Impact assessment of the compromises reached in the Doha negotiations on NAMA and services at the end of July 2008 (debate) 
President
The next item is the Commission statement on the impact assessment of the compromises reached in the Doha negotiations on NAMA and services at the end of July 2008.
Catherine Ashton
Member of the Commission. - Madam President, we are facing the greatest economic challenge for a generation, and in that challenge both developed and developing countries face difficult and very important decisions.
We need a positive effect from globalisation to respond to the negative effects of globalisation. It is my strong belief that, wherever we begin to look at what we need to do, we will end in the conclusion that completing the multilateral trade round - the Doha Round - is of vital importance to us.
I probably do not need to remind honourable Members of what history teaches us about protectionism, the importance of keeping our markets open and the possibility for our businesses to be able to trade across the world. I probably do not need to tell all honourable Members that, simply within the rules of the World Trade Organisation, if countries moved from applying their tariffs the way that they do at the present time to applying them in the way they are allowed to do under the rules, then the cost to trade would be something of the order of EUR 260 billion. I am sure I do not need to remind honourable Members that, as the developing nations consider the future, they are deeply concerned about what will happen to some of the aid that has been available to them so far.
So, in terms of where we are: we know the value of a deal that is now 80% complete and that in July 2008 80% of what needed to be done was done. Within that agreement, the value is of the following order: the gains in the developing countries would be of the order of EUR 12-14 billion annually; there would be new access to emerging markets in emerging countries, such as China; we would have the opportunity in the European Union for new exports, diversified in new ways - for example, in chemicals and textiles - and in services there is a potential for EUR 14 billion of trade. Another fact at the present time is that the non-tariff barriers - the non-tax barriers - in China alone in 2007 cost European Union companies EUR 20 billion. This is a hugely important round.
I have just returned from Davos, where discussions between trade ministers reinforced the need to get back to the negotiating table and, of course, the technical discussions are continuing in Geneva.
We all wait for the new American Administration to review its trade policies, as it currently plans to do, and to reach the same conclusion that we have reached. We look forward to the G20 on 2 April 2009 and the opportunity it affords world leaders in terms of looking to resolve the financial and economic crisis and having the opportunity to discuss again the need to complete the round. Then there are the Indian elections in April or May, which of themselves will be the moment for an existing or a new government to return to this subject.
Of the outstanding issues that were left on the table, there is the special support mechanism, which, in the end, was the issue that prevented the talks from continuing between India and the United States. There are new proposals being considered. A decision is still to be taken on cotton, but again there are proposals on the table. For the United States there are real issues about particular sectors.
There is no doubt there is still much to do, but it is my strong belief that, with political will, all these issues can be resolved, and the alternative is not an option. For us, issues around services are very important and will follow on.
In conclusion, we are at the moment at a particular point where the need to complete this round is very obvious and very clear, and I look forward, on your behalf - as well as that of the Commission - to continuing my efforts to ensure that we do.
Georgios Papastamkos
Madam President, Commissioner, ladies and gentlemen, the trade in industrial goods and services is indeed of strategic importance to the European economy. The European Union is, as we all know, the biggest exporter in the world and the main source of direct foreign investment. The European Union is one of the most open markets, while eminent partners of ours maintain high trade barriers. We are seeking a substantial reduction in the tariffs applied and for unjustified, non-tariff barriers to be addressed. In addition to industrially advanced third countries, there are also emerging economies which need to make concessions in proportion to their degree of development and their sectoral competitiveness. However, Commissioner, the problem is not only one of removing barriers: differences in regulatory systems are generating additional costs for exports, putting European products at a competitive disadvantage compared with imports from countries with more flexible standards and, in many cases, are raising the question of the safety and protection of European consumers. The prolonged failure to reach agreement is exacerbating the climate of economic uncertainty and is damaging the credibility of the multilateral trade system. Bilateral and interregional agreements can only be supplementary in nature. Furthermore, the economic crisis may trigger the erection of unilateral, restrictive or distorting trade barriers. There are already examples of this, of limited scope at present, as the relevant report by the Director-General of the World Trade Organization, Mr Lamy, testifies. The protection clause for US products adopted by the House of Representatives is a step in the same worrying direction. I would say that to return to unilateral approaches is not a solution. Today more than ever we need to manage the challenges jointly, with more positive integration and by establishing or strengthening international regulatory systems with systemic convergence. We need a new international economic architecture. We need more transparent and balanced global trade governance and, on this point, Commissioner, we await an integrated proposal for 'globalisation with a European face' which will take account of the changes already made and of the link between the commercial and economic dimension for a transparent, democratic and efficient Europe in the world at this time of crisis.
