Agricultural Trade Liberalization: Can the US and EU Show the Way?

To download the text of the speech given by the Rt. Hon. Margaret Beckett, click here (PDF format).

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On February 3, 2003, the Trade, Equity, and Development Project and the Embassy of the United Kingdom of Great Britain and Northern Ireland were pleased to present the United Kingdom's (UK) Secretary of State for Environment, Food, and Rural Affairs, The Right Honorable Margaret Beckett, M.P.

In the run up to the World Trade Organization (WTO) "mini Ministerial" in Tokyo, Secretary of State Beckett gave a major speech on the need for both the United States and European Union to take bold steps towards agricultural policy reform if the WTO agriculture negotiations are to succeed. She lay down a challenge for the United States and EU: embrace change in the interests of world trade and growth, or retain the status quo and stagnate.

Margaret Beckett, a senior cabinet minister, was head of the UK delegation to Johannesburg and Marrakech. Mrs. Beckett will be a key member of the UK delegation to the WTO negotiations in Cancun in September.

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Following her speech (full text available here in PDF format), Secretary of State Margaret Beckett fielded questions from the audience.

Translating Environment into Trade Agreements

Carnegie senior associate John Audley asked Secretary of State Beckett to comment on how respect for rural ways of life, the environment, and other issues she raised would translate into the language of a trade agreement. Further, he asked how she would respond to developing countries who argue that they don't have the money to pursue similar objectives.

Secretary of State Beckett emphasized her confidence that trade negotiators would successfully work out the language on environment and related issues, such as animal welfare and geographical indications (GI). She argued that the more important concern is whether countries can reach understanding and acceptance that these are important issues to take into account. In addition, she stressed the need to build the capacity of developing countries to participate more fully in negotiations, and suggested that progress has been made in this area since the Seattle Ministerial. While she expressed her understanding for developing country concerns about protectionism, she maintained that rich countries have a genuine interest in helping the developing world tackle issues related to environment, food safety and high standards, in turn allowing poor countries and producers to compete in international markets on a fair basis.

GMOs and Biotech

Audience members posed several questions related to genetically modified organisms (GMOs), asking Mrs. Beckett to comment (1) on the possibility of the U.S. Government filing a biotech-related WTO suit against the EU, and (2) on the articulated US resistance to labeling of GMO products - the issue expected to be at the heart of such a WTO case.

Mrs. Beckett shared her impression that the U.S. may not have decided yet to press a case on biotech grounds in the WTO, though the possibility is clearly under consideration. According to Beckett, the United Kingdom hopes that the U.S. will not pursue such a case at this time, for its decision to do so would jeopardize recent developments occurring within the European Union. For example, the Council of Ministers has made some decisions on labeling and traceability issues, while the Spanish and Dutch governments have put forward applications to authorize GMO products which are new to the EU. Further decisions on these matters are expected in November, 2003.

On the question of GMO labeling, Secretary of State Beckett maintained that significant cultural differences exist between the U.S. and the EU in this area. While labels in the United States may be viewed as a warning, in the EU labeling has become the expected norm to provide consumers with transparent information and choice. Therefore, Mrs. Beckett contended, U.S. constituencies can not have a real expectation to exclude GMOs from this European norm.

The Attitudes of European Constituencies

Members of the audience asked Mrs. Beckett how closely her hopeful calls for agricultural policy reform reflect the attitudes held by other European countries and constituencies, including agribusiness. Specifically, one individual inquired about the willingness of the European public to support an increase in development aid to Africa through a decrease in agricultural subsidies.

Pointing to the European Commission's proposal for agricultural reform within the WTO - put forward by EC Agricultural Commissioner Franz Fischler - Mrs. Beckett repeated her optimism that those calling for change will succeed. She stated that there has been a shift in broader attitudes towards the EU Common Agricultural Policy (CAP), with many European environment, finance, and development ministers no longer in favor of the current CAP. Additionally, she argued that a perception exists that U.S. gains in the Uruguay Round were not to the advantage of the EU, in part because EU resistance to change had hampered its preparation of a strong position. This pattern, implied Beckett, should not be repeated in Doha negotiations.

Beyond the mind-set of policy makers, Secretary of State Beckett asserted that UK and EU citizens generally are in favor of agricultural reform, because they feel they are paying too much to sustain a program which is not effectively addressing public concerns. Thus, she argued that the CAP should be reformed for domestic reasons, though WTO negotiations provide an added push to pursue reform now.

Beckett resisted drawing any closer connection between agricultural reform and increasing development assistance, claiming that the issues were separate concerns for EU taxpayers. She emphasized, however, that the Doha agriculture debate is framed in terms of trade, good governance, and capacity building; discussion has moved beyond merely providing more aid or technology to poor countries. For this reason, she stressed the importance of delivering on Doha commitments to increase market access for poor countries, and identified the anger expressed by developing countries when they perceive progress is not being made in this direction.

Finally, Secretary of State Beckett maintained that though agribusiness might not be noted for a devotion to the world's poor, it is noted for a wish to produce in whatever part of the world is most effective, and therefore has interests in line with agricultural reform. It is in everyone's interest, Beckett argued, to let the market operate where it can to promote sensible production; simultaneously, public funds should be used to provide for public goods that the market can not provide, for example the protection of the environment and vibrant rural communities.

The Fischler Proposal: Opportunities to go Further

Following a question from a development advocate, Secretary of State Beckett agreed that the Fischler proposal should have gone further in addressing the sectors of sugar and dairy, which are critical to developing countries. Specifically, she expressed her disappointment that the proposal had not pursued the Berlin mandate to bring an end to quotas on dairy products, which the UK believes are harmful to farmers in both the EU and the developing world. However, she asserted that Mr. Fischler has made it clear that he anticipates coming forward with future proposals for both sugar and dairy. The Fischler proposal, Beckett contended, has tried to create room not only to reform those structures of the CAP that she touched upon, but also to provide funds to support coming reforms in sectors like sugar and dairy.

Synopsis of audience discussion prepared by Vanessa Ulmer, Junior Fellow, Carnegie Endowment for International Peace