Eurocommissaris Mandelson denkt na over bilaterale handelsverdragen met Zuidoost-Aziatische landen (en)

SPEECH/06/189

Peter Mandelson

EU Trade Commissioner

European Parliament, INTA Committee

Brussels, 21 March 2006

In these remarks to the European Parliament Trade Committee, EU Trade Commissioner Peter Mandelson tells the European Parliament that a successful Doha Agreement remains possible if all players accept the need to come together in an ambitious final move that reflects the needs of all players. He argues: "the time of incremental steps, small moves and small concessions, is over".

On Brazil and India:

"Brazil and India accept that this cannot be a Round for free for themselves, but their rhetoric does not, at present, match the contribution they need to make. This was highlighted in the discussion on industrial tariffs, where Brazil and India are reticent about adopting a sufficiently ambitious formula to secure cuts in applied tariffs across the board in advanced developing countries. Brazil, on the other hand, accepted that all parties would have to see some real cuts of tariffs in products of interest to them. This is an important, albeit so far unfulfilled, signal."

On the EU agriculture offer:

"Most key WTO Members have now understood that Europe's agricultural offer of October 2005 has real value. However, certain Members continue to expect more from us on agricultural market access. As I have always said, we are ready to continue to play a constructive role in the Round, including on agriculture, but we need to see real cuts in industrial tariffs - at less than full reciprocity between developed and developing - and we need to preserve the Single Undertaking outside of agriculture and industrial goods.

On `deadlock' - or not

I have set out in some detail the positions and expectations of the different players in order to demonstrate the progress that is still to be made. It may sound like deadlock. But I do not believe it needs to be. I think it is important that each of us puts himself or herself in the shoes of the other. We need to understand the pressures on and aspirations of our partners. Everyone's position is reasonable if looked at from where they themselves are standing. It is not about forcing others to move to our position. It is about understanding where everybody stands and then seeing how our positions can be brought to meet in the middle in a way that brings sufficient gain to us all.

On the next steps in the DDA:

We have, in my view, reached a new phase in the process of this negotiation. Since we are approaching the end phase in the DDA, we now need to deal with all negotiating areas simultaneously. There is a limited number of cards left on the table - and they are the big ones. They cannot be played in isolation. The lesson of the London meeting is that the time of incremental steps, small moves and small concessions, is over."

On the new Carnegie Endowment Study: "Winners and Losers: Impact of the Doha round on Developing Countries".

"The Carnegie research reminds us that the bulk of the benefits of agricultural liberalisation are limited to developed countries and a core group of highly competitive farm exporters - especially Brazil, Argentina and South Africa, and that exemptions from tariff cuts, policy space to support agricultural development and small scale farming, and the impact of preference erosion in poorer developing countries when faced with steep farm tariff reductions in the developed world should be taken into account. For all these reasons, the Carnegie research suggests that the key gains for developing countries in the DDA lie not in agriculture but in trade in industrial goods, especially in labour intensive industries like shoes and textiles. These are arguments that the EU has long accepted and that others - including some in the NGO community - would do well to absorb."

For more on the Carnegie Endowment study "Winners and Losers: Impact of the Doha round on Developing Countries" visit http://www.carnegieendowment.org/publications

DDA

Today, the EU finds itself in a better position than it was before the Hong Kong conference. Both at the Hong Kong Ministerial, and over the past two months, we have maintained a consistent stance regarding our interests in the Doha Round. As a result, Members now realise that a new EU agricultural offer is not currently in the making, and most importantly that the success or failure of the Doha Round does not, and cannot, depend on this one factor only, but on a balanced agreed package that embraces the whole of the Doha Single Undertaking.

During the last two months Mariann Fischer Boel i and I, as well as our Senior Officials, have had intensive contacts with the main players in the Round. This has allowed us to clarify positions. On 10 and 11 March, I hosted and chaired an informal gathering with Ministers from EU, US, Brazil, India, Australia and Japan in London. It was a useful meeting. Our aim was to narrow further the gaps between our positions on core issues, and to prepare for a potential agreement on the main tariff and subsidy reduction formulae and numbers by the end of April - as foreseen in the Hong Kong Declaration.

