May 22, 2007
Bicycle wobbles on the way to Doha
The European Union is often compared to a bicycle: if it stops moving forwards it will fall over. The bicycle theory also applies to multilateral trade talks.
Hence negotiators keep having meeting after meeting to revive the Doha round, even if they appear only to be inching further down a cul de sac.
Trade ministers chatted in Paris early last week. Then on Thursday and Friday Peter Mandelson, the EU trade commissioner, hosted his counterparts from the US, India and Brazil in Brussels. The talks were, inevitably, “productive”, but just as inevitably did not lead to a breakthrough. You can probably write the closing statement for the next round in June yourself.
In the meantime, the EU ministers are preparing to jump out of the saddle.
While paying lip service to the Doha round, industry ministers called on Monday for more bilateral trade deals to lever open markets for European cars and ships to ensure a “level playing field”. Last week the bloc dropped an explicit pledge to end controversial export subsidies on products sent to its former colonies.
The EU has promised to eliminate the payments, which can lead to subsidised European goods displacing local produce in developing countries, by 2013 if others do the same as part of its offer in the Doha round.
It had also made it part of new deals with 76 African, Caribbean and Pacific (ACP) countries, to be signed by the end of the year. But pressure from France ensured that Germany, chairing a meeting of development ministers, removed the commitment from the final statement.
“Export subsidies are not linked to these agreements but to the Doha round. If there is no Doha round conclusion we should not give them away,” said a French diplomat. Subsidies were €3bn last year and are declining as commodity prices rise.
Mr Mandelson wants export subsidies ended immediately where ACP countries open their markets completely, ahead of the proposed 2013 abolition.
EU ministers did at least agree to scrap tariffs and quotas on almost all products under the so-called economic partnership agreements. Sugar will be protected until 2015 and rice for a shorter time. Spain and France have won a re-examination of whether bananas, grown in their overseas territories, should also be exempted. France claimed Latin American producers would challenge any further opening of the sector to ACP producers.
These moves will add to the tension at talks on Friday between EU and ACP ministers as time runs out to conclude the deals. They will replace the current preferential tariff regimes that have been ruled illegal by the World Trade Organisation. A WTO waiver expires at the end of the year.