Glyn Ford
on behalf of the PSE Group. - Madam President, we in the Party of European Socialists are committed to a successful outcome of the Doha Development Round, yet the ticking of the political clock has created a situation where, if you like, progress is on hold. Commissioner Ashton made the point that in the United States we have a new, and from my point of view, very welcome, administration in that of President Obama, but we are waiting for a review of trade policy, which may take some time.
In April or May there will be elections in India. The one place Commissioner Ashton did not mention was the European Union itself, where we have our own European Parliament elections in June, and following that a new incoming Commission, in which I hope Commissioner Ashton will continue to serve as Trade Commissioner. Yet that does not mean that there is nothing to do in the interim. Europe must continue to emphasise its commitment to development and free trade within the context of ensuring an end to exploitation and meeting the need for sustainable development.
I agree with Mr Papastamkos: free trade on this basis can be a win-win situation for all participants. The current financial and economic crisis is a reason to move forward and not to retreat.
Commissioner Ashton and the Commission can try to prepare the ground for a compromise between the United States and India. It was obstinacy on both sides, in my view, that acted to scupper a successful conclusion at the last time of asking. Matters may be 80% agreed, but we need the other 20%. We have one new administration in the United States. The outcome of the Indian election may give us another.
In the mean time, we have no choice but to continue to pursue bilateral agreements. I welcome the progress made in last week's negotiations on the free trade agreement with the Republic of Korea, where I understand we are close to reaching an agreement which, again, will benefit both sides.
I am the rapporteur on the free trade agreement with ASEAN, and have to say that the negotiating basis is creating an institutional road block. We need to consider the possibility of looking at a coalition of the willing and able among ASEAN who can, if you like, sign off on an agreement. As with India, there is in my view currently no governmental will to achieve an outcome. After the election, Delhi's incoming administration, whether new or old, must put up, or we the EU must move on to those who want not just to talk, but to arrive at a conclusion.
Finally, I welcome Mr Pannella, the next speaker, who is the new ALDE spokesman on trade. Maybe a visit to the Committee on International Trade would prove appropriate. We would welcome him.
Marco Pannella
Madam President, ladies and gentlemen, I believe that to some extent we could start - given that these terms have been rather widely circulated over the last few days - what we have to do, Commissioner, with a strange kind of comparison between the man of Doha, or ex-Doha - as we hoped - and the man of Davos. I do not feel that this is an adequate distinction, clearly, but it is interesting.
We now find ourselves, as you told us Commissioner, somewhat dependent on events that are not happening in Europe: events in the United States, events in India, and Mr Ford also just reminded us of important areas such as the Association of Southeast Asian Nations or South Korea. The real problem, however, is to what extent we, today, the Commission and the European Union, are capable of withstanding that outbreak of nationalism, which was mentioned a moment ago, and of autarchic ideas and new protectionist illusions, which is liable to make your work, Commissioner, and the work of our European Union too, very difficult.
I believe that, in this electoral campaign, it will be extremely important to understand how far the Socialist Group in the European Parliament, the Group of the European People's Party (Christian Democrats) and European Democrats, and the Group of the Alliance of Liberals and Democrats for Europe can manage, together with other participants, to find a way to develop our proposal, the proposal for which you were made spokesman, Commissioner, and to what extent we can really manage to make it a European proposal and not just a proposal, or I should say, our centre of Brussels against a series of capitals that are each already doing their own thing, as unfortunately happened many times in the last century.
Jacky Hénin
on behalf of the GUE/NGL Group. - (FR) Madam President, there is no point in denying it: during the July negotiations, the Bush Administration and the European Union were caught in their own trap by India and China. What is more, contrary to the hypocritical assertions of liberal economists, for whom the failure of Doha would have been a disaster for poor countries, it was no such thing.
