Free local sults chat - The 2016 cap reform accommodating wto pressures
Many countries wanted a commitment in the Doha Round mandate that the negotiations would lead to the elimination of export subsidies but the EU resisted; in 2001 export subsidies were still too central to the CAP policy of market price support.
The eventual wording in the Doha Ministerial Declaration was a compromise that the negotiations would aim at “reductions of, with a view to phasing out, all forms of export subsidies”.
A breakthrough of sorts came at the Hong Kong WTO Ministerial Council meeting in December 2005 when the EU eventually conceded that export subsidies (where it was the biggest user) might be eliminated provided equivalent disciplines were introduced on export credits and food aid (widely used by the US) and state monopoly marketing boards (used by Canada and Australia).
Members agreed “to ensure the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect to be completed by the end of 2013”.
Negotiations broke down and all subsequent efforts to revive them have proved unsuccessful.
When the EU came to reform the CAP during the period 2011-2013, export subsidies no longer played a crucial role.
However, far from being welcomed with open arms, this joint proposal has been criticised by India and other developing countries amid a sense that they have been betrayed by Brazil.
One trade envoy is quoted: “With what face can Brazil convene a G-20 ministerial meeting on December 14 in Nairobi after have buried the goals for which it was established and now having collaborated with the EU on export competition” (quoted in SUNS #8136).For example, the only reference to food security (Article 54) in the Cotonou Partnership Agreement signed with the African, Caribbean and Pacific (ACP) states in 2000 obliged the EU to ensure that export refunds for all ACP states would be fixed further in advance “in respect of a range of products ” (my italics).The WTO Agreement on Agriculture introduced limits on the volume and expenditure on subsidized exports for those countries with export subsidy programmes in place at the time.Higher world market prices together with successive reductions in market intervention prices as a result of CAP reforms had largely narrowed the gap between EU and world market prices.Nonetheless, the EU did not want to take the final, logical step of renouncing the use of export subsidies.All export refund rates were set to zero in the reform.