18/09/2007
CIAA position on WTO negotiations: restoring balance in the agriculture agreement
CIAA, the confederation of the food and drink industries of the EU, supports WTO members’ continued effort to conclude negotiations of the Doha Development Agenda in due time. Trade is important for food and drink industry activity and it is a factor of growth for overall performance. Import and export growth exceeded 10% in 2006, with total EU exports of food and drink products worth € 52.8 billion and imports reaching
€ 47.6 billion.


Multilateral trade negotiations are a priority for CIAA despite the enhanced EU bilateral agenda. There is much to gain from a multilateral agreement for the EU food and drink industry, in particular

• a clear set of rules in support of fairer world trade and strengthened disciplines applicable to agriculture;
• new trade opportunities for food and drink industry products;
• pressure on other trade partners to reform their agricultural policies.

At a moment when the WTO Agriculture Committee Chair Crawford Falconer tries to identify “potential centers of gravity” and the G4 works on a breakthrough in key areas, CIAA reminds that an agreement should restore balance in the agriculture negotiations and lead to an overall coherent outcome. In order to achieve this, CIAA draws your attention to its main objectives.

On domestic support:

• A substantial reduction in all forms of trade-distorting domestic support – amber box, blue box and de minimis – is needed; a re-defined blue box must avoid for “box-shifting” (in particular of counter-cyclical payments).
• An agreement should prevent concentration of support on some products or sectors via appropriate product specific cuts. The objective should also aim at reducing other trade distorting instruments such as marketing loans.

On market access:

• CIAA does not question the principles of special and differential treatment. There is, however, a serious concern about the amount of specific provisions and derogations that will be provided to developing countries, including the designation of special products. There is a real risk of gaining only very limited market access improvements in advanced developing countries, offering no benefit to the food and drink industry’s export interests. Furthermore, the addition of the four derogations or S&DT provisions (less demanding formula than for developed countries, designation of sensitive products, designation of special products on the basis of unclear and possibly loose criteria and establishment of a safeguard clause actionable in ill-defined cases) could mean that EU exporters would have even less access to emerging country markets after the implementation of the DDA than before.
• The tariff reductions applying to each band should not lead to inconsistent tariff structures throughout related or competing products, and also between agricultural raw material and derived processed products.
• Depending on the size of the tariff cuts finally agreed, the definition of a limited number of sensitive products must be carefully considered. Faced with the complication of TRQ management, CIAA members would generally prefer avoiding recourse to this provision depending also on developments concerning other provisions negotiated under the market access pillar.

On export competition:

• Since the elimination of export refunds is conditional, efforts need to be made to address other forms of export support in parallel, including specific disciplines for state-trading enterprises, export credits, and food aid. It is important to ensure that the “safe box” is adequately defined to encompass real emergency situations and prevent disguised export support and commercial displacement.
• With the further delay of the WTO agreement’s implementation, the proposed commitment to phase out 50% of export support already by the end of 2010 becomes inconsistent and out of balance in comparison with the dismantling and reductions in other pillars which would lose overall coherence and increase problems for EU exporters to access non-EU markets. Any such commitment should be expressed as “by half way through the implementation period” rather than by a specific date of 2013 as stated in the Hong Kong ministerial declaration.
• The export of incorporated products should continue to be entitled to equivalent support to that given to unprocessed agricultural raw materials.
• CIAA considers that export refund commitments must be made on values only. If volumes have to be included this must be extended to all modalities and elements of export support systems.
• Differential export taxes (DETs) need to be addressed. Those practices are highly trade distorting as they grant national industries cheaper access to raw materials compared to foreign processors.

Geographical Indications

The absence of real progress in current negotiations gives rise to concern. Answers need to be found to fight the misuse of product names, to ensure fair competition and protect consumers’ interests. The majority of CIAA members consider that the existing TRIPs agreement should lead to an effective and continuous protection of the specific character of products using particular denominations (geographical indications and denomination of origin), in the form of a multilateral register for wines and spirits as a priority and possibly extension of protection to other foodstuffs later on.

The agreement will have to contain some progress on Geographical Indications and CIAA’s priority will be on the establishment of a multilateral register for wines and spirits and an agreement on the extension of protection to other foodstuffs.

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