On the contrary, for these countries in difficulty it represented an historic opportunity, in a context marked by significant fluctuations in the prices of raw materials. Even the experts admit, the gains that the poorest countries could have hoped for were well below the tax losses caused by the demise of customs duties in these same countries, duties that would have reached the sum of USD 60 billion.
During these negotiations, the Commission, tangled up as it is in its liberal dogmas, displayed a total lack of responsibility towards the people of Europe, going so far as to propose damaging, even sacrificing, car manufacturing on EU territory in order to succeed in reaching an agreement.
As far as the World Trade Organization (WTO) and the Commission are concerned, there are only consumers and never wealth creators. It is this take on matters that is at the root of the current crisis since, by making competition the be-all and end-all of everything, it is pushing us in the direction of yet more salary deflation, and hence the absolute impoverishment of workers and the methodical destruction of all social protection.
Were the Doha Round to be concluded, it would be a disaster for all nations. Moreover, what is particularly painful in the current context is the fact that, in spite of the considerable damage recorded having been taken on board, there is a desire to continue in the wrong direction, no matter what the cost. There is an urgent need to revolutionise the WTO so that democracy may be established there.
Corien Wortmann-Kool
(NL) The Doha negotiations have been ongoing for some considerable time now and it is to be applauded that Europe has made real progress towards drawing our positions closer together. Europe has put forward a far-reaching proposal on agriculture but, unfortunately, our efforts have not been reciprocated by other countries. This is another reason why it is so important to look at the package as a whole, which means including NAMA (Non-Agricultural Market Access) and services.
You can be assured of my whole-hearted support in your efforts to reach a rapid agreement. As Europeans, we need to guard against protectionist practices, which are increasingly rearing their heads, mainly due to the poor situation with the world economy, but also under the banner of protecting food safety. As Europeans, we need to reiterate our unwavering commitment to the concept of reciprocity. If we are open, then they need to be open too.
What should we be expecting in this respect from the new US President and the package of measures he has just announced? What can we expect from China? It is, in fact, primarily in this regard that we look to you to act, since, in these times of economic and financial crisis with mass redundancies and shrinking economies, it is precisely this market opening that has the potential to further our interests.
Madam President, our questions have been framed with the intention of highlighting the benefits our citizens can expect from such a package of measures and what we are able to offer in such a package. I fully understand that you cannot respond to these questions in the short time available here, but I want to challenge you, in the coming weeks and months, to be transparent when communicating with citizens about the issues on the table and what these mean for them. This is of particular importance as the European elections approach, and I hope we can count on you to keep this matter high on the agenda.
Francisco Assis
(PT) In the context of this very serious financial and economic crisis, it is absolutely essential to make progress in concluding the Doha negotiations.
At a time of crisis, there is always a tendency to give way to the temptation of protectionism. Protectionism is actually a kind of neurosis which tends to affect societies and states at times when they are faced with serious crises, such as the one we are experiencing. We must therefore clearly fight against the possible emergence of this protectionist temptation, because we know from history where that leads us. It leads to the general impoverishment of the world community and in no way contributes to solving the grave problems that confront us. One thing, however, is protectionism, which is to be criticised absolutely and should be resisted, and another, quite different thing is the need to guarantee the protection of legitimate interests in the various areas of the world into which we are divided. That is where the European Union also has an obligation to uphold the interests of Europeans, and not just the interests of Europeans as consumers, but also the interests of Europeans as producers.
That is why it is important to proceed with the multilateral Doha negotiations. Whilst we know that protectionism is in fact a mistake, we also know that uncontrolled liberalisation of international trade inevitably leads to very serious disasters from an economic and social point of view. The only way to avoid such uncontrolled liberalisation is by possibly establishing an agreement in the appropriate forum, that is, the World Trade Organization, a multilateral agreement that establishes rules to safeguard the legitimate interests of all the parties concerned. The role of the European Commission and of the European Union, in this case too, is precisely to restore Europeans' confidence.
There is also a crisis of confidence in Europe today in terms of the capacity for defence and political regulation of those who represent it, whether the Member States, the European Commission or the European Union as a whole. Therefore, the challenge we face is precisely that of helping to put an end to this crisis of representation and confidence by ensuring that we are advancing along the right path. The right path, in this case, is to guarantee a multilateral agreement which safeguards all our legitimate interests.
