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Fischler Says EU Would Loosen Agriculture, But 'Extremist Views' by U.S., Others in Way

International Trade Reporter - Sept 27, 2001 

BRUSSELS--The European Union is ready to further liberalize its agriculture sector, including the reduction of export subsidies, but too much "shadow boxing" by countries with "extremist views" threatened to eliminate the chances for launching a new World Trade Organization round, European Agriculture Commissioner Franz Fischler stated Sept. 26.

At the same time, the Commission put forward two new proposals for the agriculture round, including one calling for an end to what it called the "piracy" of "quality food names" from European regions. The EU executive body also outlined for the first time a proposal that would allow it to compensate farmers for extra costs incurred because of stricter animal welfare standards in the EU.

While Fischler said the EU was ready to do more than "talk the talk" of farm trade liberalization, he said he failed to see how much progress towards liberalization could be made when countries such as the United States and the CAIRNS groups of agriculture exporting countries continue to take "extremist positions." He said these positions were hampering negotiations that need to take place during the next six weeks before the WTO ministerial in Doha, Qatar.

"How can one talk about an ambitious new round while at the same time the U.S. Congress issues yet another farm aid package, leading to a direct subsidization of the American farmers that is more than three times as high as the European farmer," said Fischler. "And what is the point in the CAIRNS group insisting that agriculture should be treated like another industry when all the evidence shows the opposite?"

Despite the proclamations made by Fischler that the EU is ready to further liberalize its agriculture sector, such sentiments differ distinctly from those of France, which has the largest agriculture-based economy in the EU.  France has consistently rejected any chance of further liberalizing the EU sector. It repeated that message as recently as Sept. 7 when EU trade ministers met in Belgium. France insists that the bottom line on farm reform for the EU in a WTO round must be the Agenda 2000 agreement on agriculture reforms agreed in March 1999.  That agreement states specifically that the EU would not go further in agriculture liberalization in a new WTO round. Despite the conflicting signals from the Commission and the French, Fischler said the United States and the CAIRNS group, which includes 16 countries including Argentina, Australia, Brazil, and New Zealand, had failed to learn the lessons of Seattle.

Mistakes Being Repeated

"I have the impression that our trading partners are repeating the mistakes that have been made before the WTO meeting in Seattle," said Fischler. "While the EU has put forward a fair and well-balanced agriculture negotiation position in February, many of our partners have remained camped on their extreme positions until now."

Nonetheless, Fischler said he did believe there was hope that the U.S. was beginning to come around to the EU view that farming makes a multifunctional contribution to society and therefore it should be given special consideration.   "In a strategy paper on the future of U.S. farm policy, Secretary of Agriculture Ann Veneman has for the first time emphasized that domestic support should be shifted to less trade distorting measures and stewardship of the environment," Fischler said. "We have to wait and see how this first statement will translate into practical programs but I get the sense that the U.S. farming policy might start to move in a good direction."

Proposals Would Halt Food Name 'Piracy.'

The EU proposals to protect "the piracy" of geographical food names is an issue that has surfaced in recent trade agreements signed by the commission on behalf of the 15 member states. For example, a free trade agreement with South Africa was held up for more than a year because of the EU's insistence that the use of the names "porto" and "sherry" be phased out. The EU has insisted the names are the intellectual property rights of countries such as Portugal and Spain.

The EU has also consistently called on the United States to stop wine producers from using names such as "Champagne" and "Burgundy." The U.S. has consistently rejected the EU demands, especially since the EU exports approximately five times as much wine and spirits than it imports from the U.S.

Other examples the Commission has consistently pointed as violations of European "intellectual property rights" concern the use of words such as "Parma" ham or "Parmesan" cheese.

"We cannot let people believe that they are buying a genuine product with specific qualities, characteristics, and reputation associated with a certain geographical origin while in fact they get an entirely different product," said EU negotiator David Roberts. "Therefore an appropriate mechanism should guarantee effective protection against usurpation of names and the right to use geographical indications or designations or origin."

The Commission proposal to allow farmers to be compensated for animal welfare protective measures calls for such distinctions to be added into the so-called "green box" of measures.

"The current green box provisions have contributed to implementing policies to protect the environment and to help preserve the viability of the rural areas," said Roberts. "Coverage of new measures relating to increasingly important issues such as animal welfare should also be adequately guaranteed."

The EU's two proposals on protecting geographical foods names and increased compensation for animal welfare measures can be found at the following address:

europa.eu.int/comm/agriculture/external/wto/officdoc/index--en.htm

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