EU agricultural trade policy and agricultural trade with developing countries

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Jerzy Plewa, Deputy Director General for International Affairs, DG Agriculture and Rural Development
14th May 2008, Royal Museum for Central Africa in Tervuren, Belgium

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EU agricultural trade policy and agricultural trade with developing countries

  1. 1. EU agricultural trade policy and agricultural g p y g trade with developing countries EU agricultural trade with developing countries DDA The Economic Partnership Agreements (EPAs) p g ( ) The “Everything but Arms” (EBA) Initiative CAP reform and the Health Check Concluding remarks Jerzy Plewa Deputy Director General for International Affairs DG Agriculture and Rural Development 1
  2. 2. Agricultural trade balance of major WTO players (million US $) 40.000 40 000 30.000 20.000 10.000 0 -10.000 -20.000 -30.000 40 000 -40.000 -50.000 EU27 US BRA AUS CAN ARG NZ CHN IND JAP Avg94 96 Avg94-96 Avg04 06 Avg04-06 2006 Source: COMTRADE 2
  3. 3. Agricultural trade with developing countries EU Agricultural Balance with Developing Countries (FAO list -182) in mio € Bal. Proc. prod. Tropical prod. Bal. Raw prod. (excl. tropical prod.) TOTAL AGRIC. BALANCE WTO 10 000 5 000 0 -5 000 -10 000 -15 000 -20 000 -25 000 25 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 3
  4. 4. Developing Countries agricultural exports (Average 2004-2006) 2004- RoW KOREA RP 36.5% 1.9% UNTD ARAB EM 1.6% INDIA 1.9% MALAYSIA 2.0% HONG KONG 2.1% RUSSIAN FEDER. 3.3% JAPAN CHINA 6.4% 6 4% 6.5% USA PUERTO RICO AND US VIRGIN EU25 ISLANDS 23.2% Source: UN-Comtrade 14.6% extraction date: 26-02-2008 4
  5. 5. ACP agricultural exports (Average 2004-2006) 2004- RoW 31.1% RUSSIAN FEDER. 1.3% SAUD.ARABIA EU25 1.6% 41.9% INDIA 2.2% JAPAN CHINA 2.8% 2.8% SOUTH AFRICA USA PUERTO RICO 6.7% AND US VIRGIN Source: UN-Comtrade ISLANDS extraction date: 26-02-2008 9.8% 5
  6. 6. DDA Development at the center of the round Special and differential treatment for developing countries in the agriculture negotiations Need to ensure balance within agriculture and between agriculture and other areas (NAMA, services, rules, GIs) 6
  7. 7. The Economic Partnership Agreements Aim: Mutually reinforce effects of trade and development aid and foster regional integration WTO compatible agreements DFQF market access into EU k t i t Rice – 2 year transition Sugar – transition f S i i from O b 2009- October 2009 2015 asymmetric, long transition periods for ti l t iti i d f ACPs South Africa [TDCA] – separate trade regime Council Regulations nos. 1528/2007 and 1529/2007, OJ L348 7
  8. 8. The EBA Initiative Aim: integration of LDCs into the world economy DFQF for all products except arms - the most p p favourable regime available Transitional periods only f sugar and rice until 2009 for In the meantime, duty free tariff quotas for rice and sugar increasing annually Council Regulations nos. 416/2001 and 2501/2001, OJ L346 8
  9. 9. CAP reform From price to producer support…to decoupling of direct aid…and to a better balance of support A radically reformed policy – Support mainly decoupled and subject to cross-compliance – Role of intervention mechanisms significantly reduced – Strengthening of Rural Development (2nd pillar of CAP) A better performing policy – Market imbalances and public stocks more of a (rare) exception – Competitiveness improved and agricultural trade role transformed – Better value for money with improved transfer efficiency Adjustments and new challenges to be addressed in the “Health Check” – Climate change imposes both mitigation and adaptation challenges – Links to bio-energy demand, water scarcity, risk management 9
  10. 10. Reduction in price support Cumulative % reduction in price support 0 -15 -30 -45 -60 -75 Soft wheat Durum Beef Rice Butter SM Powder Sugar wheat Completed reform Reform in process 10
  11. 11. Composition of CAP expenditure p p EU-10 EU-12 EU-15 EU-25 billion € 60 50 40 30 20 10 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Export subsidies b idi Market support k Direct aids i id Rural development ld l 11
  12. 12. Impact of CAP reform on trade Change in objectives through successive CAP reforms: - a competitive EU agricultural sector; - environmentally friendly production methods; - quality products; - enhanced landscapes; - dynamic sustainable rural economy; - significant reduction in trade distorting support Reduction of trade–distorting measures: With the full implementation of 2003/05 reforms, almost 90% of EU direct p , payments will be decoupled from production 12
  13. 13. Concluding Remarks The EU is the main trading partner of the developing countries and has a development friendly trade policy CAP reform (including decoupled p y ( g p payments), and ) the EU positioning in the DDA is development friendly THANK YOU FOR YOUR ATTENTION! 13

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