Mandelson: 'Don't panic over talks'

The European Union’s top trade negotiator won overwhelming support from EU governments today to stay the course in world trade talks, and he urged member nations not to lose their nerve.

At an emergency meeting of EU foreign ministers, Trade Commissioner Peter Mandelson faced down France, which had demanded guarantees that he make no excessive concessions at the expense of French farmers.

British Foreign Secretary Jack Straw, the meeting’s chairman, said there was broad support Mandelson’s negotiating strategy. He said reigning him in would only “make (WTO) negotiations impossible,” adding that France found no support for such an option.

Mandelson said world trade negotiations so far this year had merely tread water and that a hard slog lay ahead in 2006.

He also warned that the talks didn’t rely only on a breakthrough on farm subsidies but also on industrial goods and services.

“The Doha talks are a very large aircraft, it’s not one that can fly on one agricultural engine alone,” he said. He called for “parallel moves” from the EU’s trading partners.

Mandelson denied that EU governments were split on his mandate to negotiate a trade deal on their behalf and said the foreign ministers’ meeting had cleared the air. “It has certainly cleared up any questions over” his negotiating tactics, he said.

In a joint statement, the EU ministers voiced support for the Commission’s efforts to “secure an outcome in line with the mandate” agreed to by their governments.

But they added that the Commission had agreed to “strengthen the mechanisms to ensure that the Council is fully informed, on a regular and systematic basis, of developments in the negotiations.”

This process would include explanations “confirming that the Commission’s action remained within the mandate,” the statement said.

Poorer countries want the US and the EU to make substantial cuts in aid to farmers. They say subsidies in rich nations keep world prices artificially low.

Mandelson said a French demand to analyse the effects of any new trade offer on farming – if taken literally – would bring the negotiations to a halt.

The talks at the World Trade Organisation to revamp global trade flows need to progress to make the deadline for a framework agreement at a meeting in Hong Kong in December.

WTO chief Pascal Lamy said the EU and the US had to show flexibility. Speaking to a congress of European farmers in the French city of Strasbourg, he said the EU had to be ready to open its markets to more agricultural imports and the US should cut handouts to farmers.

Mandelson urged EU governments not to panic over the trade talks.

“Surely it would be the wrong reaction, and a terrible mistake for the EU, at the first sign of serious movement in the talks … to lose confidence and pull in our horns,” he told the EU ministers.

Mandelson sought to allay fears the EU’s latest offer to cut farm subsidies would force Europe to reform its agriculture policy.

EU Farm Commissioner Mariann Fischer Boel, also in Strasbourg at the farmers’ meeting, said that the result of the trade talks must not put in question the latest reform of the EU’s common agriculture policy, completed two years ago.

US Trade Representative Rob Portman warned that the WTO talks could collapse unless European governments backed Mandelson and Fischer Boel.

He said the EU had to cut tariffs for agricultural products for the talks to move forward. “Unless and until we do that, the talks cannot proceed.”

The EU said last week it would reduce the number of sensitive products that have higher import tariffs – such as beef and poultry – an offer Portman said did not match expectations on market access.

Portman claimed US farmers needed more access to European markets to cushion the blow of cuts in farm support announced last week.

Mandelson said the EU was ready to cut ”trade-distorting” agricultural support by 70%, provided others made similar efforts.

French ministers angrily claimed that Mandelson had moved outside the mandate agreed to with the EU’s member states.

“Let us remind our citizens that we secure their supplies of food and we don’t want our position to be under attack,” Jean-Michel Lemetayer, president of the Council of French agriculture, told the Strasbourg meeting.

Mandelson has rejected such criticism, saying the latest offer was “exploratory,” stressing that Europe had most to gain from a deal on better market access for services and industrial goods, which make up 85% of European exports.

The EU’s ongoing reform of agricultural policy is already a step too far for some farmers as it phases out production payments in favour of subsidies based on environmental, land management and food safety standards.

EU farmers have called the US offer a sham.

“The US makes no effort to hide the fact that their sole aim … is to expand agricultural exports to the EU but also to developing countries,” said EU farming lobby COPA-COGECA. “We fail to understand how the trade commissioner can give … concessions in the face of a derisory US offer.”

Anti-poverty group Action Aid said the EU’s farm reform doesn’t do enough to help developing nations. It said the EU and the US were merely reclassifying payments to farmers.