EU Offers to Slash Farm Tariffs by 60% at WTO Talks
This week Ministers from 35 nations are trying to thrash out a deal to open world trading markets at the World Trade Organisation (WTO) in Geneva.
Peter Mandelson, the EU Trade Commissioner for the 27 member states, has offered a 60% reduction in EU farm subsidies and tariffs.
Some Ministers from developing countries have already suggested this is not a new offer but a mere recalculation of the previous offer of 54%.
So what is it all about?
This round of talks have continued for seven years, known as the Doha round, repeatedly failing to reach agreement on the liberalizing of agriculture and manufacturing due to the agricultural element.
Basically developing nations see the farm subsidies and tariffs in developed countries as barriers to improving their economies through free trade. Some very poor countries with little more than agricultural produce to export cannot compete with the strong wealthy nations while their produce is being subsidised.
The developed nations want something in return for slashing the farm subsidies and tariffs, which is the opening of markets in developing countries for manufacturing and banking.
Peter Mandelson has admitted that EU farmers would be the “major losers” if this deal goes ahead. He said the 60% reduction offer was not a gift and “It depends on emerging economies such as Brazil, India and China responding with improved offers on lowering industrial tariffs to give European manufacturers more access to their markets.”
Mr Mandelson said he had “yet to see any movement or any flexibility on industrial tariffs from the fast-growing economies.”
Effectively in order to get better deals for selling of such things as car parts, financial institutions and textiles abroad farmers in the EU would lose financial support, with some WTO member states demanding up to an 85% reduction.
Of course France is furious about the offer, as they receive the highest EU agricultural subsidies and have a very strong agricultural lobby. French President Nicolas Sarkozy has threatened to block a world trade agreement if it means the demise of EU farming.
Brazil have already spoken out against the offer with their Foreign Minister, Celso Amorim, saying emerging economies, such as China, India and Brazil are already offering substantial concessions and that developed countries should not expect too much.
Mr Amorim said “There is this kind of self-righteousness that is very common among the rich countries because they not only want to have the best deal, they also want to be in the high moral ground”. So is he really suggesting that he is not looking for the best deal for Brazil?
Will this move really help the under-developed countries? We have recently seen countries such as China and the oil producing states in the Middle East buying up farming land in Africa, so the profits are highly unlikely to ever see a bank in Africa.
Where does this leave British farming? It appears in order to take with one hand Peter Mandelson is prepared to offer farming with the other, with British and EU farming the sacrificial lamb.
UK farming is already suffering under the weight of red tape and calls for higher biosecurity levels on farms to control TB. Around the UK we see restrictions on farms due to bluetongue, with farmers unable to sell their healthy stock and trying to find money to feed cattle that should have been sold by now and just last week we heard about the export of bovine TB from Britain to the Netherlands.
Is anyone really naive enough to believe that cheap imported live stock from underdeveloped countries will be disease free and regulated in the way EU farms are?
We have also seen this year the many reports on the world food price crisis stating that the richer a country becomes the more food it consumes per person, particularly meat products.
Of course rich nations, who have created the unfair global trading problems, must do something substantial to aid poor countries in their development and in the production of food but if we are going to be fair about leveling the playing field then we should surely scrap all the rules and regulations for EU farmers, allowing them to produce food in the same way their developing counterparts do.
Of course then we will face the spread of disease and the moral implications of animal welfare but if we want true free trade then we should all be held to the same standards. We cannot have it both ways, demanding strict animal welfare and controls on one hand and then agree to buy in cheap imported food that is not under such strict controls, if any at all, with the other hand.
EU farm subsidies have required a good shake up for a long time, with the richest farms receiving the lions share of available cash and the smallest farms receiving very little but our farmers produce our food. They produce it to a standard we have demanded, to the point of lunacy when it comes to shape and size of fruit and vegetables. We have demanded animal welfare rights and insisted on a traceable food chain. This has all added to the cost of our food and so we go to the supermarket and buy the cheapest produce we can find without a second thought for how it was produced or the welfare conditions of the animals.
To be slightly alarmist about the whole situation, what will happen when our farming industry is no more, we import all of our food and then the developing nations become richer and begin to consume more food per person. Will we be able to eat the extra profits our manufacturers are making or will we simply face a food shortage crisis in the EU when we can’t buy in enough food?