The prospect for achieving a far-reaching global trade agreement went from bad to bleak yesterday, after French President Jacques Chirac took an extraordinarily hard line against proposals to open Europe's heavily protected markets for agriculture.
Chirac said "there is no way we are going to take an extra step" to reduce government supports for European farmers, and he said France might veto any agreement struck under the ongoing worldwide trade negotiations, which are known as the Doha round.
"France reserves the right not to approve" a trade pact it doesn't like, Chirac told fellow leaders from European Union countries at a meeting in Hampton Court outside London. His remarks were reported by wire services.
The French president's comments threw a damper over the global trade talks at a critical moment, less than seven weeks before a scheduled meeting of the World Trade Organization's 148 member nations in Hong Kong.
Efforts to bring the positions of the major countries closer together hit a serious snag last week when the European Union balked at joining other major trading nations and blocs in offering deep cuts in its farm tariffs, and other restrictions on imports. European officials said E.U. Trade Commissioner Peter Mandelson will present a new offer today on opening agricultural markets, the key issue in the talks. But Chirac's words showed more starkly than ever how opposition from Paris is likely to constrain Mandelson from proposing ambitious reductions in trade barriers.
An E.U. offer that is considered weak or uncompromising by other WTO members could spell doom for the Doha round, or at least suggest that the ultimate outcome will be relatively modest in scope. The round, named for the capital of Qatar where it was launched in 2001, is aimed at reducing trade barriers and subsidies in a host of areas, with a particular focus on helping developing countries gain more from world trade. That is why farm trade is of particular concern; developing countries tend to be heavily agrarian, and their officials often complain about their lack of access to markets in rich countries.
With its own militant farm lobby, France is the most outspoken among the 25 E.U. countries in opposing a big increase in imports of beef, sugar, poultry, dairy and other agricultural products. Chirac's broadsides yesterday can in part be viewed as bluster intended to appeal to his domestic audience. And in brandishing the veto threat, Chirac was only stating the political reality that an E.U. member state can block a global accord, even though the European Union negotiates as a bloc within the WTO.
But in vowing to wield French clout if Mandelson goes too far, Chirac heightened fears among officials from the United States, Australia, Brazil and other countries about the European Union's unwillingness to advance beyond its previous offers. The European Union has proposed that most WTO members should cut farm tariffs by an average 25 percent, while a group of developing countries led by Brazil has proposed going more than twice as far and the United States has suggested going further still. Moreover, the Europeans have insisted on retaining the right to protect many more "sensitive" agricultural goods from tariff cuts than have other countries.