Sumario: 15 September 2008, Brussels - Speech by EU Trade Commissioner Peter Mandelson addressing the European Parliament's INTA committee on trade
EU Trade Commissioner Peter Mandelson has addressed the European Parliament's INTA committee on trade, and told them that the European Union will continue to engage firmly in the process of talks in Geneva over the Doha Development Agenda.
Mandelson stressed that a definitive collapse of the Doha Round would seriously dent confidence in the WTO's system of trade rules and future market openness, and have a significant knock-on effect on the multilateral system as a whole. It would come exactly at the wrong moment and weaken prospects for other international negotiations like the important climate change negotiations. He noted that there is no 'plan B' to secure a Doha deal which the world economy still needs for many
reasons.
Mandelson said that the EU priority is to negotiate in good faith on the basis of the July package, which remains the only possible basis to move the discussion forward. The package has the potential to deliver some real new market access in industry both in developed and in developing countries, especially China, as well as locking in the Swiss formula at the WTO and putting a cap on any raising of tariffs by developing countries in the future. The package also includes Services, and key
partners had demonstrated engagement on key sectors in a Signalling conference in Geneva in July. Mandelson also reminded that the package respects all the EU's red lines in agriculture. Sustaining what was on the table in July is important to Europe as well as to the developing countries to whom it extends vital new trading opportunities. A round concluded on this basis would reduce world tariffs by a half and while developing countries would contribute one third of the savings, they would
benefit from two thirds of increased market access.
Address to the European Parliament INTA Committee on the Doha Development Agenda, by EU Trade Commissioner Peter Mandelson
The July Doha ministerial meeting was the longest ever in the history of the WTO. Contrary to what many feared there was real political engagement, from all players. After a full week, we actually had an outline agreement on the vast bulk of issues that needed sorting out to conclude full modalities.
However, the talks broke down over a single issue: the special safeguard mechanism (SSM) designed to protect agriculture in developing countries where US and India, principally, could in the end not agree on any compromise.
There has been no measure of blame directed at the EU for the breakdown - this is probably a first in the history of GATT negotiations.
We are now in a recovery phase after the breakdown and it remains difficult to say how serious the gap is between countries. It has become clear that no-one is ready to throw in the towel on the talks, and many political contacts, including some at Head of Government level, have taken place throughout August and this month.
Senior Officials have picked up work on SSM last week in Geneva, and there are some cautiously encouraging signals of flexibility emerging there. It is still early days and we will need to see if Senior Officials are given the leeway they will certainly need to tease out a technical solution which satisfies all parties. This will also give us indications as to the political will to continue in the US and in India, amongst others.
A solution to SSM is necessary but not sufficient to get a modalities deal. Cotton, tariff simplification, the treatment of recently acceded members - the RAM status for China - are all still on the table.
And we face the challenge, of trying to identify and build a meaningful NAMA sectorals package to extend tariff reduction in a number of mutually-agreed industrial sectors. This will not be easy: finding a complex set of trade offs in what, in any case, is a non-mandatory area of negotiation will be challenging. And a sectorals package might come at a price in the core NAMA modalities, the respective values of which will also be hard to agree on.
We have an interest in protecting the outline deal that emerged out of the July week. This package did have the potential to deliver some real new market access in industry both in developed and in developing countries, especially China, as well as locking in the Swiss formula at the WTO and putting a cap on any raising of tariffs by developing countries in the future. We should also not forget that the package includes Services and that our key partners have demonstrated engagement in the
Signalling conference on key sectors. This is very relevant for our economies.
And, it should be borne in mind, the package respects all our red lines in agriculture. So the importance of sustaining what was on the table in July is important to Europe as well as to the developing countries to whom it extends vital new trading opportunities.
Let me be clear: there is no plan B to secure a Doha deal which we still need for many reasons. For our economies because the global economy is in an uncertain place. Every bit of additional certainty, every cut in tariff - especially those leading to single digit tariffs in large emerging countries, every strengthening of global trade rules, is clearly in the world's long term interests. It is certainly in Europe's interests, especially at a time when governments and citizens are concerned by
the fall in purchasing power and increasing inflation.
And, as I have said, we need it for development. A round concluded on this basis would reduce world tariffs by a half and while developing countries would contribute one third of the savings, they would benefit from two thirds of increased market access.
We need the DDA to lock in the US into a real farm reform, as well as to get permanent international legal protection for our reformed CAP. With an agreement, the US would have to reduce their trade distorting subsidies to 14.5 bn$. Without a round, subsidies can increase up to 48 bn$ under the new farm bill. Those who seek more reciprocity in global trading system - and fair competition in agricultural goods trade - should keep this in mind.
Doha has also the potential to turn the emerging countries into custodians of the multilateral trading system which needs to be preserved and strengthened. We would anchor them more firmly into the rules-based system of global trade which is essential for the future.
That is why the breakdown of the negotiations in Geneva is a real disappointment. It also puts a question mark on our ability to secure the gains on services and GIs we are seeking. I also remain convinced that a definitive collapse of the Doha Round - should we face this - would seriously dent confidence in the WTO's system of trade rules and future market openness, and have a significant knock-on effect on the multilateral system as a whole. It would come exactly at the wrong moment and
weaken prospects for other international negotiations like the important climate change negotiations.
We will continue to engage firmly in the DDA discussions - there is no downside for us in doing so and we hope that other key partners will show the same commitment to negotiate in good faith on the basis of the July package, which remains the only basis possible to move the discussion forward. As we say in English, "never quit certainty for hope." I have had regular contacts with my key counterparts of the G-7 including a series of calls during this last weekend, and I will continue to stay in
touch with them over the coming weeks when I believe a further meeting of key negotiators at Ministerial level will be desirable if we are going to succeed in pulling things round before domestic politics and elections in a number of countries takes over completely. Our own willingness - and fundamental interest in a DDA deal is intact.
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