WTO tariff deal takes shape
They agreed a new system to convert existing tariffs into so-called “ad valorem equivalents”.
Currently import tariffs are set in euros or dollars. For example, the EU import tariff for boneless forequarters of beef is €2.21/kg.
In future, this will be expressed as a percentage of the product price, and will then be slotted into a new formula (yet to be negotiated) to determine the level of cuts.
Part of the dispute in recent weeks revolved around what price level to use for each product line.
The EU had wanted a higher price, so that the percentage of tariff was actually lower and therefore had to be cut less.
Other countries, for example Brazil and Australia, had called for a lower set of prices.
The deal reached in Paris this week was a compromise between the two.
The next step will be for the WTO to issue a new draft paper outlining a formula for cutting the new ad valorem tariffs, as well as export subsidies and domestic farm supports.
This will be presented to trade ministers in China in July and is intended to form the basis of a final deal targeted for the meeting of all 147 WTO members in Hong Kong in December.
Marian Fischer Boel, EU Commissioner for Agriculture and Rural Development, said, “Throughout this process, my interest has been to kick-start the talks, while at the same time safeguarding the legitimate interests of European farmers.”
