'We are biggest customer for developing countries'
July 8, 2009
Since 2003, the EU had cut support for its agriculture by between 70 percent and 80 percent, European trade commissioner Catherine Ashton said in an interview in Brussels yesterday.
The EU, along with other advanced economies, traditionally protected local producers with tariffs and provided massive support for their exporters.
This put poorer countries at a huge disadvantage, as many developing economies depend heavily on agriculture for export revenue and, therefore, for economic growth.
However, recent moves to liberalise world trade have opened up markets for exports from the developing world.
"We do give some agricultural support (within the EU) but we have had messages from some (developing) countries that it actually helps them because it keeps prices lower," said Ashton.
Asked whether continued subsidies to local exporters of agricultural products could effect the EU's credibility in negotiations with developing countries, Ashton said it was not an issue that was raised by those countries in negotiations.
She said the common agricultural policy reforms of 2003 "made significant changes which will be captured properly within the Doha round". The trade talks initially stalled in 2003 and subsequent attempts to revive them have so far proved unsuccessful. However, Ashton said she believed the round would be concluded by the end of next year.
She said remaining subsidies were largely not "trade distorting". In other words, existing subsidies did not encourage uneconomic production of food in the EU, which would potentially exclude products from other countries on its markets, or present unfair competition from EU producers on global markets. The deadline for phasing them out completely is 2013.
"We are the biggest customer for developing country produce and our share is growing," Ashton added.
She pointed out that Europe was attempting to assist developing countries by providing aid for trade.
This is in an attempt to assist countries to achieve economic growth to reduce the need for aid for other purposes.
Ashton said the EU, with a budget of €133.8 billion (R1.5 trillion) for this year, provided €7bn a year in aid for trade, of which €2.7bn was for Africa.
This was part of an attempt to get developing countries through the current economic crisis. In total the EU provides €50bn a year in aid. - Ethel Hazelhurst
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