Georgios Toussas
(EL) Madam President, a strategic choice of the European Union and of the bourgeois governments, in the middle of the deep capitalist crisis - a crisis in the accumulation of capital and overproduction which is also infesting the Member States of the European Union - is to use the World Trade Organization as an important prop with an active role in imposing the full liberalisation of trade and commerce, privatisations and takeovers and the penetration of the European monopolies into new markets. The aim of the Doha Round talks is to coordinate an all-out attack by capital, so that the multinational companies can plunder the raw materials of third countries and increase the exploitation of the workers throughout the capitalist world. The anti-grassroots common agricultural policy is the consideration for promoting the objectives of the European Union to liberalise the markets in non-agricultural goods and services in order to safeguard jobs in the imperialist pyramid. Obviously, we are interested in international trade and its development on the basis of mutual benefit. However, it is impossible, under capitalist conditions, for global trade to be equal and based on mutual benefit. That is why the fight by the workers in an anti-imperialist, anti-monopoly direction urgently needs to be stepped up, in order to bring about radical change both at international level and in each individual country.
Nils Lundgren
Madam President, the Doha Round broke down last year. This is an extremely serious state of affairs. Progress towards global free trade over the last few decades has lifted an incredible number of people out of poverty on a scale that has actually changed the world. Now, however, the world's economy is in a very deep crisis. This is not a result of free trade and this form of globalisation, but a result of a global financial crisis. In this way, the situation is similar to the one we experienced at the end of the 1920s.
This sort of financial crisis results in a global depression. The last time, it brought Hitler to power. It led to the horrors of the Second World War and to 50 years of communist slavery throughout half of Europe and half of Asia. These are important issues that we are talking about here. The most important cause of the global depression at that time was a resurgence of protectionism. Country after country introduced duties, quantitative restrictions, 'buy domestic' rules and competing devaluations.
There is actually a high risk of this state of affairs being repeated this time round. There are many worrying signs. President Obama actually won the election from a protectionist platform. We are seeing the first signs. There is now a large package on the table which does, in fact, include a 'buy American' clause relating to steel for the construction industry. This may be the beginning.
If the door has been opened, other countries will discover that they can do something similar, given how bad things look. Those countries that are currently badly affected around the world and within the EU will be tempted to promise their workers and their undertakings protection against foreign competition. The trends are clear to see. If this process starts it will not be possible to stop it. This really will be disastrous.
The EU is the largest trading bloc in the world and therefore has considerable responsibility. In the area of commercial policy, the EU speaks with one voice, and, for once, that is a good thing, but what will that voice actually say now? There are grounds for pessimism.
The key to success lies in the agricultural sector. However, the campaigning by France and Germany to get the EU to buy in milk powder and butter and to start subsidising the export of dairy products does not bode well. This is the politics of small-minded self-interest instead of statesmanship.
Therefore, the Council and Parliament should immediately issue clear statements to the effect that the EU will defend free trade throughout the world and open up the way for progress in the trade in agricultural products. Nothing can be more important than that. Thank you for the opportunity to speak.
Christofer Fjellner
(SV) I would like to begin by agreeing with the previous speaker that the Doha Round is extremely important, but I would like to add that it has probably never been more important than it is right now. I believe that, precisely in the midst of this financial crisis, we have a greater need than ever before to show that the global trade system actually works.
To put the Doha Round behind us and say that we cannot achieve global agreements on trade would, I believe, be a disaster that could undermine the whole of the global trade system. The failure of the Doha Round will probably never be more costly than it is right now.
The fact that the Doha Round is more important now than ever before is precisely due to the financial crisis. As I see it, the greatest risk that we face with this financial crisis is not the lack of capital for the lending market; the greatest risk is that it triggers protectionist trends. We have seen this throughout history. It happened during the 1930s and literally resulted in disaster for the world's economy, and it also happened in the 1970s.
I believe we can already see signs that the world thinks it can solve these fundamental problems by means of greater protectionism, despite the fact that there is a risk of the protectionism spreading and creating an even greater crisis in the world economy. This is happening in the area of services, financial services and the trade in services, in particular. In the financial services sector we are seeing protectionism increase very rapidly.
