina most likely to benefit as major exporters.

Europe will be able to classify 4-5% of tariff lines as sensitive, down from 8% it originally wanted. But Brussels saw off a move by the exporters which would have made sensitive product import quotas much larger by basing them on consumption data for entire categories, and not just specific lines classed as sensitive, Matthews said. However, import quotas for sugar, rice and cereals will be bigger than the EU had hoped for, she said. The Doha round was launched in 2001 but it has hit a string of impasses and without a breakthrough very soon it could be delayed by several more years, negotiators say. (Reuters)