As we knew in advance, the London event did not lead to a headline breakthrough in the talks. However, we achieved some convergence on the structure of the formulae.

The US showed readiness to engage on the issue of domestic support in agriculture, but without moving at this stage and while maintaining its high demands in agricultural market access from the EU and developing countries as "payment" for reforming their domestic farm sector and disciplining its trade distorting subsidies.

Brazil and India accept that this cannot be a Round for free for themselves, but their rhetoric does not, at present, match the contribution they need to make. This was highlighted in the discussion on industrial tariffs, where Brazil and India are reticent about adopting a sufficiently ambitious formula to secure cuts in applied tariffs across the board in advanced developing countries. Brazil, on the other hand, accepted that all parties would have to see some real cuts of tariffs in products of interest to them. This is an important, albeit so far unfulfilled, signal.

Apart from strong resistance to losing "policy space" in setting tariffs, there are two further factors holding back Brazil and India from making serious offers: first, they want to know more precisely what they will get in return in agriculture from us and, perhaps, even more from the US and, secondly, because they fear China's capacity to take the greatest advantage of any lowering of tariffs.

Most key WTO Members have now understood that Europe's agricultural offer of October 2005 has real value. However, certain Members continue to expect more from us on agricultural market access. As I have always said, we are ready to continue to play a constructive role in the Round, including on agriculture, but we need to see real cuts in industrial tariffs - at less than full reciprocity between developed and developing - and we need to preserve the Single Undertaking outside of agriculture and industrial goods. I have set out in some detail the positions and expectations of the different players in order to demonstrate the progress that is still to be made. It may sound like deadlock. But I do not believe it needs to be. I think it is important that each of us puts himself or herself in the shoes of the other. We need to understand the pressures on and aspirations of our partners. Everyone's position is reasonable if looked at from where they themselves are standing. It is not about forcing others to move to our position. It is about understanding where everybody stands and then seeing how our positions can be brought to meet in the middle in a way that brings sufficient gain to us all.

I want to draw your attention to a study published this month by the Carnegie Endowment entitled "Winners and Losers: Impact of the Doha round on Developing Countries". This excellent study is essentially a warning. It cautions against seeing simple liberalisation in the Doha Round as a panacea for development.

The Carnegie research reminds us that the bulk of the benefits of agricultural liberalisation are limited to developed countries and a core group of highly competitive farm exporters - especially Brazil, Argentina and South Africa, and that exemptions from tariff cuts, policy space to support agricultural development and small scale farming, and the impact of preference erosion in poorer developing countries when faced with steep farm tariff reductions in the developed world should be taken into account. For all these reasons, the Carnegie research suggests that the key gains for developing countries in the DDA lie not in agriculture but in trade in industrial goods, especially in labour intensive industries like shoes and textiles. These are arguments that the EU has long accepted and that others - including some in the NGO community - would do well to absorb. The EU accepts that agriculture is important to the Doha Round but that farm liberalisation is not synonymous with development in the broadest sense.

Let me now turn to next steps in the DDA. We have, in my view, reached a new phase in the process of this negotiation. Since we are approaching the end phase in the DDA, we now need to deal with all negotiating areas simultaneously. There is a limited number of cards left on the table - and they are the big ones. They cannot be played in isolation. The overall conclusion of the London meeting is that the time of incremental steps, small moves and small concessions, is over. A new negotiating approach has to be considered that concentrates on the real numbers and the real trade offs that need to be made across the board.

This requires an intensification of quiet contacts with key partners to map out potential final packages. At the same time, we must continue to reach out to the entire WTO membership, in particular with the LDCs and the mid range developing countries to build multilateral consensus. Pascal Lamy has a crucial role to play here. The truth is that the initial negotiating breakthrough can only be made by a relatively small group of key players. But when it comes, it must serve the interests of all WTO members - and especially the LDCs.