Returning to the Doha Round as it looks today, the main criticism that I had during the entire period that we were negotiating in the Doha Round is probably that it began to be about agriculture, agriculture and more agriculture. I think that this is an extremely narrow agenda, and I actually think that world trade deserves a very much broader approach, particularly in light of the fact that agriculture is a relatively small part of world trade if we compare it with industrial goods and services combined, for example. I also believe that it accounts for a relatively small part of the growth potential, particularly, perhaps, here in Europe. New opportunities for access to markets and new market openings globally, in particular for the trade in services, but also for industrial goods, are, I believe, most important for setting the wheels in motion and reviving global growth.
I would therefore like to ask the Commission a question. What does the Commission intend to do and what initiatives does it have underway to enable the broadening of the Doha Round in order to get us away from this tiresome situation in which we are all sitting around and reproaching everyone over agricultural trade, agricultural trade and only agricultural trade, when we know that what the world economy needs is a very much broader trading agenda that also includes trade in services and industrial trade. Thank you very much.
Mairead McGuinness
Madam President, I should like to welcome the Commissioner. Her predecessor, Mr Mandelson, was well known in Ireland, for reasons with which I am sure she is very familiar.
The issue of the Doha Round is not being talked about amongst the people of Europe. It is being discussed in places like this, but when I meet people who have lost a job, for example, they do not say, 'Let's do Doha'. So I think there is no connection between Doha and economic development, despite all of the theory that is advanced here.
On the globalisation of financial markets, I could suggest that this is a case where globalisation has failed us - although perhaps it would be fairer to say that it is the regulation of financial markets, or the lack thereof, that has failed us. I am interested in Commissioner McCreevy's recent comments to the effect that some of the problems in this area have been caused by Member States' regulators building empires. That is perhaps for another debate, but it exemplifies how, though we talk of globalisation as being a great thing, that has not been true in the financial sector.
On agriculture - which was addressed by the other speakers just prior to me - I gathered that agriculture was not the sticking point at Doha. But it is a very serious issue and one that I have huge concerns about. Maybe it is because I am older than the last speaker - who is in my political group - that I regard agriculture as rather important, because it produces food and is therefore higher up the scale than he placed it. I think we should remember that. We voted in this House on a report that I produced about global food security. We are concerned about it, as we should be. It should be an issue that is discussed at the Doha level.
Another issue is how European producers - farmers - can be competitive when in the European Union we have different, higher, standards of animal welfare in relation to the environment, which are not addressed at the WTO. You will only bring our citizens with you on this journey if those issues are addressed at the WTO. Quite frankly, I think there was never an occasion when we needed direct discussion of these things in this Chamber, and in Geneva, more than we do now.
I would ask you if, in your concluding comments, you could address some of those very real issues, so that people realise that they are being discussed. I do not see the Doha Round developing at the speed that you are suggesting. Perhaps I am wrong.
Paul Rübig
(DE) Madam President, Commissioner, ladies and gentlemen, in the context of the Doha Round, it would interest me to know how the Directorate-General for Trade intends to safeguard the tariff quota that underpins the competitiveness of the European fermentation industry. The tariff quota serves a very important function, because the fermentation industry must remain internationally competitive.
Secondly, how will you respond to the steel clause that the US Congress has just adopted, which would prohibit the use of EU steel in the United States?
Czesław Adam Siekierski
(PL) Madam President, the objective of the Doha Round was to help the poorest countries with their development, to lift them out of poverty. On one hand therefore, we must do everything to help, but on the other hand we must not forget our own businesses or farmers.
I would therefore like to ask a question: how can we protect our small and medium-sized enterprises from bankruptcy, and how can we protect our small farms from competition from China, India or Brazil? Let us say loudly and clearly that, in order to import any kind of product to the EU, irrespective of whether this is shoes or beef, specific standards must be met. Then we will be able to speak of equal competition.
Completing the negotiations in the coming months will be extremely difficult, because there is a lack of political will on the part of the leaders who really count in the negotiations. There is a danger that protectionism will increase because of the current world economic crisis.
