Brendan Smith (Cavan-Monaghan, Fianna Fail)

As we have heard today, the negotiations on the next WTO agreement have entered an intensive phase in the run-up to the WTO ministerial conference in Hong Kong which begins on 13 December. Although it appears there may be a need to hold a further ministerial conference in the first half of 2006 to finalise all the details of a new agreement, there is no doubt that the negotiations which begin in Hong Kong in less than two weeks will be a significant step on the road to a final agreement. The Minister for Agriculture and Food will attend these negotiations and will actively pursue the most beneficial outcome for the Irish agri-food sector.

From our point of view, given the economic and social importance of our agriculture and food sector, this is a vitally important aspect of the negotiations. The outcome of the next WTO agreement will determine the levels of future protection and support for the agriculture sector and the new round could, therefore, have serious implications for the Common Agricultural Policy.

The negotiations were launched at the WTO Doha ministerial conference in November 2001. In so far as agriculture is concerned, the Doha mandate provides for substantial reductions in trade-distorting domestic support, reductions with a view to phasing out all forms of export subsidy and substantial improvements in market access.

As part of the 2003 CAP reforms the EU made a deliberate decision to prepare in a forward-looking and positive manner for the challenges which Doha set for agriculture, such as the move to decouple payments. Decoupled payments, which by their nature are not linked to production, are considered non-trade distorting by the WTO. The EU move away from coupled and market support type payments has substantially reduced our levels of trade-distorting supports, thereby fulfilling one of the key objectives of the Doha declaration.

The EU has also made a significant contribution in the area of export subsidies. The EU's commitment to eliminate export refunds completely facilitated the agreement in August 2004 on the WTO framework document providing the basis for a final agreement.

This commitment was made on the basis that the other developed countries would agree to eliminate the trade distorting export subsidies which they apply through export credit regimes, state trading enterprises and food aid practices that involve the dumping of production surpluses on the markets of the poorest countries in the world. It is disappointing that the parallel elimination of export subsidies by other developed countries provided for in the August 2004 framework agreement has not been adequately addressed in the negotiations to date.

These commitments by the EU have been proposed in advance of the final agreement on the new WTO round and by taking this approach the EU has clearly shown its commitment to achieving an ambitious outcome. I am disappointed that the same level of commitment to reform has not been shown to date by many of the other developed countries in the WTO and the EU continues to be put under pressure in the negotiations.

In this context the Minister has been concerned that in recent months the Commission has been adopting an unnecessarily concessionary approach to the negotiations. The Commission negotiates on behalf of the member states on the basis of a mandate which was agreed in the Council of Ministers. The mandate is designed to defend the CAP as it has evolved under successive reforms, including Agenda 2000 and the mid-term review, both of which were agreed with a view to positioning the EU in the WTO negotiations. The mandate aims to protect the European model of agriculture as an economic sector and a basis for sustainable development based on the multifunctional nature of agriculture and the part it plays in the economy, the environment and society generally.

Several of the Minister's colleagues on the Council share her concern. On 14 October she supported a memorandum, prepared by the French Minister for Agriculture and submitted to Commissioner Fisher Boel, outlining the growing unease with the Commission's approach. The memorandum urged the Commissioner to defend vigorously the EU position on agriculture in accordance with the mandate as agreed by the Council. The French initiative was endorsed by 14 EU Ministers for Agriculture.

The Minister also strongly supported France's call for an extraordinary meeting of the General Affairs and External Relations Council which was held on 18 October. She, together with several ministerial colleagues, again expressed concern at the negotiating strategy and tactics being adopted by the Commission. This initiative by the Minister and her EU colleagues resulted in the Council concluding that the CAP reforms are the EU's most important contribution to the negotiations and constitute the limit of the Commission's negotiating mandate.

Following a further round of negotiations with other key WTO negotiating partners, the Commission tabled an improved EU offer on 28 October. The Minister has several concerns about the latest offer. First, in regard to domestic support, we believe the Commission's offer has reached the limit of the EU's bargaining position on trade-distorting payments.

Protection of the green box is a fundamental priority. We are extremely concerned that the Commission's latest statement about defending the EU's system of direct payments, which are in the so-called green box and which make such an important contribution to Irish farm incomes, is rather weak. These payments have been exempt from reduction commitments in the past and the Commission's latest statement about a review of these qualifying criteria for the green box remains a cause of great concern to us.

The Minister regards the protection of the decoupled payments in the green box as a red line which must not be crossed. On export subsidies we feel the Commission has already gone as far as it possibly can at this stage and it is vital that the parallel elimination of other forms of export subsidy used by other negotiating partners is adequately addressed. A further critical concern is the position which has been adopted on market access. Very high tariff cuts have been offered, especially in the higher tariffs, which the Minister believes have the potential to open EU markets to increased competition from lower priced imports. The Commission will seek to protect the internal market through a sensitive product mechanism but the details of this mechanism will be crucial if EU markets are to be protected adequately.

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