Oxfam: No real gains for poor in EU trade offer

Published: 22 November 2005

Despite a supposed breakthrough reform offer, the European Union will not have to reduce the amount of money it pays its farmers by a single euro, said international agency Oxfam today. The EU offered to cut trade distorting farm payments by 70% but Oxfam said thanks to flexibility at the WTO and recent changes to the European subsidy regime, they would not have to make significant cuts and could actually increase payments overall.

Despite a supposed breakthrough reform offer, the European Union will not have to reduce the amount of money it pays its farmers by a single euro, said international agency Oxfam today.


The EU offered to cut trade distorting farm payments by 70% but Oxfam said thanks to flexibility at the WTO and recent changes to the European subsidy regime, they would not have to make significant cuts and could actually increase payments overall.

"They say that empty vessels make the most noise and the EU offer on trade reform is an example of that. There is little here that we haven't seen before and it seems more like creative accounting than radical reform," said Celine Charveriat, Head of Oxfam International's Make Trade Fair Campaign.

"The European Commission, under pressure from certain member states, has even failed to propose an end date for export subsidies, which is something that should have been agreed and acted on years ago," she added.

Following the 2003 reform of the Common Agricultural Policy (CAP), Europe is classifying its subsidies differently at the WTO. The bulk of subsidies are now immune to cuts because they supposedly do not distort trade. However, Oxfam is concerned that these new subsidies will still do damage to farmers in the developing world and should therefore be reformed.

Charveriat: "It's a case of the emperor's new clothes. The EU, like the US, is simply proposing to move payments from one place to another, rather than reduce them. We're very concerned that the losers from this renaming game will be poor country farmers."

The EU offer came after a similar proposal from the US, which Oxfam also criticized, saying that the US was proffering illusory subsidy reform and demanding big market access concessions from developing countries in return.

The EU offer on market access gives developing countries more flexibility to protect fledgling farm sectors. However, it holds out for the right to designate certain 'sensitive products' like sugar and dairy as subject to lesser cuts, which would dilute the real market access available. At the same time the EU fails to acknowledge that developing countries need to protect certain products vital for food security and livelihoods.

The EU proposals on services liberalisation and Non-Agricultural Market Access go directly against the needs of developing countries and fail to recognize the principle of special and differential treatment.

Charveriat: "The EU talks about the need for balance but we're very worried that developing countries are being pressured to give up far too much. With 900 million people living in extreme poverty in the rural sector of developing countries, the scales must be heavily tipped in their favour. This round of talks was meant to put the needs of developing countries first and deliver for poverty reduction."

High-level meetings continue today in Geneva and there will be a WTO General Council next week.

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