Zbigniew Zaleski
(PL) I would like to say that, while listening to the last debate in Doha in Qatar, I had the impression that the developing countries have a grievance against us, the developed countries. Perhaps it is a kind of echo of former colonialism, or that they are accustomed to receiving direct aid, and so to receiving a kind of charity. It seems to me that wealthy countries can help through good trade, good standards, and training. Nothing is more essential than to make local enterprise independent, and build horizontal relations between the countries of Africa, Asia and also Latin America. I also think that it is precisely providing services that teaches management, cooperation and good standards. In connection with this, the accent on opening the market to services is very important for both sides.
Mairead McGuinness
Madam President, thank you for providing me with another minute, because it is important for my comments about agriculture. There is an impression that European farmers are the only ones with concerns. However, the truth is that at Doha the Indian negotiators are concerned about their small farmers and the dire consequences that a move to free trade would have not only for individual farmers but also for social stability in their country. So the issue of agriculture is across all of the negotiating partners and we need a little bit of honesty about that. Commissioner, perhaps, again, in your concluding comments you might address that.
Catherine Ashton
Member of the Commission. - Madam President, I shall try to address briefly the concerns that Members have raised.
Mr Papastamkos, I agree with you on the legal and regulatory burdens. It is very important that these are addressed properly. It is important to resolve them, and I also agree on the importance of safety in that context.
A number of Members, notably Mr Lundgren and Mr Rübig, as well as Mr Papastamkos, talked about the 'Buy American' provision that is currently going through Congress. Members will know that this is based on the 1979 Trade Act. We already have that provision, but through the Government Procurement Agreement we have reciprocal arrangements whereby nations which sign up to it can bid for those projects. What we are hoping - and we have been talking to the Americans about this - is that we end up where we were before. I have read the legislation. I too am very concerned about it.
I am going to America at the end of February to meet the new United States Trade Representative, who, we hope, will have been through his confirmation by then, and Members can rest assured that these are very important issues to be raised.
Mr Ford raised some of the issues about bilateral relations. Korea is progressing, and on ASEAN I am looking for the flexibility which Mr Ford and I have discussed before, in order to try and move forward on that, but I agree too that there is no substitute in terms of value and importance for the multilateral arrangements.
On what we said about India, Prime Minister Singh has made it clear he is very committed. I agree with Mrs McGuinness that the question of agriculture for India, which I shall also return to, is very important. I was with Kamal Nath in London last week, debating Doha, and he as Trade Minister for India raised exactly same the point as Mrs McGuinness about the incredible importance of low-level subsistence farmers. I fully agree with her comments and indeed with what the Minister was saying.
Mr Pannella, I do not think that we are quite at the mercy of events. I think we as Europe have to push forward, use our influence and make it absolutely clear that we agree with what you said about the critical importance of battling against protectionism. It is a big challenge and one of the challenges contained within it is communication, making sure people understand.
Mr Hénin has not stayed for my response, unfortunately, but it is not a matter of sacrificing industry for consumers. This is about industrial growth and development. It is about protecting workers' jobs, because we know the importance of trade and export to doing precisely that. As for institutional change at the WTO, we could spend our time on that, but I want to spend my time on finding practical ways through this difficult economic period.
Mrs Wortmann-Kool talked about services. I agree this is very important. It is very important too to be transparent. I could not agree more with that.
Mr Assis, protecting our interests, not protectionism, is absolutely right. There is a fundamental difference that we have to be clear about, and we have to make sure of protecting the work force in all of this.
On agriculture, as I said, it is critically important to make sure that we are able to develop our industries. This is about food production, and it is very important in the Doha round. My colleague Mariann Fischer Boel has worked very hard to make sure that the European position on agriculture is secure. It forms a fundamental basis for all the work that I do in our bilateral, regional and multilateral talks to make sure that the best opportunities are provided to protect all of our agriculture in the future.
As for the fermentation industry, Mr Rübig, I understand these issues are currently being discussed, but I will be more than happy to come back to you with specifics.
Finally, on small and medium-sized enterprises, Mr Siekierski, it is very important that we are protecting our small businesses. I am working closely with Günter Verheugen to get enterprise and trade collaborating effectively to make sure that we provide opportunities for small businesses to tell us where they need markets to open, to support them in helping those markets to open, and to support them in trade.
President
The debate is closed.
