Swiss sceptical of US-EU farm reform deal

Swiss farmers want to preserve government subsidies Keystone

A joint United States and European Union plan to cut tariffs and subsidies for farm products has been greeted with scepticism by Switzerland and several other countries.

This content was published on August 14, 2003 - 13:10

The proposal, presented at the World Trade Organization on Wednesday night, is aimed at pushing stalled global trade talks forward.

The US and EU are hoping the plan will provide a basis for negotiations at the next round of world trade talks in Cancun, Mexico, in September.

It addresses the biggest issue dividing rich and poor countries, namely subsidies and tariffs which protect farmers in the rich world, and hinder imports from developing countries.

The chief Swiss negotiator to the World Trade Organization (WTO), Luzius Wasescha, doubts whether Switzerland would be prepared to accept an agreement which calls for a gradual phasing out of farm subsidies and import duties.

“We have a basis for further negotiations,” Wasescha told swissinfo. “We are certainly satisfied that the two sides [US and EU] took the leadership and provided us with a paper but it doesn’t reflect all our concerns,” he continued.

“Switzerland is never satisfied, although we may be satisfied at the very end.”

Many developing countries - including India and Brazil - said the proposals were “insufficient” and too vague to be a basis for real negotiation.

Imports and subsidies

The US-EU plan calls on developed countries to remove all import duties on a certain percentage of farm goods from developing countries.

The document also contains regulations for cutting subsidies to farmers, which the US argues do most damage to international trade.

Developing countries say that farm subsidies in rich nations – amounting to over $300 billion a year – and tariffs on imports prevent them from competing on equal terms on the international market.

But the EU and WTO member countries with strong agricultural lobbies, including Switzerland, Japan, Norway and South Korea, are demanding a more gradual approach to lifting subsidies and tariffs.

“Of course we are ready to help them [developing countries], but we expect competitive exporters in developing countries to help them as well. There has to be a burden sharing,” Wasescha argued.

“If you liberalise agriculture, only the strong exporters will benefit and the weak will lose their preferential access and they will be worse off than they are today.”

On the farm subsidies issue, Wasescha remarked that Bern was willing to be “flexible” if its non-trade concerns could be met.

“But as long as the exporters are refusing a substantive discussion, we will have big difficulties,” he said.

One size

Switzerland also has reservations about the very nature of the proposals, which aim to impose international norms governing farm trade. According to Wasescha, they do not take national farm models into consideration.

“The reality is about 100 different models of agriculture in the world and so a one-size-fits-all solution will not work.

“As long as we don’t have any concrete indication that the agriculture exporters are ready to accept our model of agriculture, I don’t see how we could support such a paper,” he continued.

Wasescha promised Switzerland would stand by its farmers and not “sell them out”.

NGOs

Swiss non-governmental organisations (NGOs) said this week they were in favour of the Swiss agricultural model where direct support for farmers, they argue, does not influence market prices.

“Farmers’ salaries are not linked to production, and so they don’t overproduce but rather farm in a sustainable way,” Marianne Hochuli, head of trade issues at the Berne Declaration, told swissinfo.

Nevertheless, they would welcome an end to subsidies which they claim damage developing countries’ world market prices.

If the EU-US proposal is approved by all 146 WTO members, it will be put to trade ministers at a meeting in Cancun, Mexico next month.

The issue of agricultural reform is widely accepted as the key to a successful round in Cancun, as well as to agreement on a new global free trade pact by the end of 2004.

swissinfo, Samantha Tonkin and Ramsey Zarifeh

EU-US deal

The US-EU plan calls on developed countries to remove all import duties on a number of farm goods from developing nations.

The document also calls for a gradual phasing out of farm subsidies.

However, Switzerland, whose farmers benefit from subsidies and protective tariffs, has expressed reservations about the deal.

The proposal will provide a basis for negotiations at the next round of world trade talks in Cancun, Mexico, in September.

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