In these difficult conditions, and while we have to be realistic in calculating what is reasonable to expect from developing countries, I continue to believe in, and fight for, a substantial outcome of the Round. Our objectives and our ambition remain unchanged: creating genuine new business opportunities in agricultural and industrial products and services in developed and advanced developing countries, as well contributing to development, restructuring trade in agriculture, and strengthening multilateral rules.

These objectives can only be reached through a broad and ambitious Round. We are paying into the Round with proposed real reductions in agricultural tariffs as well as trade distorting subsidies, if they are matched by real cuts in industrial tariffs and genuine additional services liberalisation.

Even though this is becoming increasingly challenging, we will continue to work towards deadlines agreed in Hong Kong, like the one to agree on modalities for agriculture and industrial tariffs by end April. At the same time we will ensure that other issues in this Round that will take longer, such as services, rules and GIs, remain part of the Single Undertaking.

We will continue to inform and consult the EP on the major developments in this Round, and I look forward to having a broader debate on the DDA in the Plenary session in April in Strasbourg on the basis of the report of Georgios Papastamkos.

Rethinking our policy on FTAs.

The multilateral trade round in the WTO continues to be our priority and I remain firmly convinced that the greatest benefits for all derive from trade liberalisation in the broader WTO context than from a puzzle of bilateral deals. To focus attention on the DDA, the EU decided some time ago not to pursue any new FTA negotiation, except for those already launched or decided upon. Depending on the progress/outcome of the DDA this policy may have to be reconsidered. In any case, once the Doha negotiation is completed, we shall need to review our priorities.

I have recently begun an internal reflection on the orientations of a future work programme on bilateral policy. Also, I have launched a Vision Group with ASEAN and a High Level Task Force with India to look into the possibilities of potential bilateral- or bi-regional trade deals.

Let me stress, this is only reflection at this stage. I have not reached my conclusion and I have not made any recommendations. A key consideration is that the current geography of FTAs responds mainly to development and neighbourhood motives, but may not match well the EU's main economic interests, which we so far have chosen to pursue multilaterally or through various regulatory initiatives with countries such as US, China, Japan, ASEAN or Canada. In this light, securing effective market access for European goods and services to emerging economies such as those in Asia is high in our list of priorities.

We are also watching closely regional developments, particularly progress of the numerous FTAs others are working on in Asia. Although most of these FTA initiatives have not yet been concluded, including the ones by our main competitors, we are assessing the potential impact of these FTAs on EU interests in Asia.

We are also exploring the willingness of possible future FTA partners to make serious commitments. FTAs are no "quick fixes": there would be no reason to start FTA negotiations unless we know they can be concluded within a reasonable time-period and with a high level of ambition that makes them commercially meaningful. For us, any future FTAs must be WTO-compliant and provide for deep integration.

Euromed relations ahead of the Marrakech Trade Ministerial

The 10 years of the Barcelona process have made an important contribution to economic integration and trade liberalisation in the EuroMed zone. Through trade liberalisation we have managed to overcome political sensitivities and start integrating economies.

We now have a network of Association Agreements between the EU and the Med countries and Free Trade Agreements between the Med partners. We are encouraging progress on South-South integration, through FTAs between the Mediterranean countries.

South-south integration will be one of the key messages of the Marrakech Trade Ministerial, gearing up efforts towards a regional free trade area by 2010. This objective was confirmed by the ten year EuroMed anniversary summit in Barcelona at the end of last year.

The Ministerial will also push forward work on origin cumulation, standards, trade facilitation and services.

The main achievement of the Marrakech meeting will I hope be the opening of negotiations with a first group, in fact most, of southern Mediterranean countries to liberalise services and establishment. This has the potential, in particular if complemented by south-south liberalisation, to open up significant economic potential in the region.

Marrakech will also be an opportunity to strengthen alliances on DDA ahead of April deadline.