BRUSSELS, Sept 7: European Union trade officials attending the World Trade Organization’s ministerial meeting in Cancun, Mexico, as of Wednesday are in fighting mood. Most expect the toughest EU battles to centre on agricultural trade liberalization. But the bloc’s controversial demands for stricter protection for so-called geographical indications or European regional food and drink brand names and insistence that the WTO launch negotiations on cross-border investments and competition policy also look set to spur trouble in Cancun.
The burly EU farm commissioner Franz Fischler will talk toughest in Cancun. Long-criticized for its costly agricultural policies and for dumping food on world markets the EU is notorious in the WTO for obstructing global farm trade liberalization and protecting its domestic markets. Mr Fischler can again expect to occupy the hot seat in Cancun.
Striving to offset Fischler’s hard-talking “bad cop” routine will be “good cop” European trade chief Pascal Lamy, widely respected in the WTO for his expertise on world trade, negotiating skills and pro-development views. Mr Lamy along with US Trade Representative Robert Zoellick played a key role in helping launch the WTO’s current Doha Development Agenda in the Qatari capital in November 2001. And like his US counterpart, he wants a WTO deal before he leaves office at the end of next year.
Expect the Fischler-Lamy dual act to be in much evidence in Cancun. In a dry-run in Brussels this week for the difficult days ahead in Mexico, Fischler and Lamy played it alternatively hot and cool on different aspects of the daunting WTO agenda.
The ever-rational Lamy focused on the bigger picture, insisting that the Doha trade round must be completed in time to bolster a faltering world economy. “Cancun will work if we leave with the sentiment that we have gone half way in completing negotiations next year,” he said prudently, painstakingly explaining the different issues up for discussion at the meeting.
But with agriculture expected to be the make-or-break issue in Cancun, expect much of the spotlight to fall on Fischler. The EU farm chief has been arguing for several months that the EU domestic farm reform package agreed in June this year will give it a stronger hand at the Cancun ministerial. Brussels further reinforced its stance last month by forging a joint text on farm issues with the US for presentation to the WTO.
However, reaction to the transatlantic farm blueprint has been less-than-enthusiastic from other WTO members. Farm-exporting nations grouped within the Cairns Group led by Australia as well as China, India, South Africa and Brazil have complained that the EU farm package does not go far enough, with Europeans still paying too much money to their farmers and access to European markets still hampered by too-high tariffs.
Officials in Brussels are angry and have made it clear that they are going to fight back — with a vengeance.
Brazil, China and India are front row in Fischler’s verbal firing line for having made “extremist” demands for further farm reform. The three nations, which have rallied other developing countries behind their calls for further reform efforts in the EU and the US while ruling out big cuts in their own barriers, were crying for the moon, Mr Fischler told reporters, adding: “I cannot help the impression they are circling in a different orbit. If they want to do business, they should come back to mother earth.”
Pro-development activists who have denounced the billions of euros in subsidies that the EU pays out to the farmers were “cheap propagandists,” Mr Fischler raged. “We will vigorously defend our right to support farmers, the EU farm chief insisted, arguing that the EU was rich enough to spend money on cows, hospital beds and fancy trees in parks.”
Mr Fischler’s verbal onslaught, however, is unlikely to impress critics, long used to EU double-talk on agriculture. And while farm trade may be its Achilles heel, the EU is also vulnerable on other fronts.
Several WTO members are up in arms at European demands for stricter global rules to protect so-called geographical indications or European regional food and drink brands, saying the move smacks of protectionism. India, meanwhile, remains fiercely against EU calls that Cancun should kick-start negotiations on investment rules.
Developing countries’ demands that rich nations slash tariffs on imports from poor nations have also put the EU on the defensive. European and American tariffs on products from India or Bangladesh are sometimes four to five times higher than on products from other rich countries, Oxfam, the independent aid agency said recently. Duties on processed goods are also higher than on raw materials, making it more expensive — and more difficult for developing countries to export their manufactured products to Western markets.
For all their strident declarations, however, EU negotiators say they are going to Cancun with an open mind and a readiness to compromise. Unaware of the irony of his comments, however, Mr Fischler has warned rather ominously that everyone will have to make an effort and that so far he sees “no flexibility on the part of those who shout loudest.”































