DG Trade civil society dialogue meeting: The EC is a soft power? By Amandine Bach & Katariina Lensu, WIDE |
Evaluation According to the European Commission (EC), Hong Kong was a “relative success”. It was important after the failure of Cancun for the WTO membership to take the necessary steps to make Hong Kong succeed. However, the DG Trade representative stated that the EC did not get as much out of Hong Kong as it had wanted. When asked during the round of questions on the reasons why the EC was not able to sell its position better in the run up and at Hong Kong, the DG Trade representative fully agreed that the EC had sold its offer badly and as such was wrongly portrayed as holding up the negotiations in the run up to Hong Kong (“The US is better at selling its offers. The EC has something to learn in this regard, and has a long way to go in terms of its public image”.) One of the most striking outcomes of the ministerial from the perspective of the DG Trade representative was the ‘aid for trade’ package proposed by the EC, with which the EC ‘offered’ one billion euros for projects related to aid for trade, to be matched by the same amount from the Member States. The EC perceived, however, that in the core negotiating issues the results had been modest. During a brief ‘development-friendly’ evaluation of Hong Kong, the EC representative outlined the EU’s position: In agriculture, ‘the most controversial and difficult issue’, the EU is still waiting for further steps from major partners, like the United States. As the US is on the offensive on food aid, Peter Bálas wanted to highlight the EU’s different position on this issue: rather than giving aid ‘in-kind’ as promoted by the US (“providing US products shipped on US ships”), the EU prefers to provide food aid ‘in cash’ to food aid programmes or NGOs, except in emergency situations where other types of help may be necessary. On market access, the EC does not agree with its trading partners’ evaluation that the EC’s offer has not changed anything; “there is a far-reaching offer from the EU”. On NAMA, the EU promises to cut all industrial tariffs[1], and claims to expect proportionally less contributions from quite advanced and competitive countries, along with no market opening from the least developed countries. On services, the DG Trade representative stated that the EU does not target public services but wants better access to services on the whole. The road ahead The WTO negotiations have restarted. The final deadline is to finish the round of negotiations by the end of this year or latest by early 2007. This deadline refers to an agreement on all details. The first services deadline has been set for the end of February, and the end of April sees the deadline for agriculture and the industrial sector. The DG Trade representative emphasized that the negotiations are to move ahead together, as part of a single undertaking. He noted that what remains to be seen now is the extent of the trading partners’ political will to move the negotiations forward. The EC is more optimistic since Davos, as it appears that there is agreement on a far reaching round. In a series of ministerial meetings held at Davos – bilateral and meetings held in smaller and larger groups – there was recognition for the need for parallel progress. While the DG Trade representative acknowledged that the WTO has a poor record with meeting deadlines, he stated that in this case the EC will not be at fault: any extension of the deadlines will depend on the countries who want a round for free. The EC representative noted that by this he was not referring to LDCs. On negotiating flexibilities, DG Trade representative stated that if there are relevant offers in other areas, the EC has of course to show also limited flexibilities; this is important in terms of the EC’s negotiating position. Who exactly is included on the list of emerging economies? Like civil society, the EC would also like to see objective criteria applied on emerging economies and have a clearer idea of which countries this refers to, but according to the DG Trade representative, developing countries have not expressed political readiness to come to an agreement on such criteria. There is an overall idea of what countries are included, but there are also points of divergence. The EC thinks that too many countries, like India and China, are asking for protectionist measures, despite having the capacity to engage in trade. To roughly illustrate his point, the EC representative ran through a list of numbers: the gross domestic product (GDP) of a number of countries which the EC says are considered to be developing countries, is close or above that of the EU25. These include such countries as the United Arab Emirates, Hong Kong, Singapore, Taiwan and Bahrain. However, as a civil society representative later pointed out, the countries on the list include oil producing countries, and two city states, as well as Taiwan, which notably developed its competitive economy within protectionist measures. If engaging in a debate on emerging economies, the EC must think its position through more carefully. Also, it was commented that countries like India and China include regions and people who are incredibly poor and not able to reap any benefits from increased trade. It is not up to the US and EU to tell countries such as India what timeline to adopt to open their markets, even if opening their markets further may in the long term perhaps be in the countries’ own favour. Social and environmental questions at the WTO In response to a question about why social and environmental questions are not in the forefront of the negotiations, given that they are what people care about, the DG Trade representative commented that the EC is positive on these issues, but there is stubborn resistance at the WTO and given the WTO rules, unless there is consensus, there is no agenda. Challenged on this by Friends of the Earth Europe – the EC is a strong power and shouldn’t be stopped by resistance! – Mr Bálas responded by saying that the EC is a soft power and doesn’t believe in imposing raw pressure on other countries…
For more information on the EU position at the WTO, see Peter Mandelson’s latest speeches at:
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