Mandelson: World trade deal 'on knife edge'

Europe’s Trade Commissioner Peter Mandelson tonight insisted on farm subsidy cuts in Europe as part of a world trade deal which he said was now “on a knife-edge“.

Mr Mandelson defeated a French attempt last week to clip his wings and stop him bartering substantial EU agriculture support as part of market-opening concessions to the developing world.

Tonight he told EU development ministers meeting in Leeds that agriculture market access was key to success in the current “Doha Round” of the world trade talks:

“As the European Union, we have responsibilities to the Doha negotiations that we must fulfil, including in the field of agriculture.

“There are actions that we cannot avoid either economically and morally, and are essential to unlock the potential development gains of the Doha Round.”

Mr Mandelson, who has power to conduct trade negotiations on behalf of all 25 EU countries, said his mandate was to be “pro-jobs in Europe and to be pro-poor in the world.”

He went on: “I see no inconsistency in these responsibilities. In Europe, we need to generate jobs in the knowledge economy sectors where we have a long-term comparative advantage.

“At the same time, developing countries should, through trade, realise the opportunities offered by their own comparative advantages. That is the basis of free, and fair, trade.

“Agriculture is an inescapable part of this mix, including the reduction in agricultural tariffs.”

Offering a trade-off in agriculture in return for EU interests in services and industrial goods would help unlock the potential of the developing world: “If we want greater market access in advanced developing countries for our top quality manufactures and services, we have to give increased agricultural market access in return.”

He added: “Our dramatic reduction in trade distorting subsidies under the current CAP reform will improve the competitiveness of developing countries, as will our conditional pledge to phase out export subsidies. But subsidies are one half of the issue. The other is the lowering of tariffs.”

Europe already had the best record in providing agricultural market access for the developing world and Mr Mandelson said he would not allow the Union now to be seen as selfish or indifferent.

But he also rejected claims that scrapping the Common Agricultural Policy entirely would answer the trade problems of the developing world.

“It is simply not true that the CAP prevents the world’s poorest countries getting access to European markets. The facts show otherwise.

“When I hear the argument made, as it is from time to time in the member state I know best, (the UK) that if only Europe scrapped the CAP, the problems of poverty in Africa would be solved, I despair of decent people’s informed debate.”