An eagerly awaited European Union offer to open its agricultural markets drew a dismissive reaction from the United States and other countries yesterday, dashing hopes for revitalizing global trade negotiations.
The E.U. offered to cut tariff rates on its farm products by an average 46 percent -- from 22.8 percent to 12.2 percent -- if other countries take similar measures. European Trade Commissioner Peter Mandelson called the proposal "the most extensive the E.U. has ever offered" in such negotiations and warned that he could not go further. "This is Europe's bottom line," he said.
But officials from other nations said the proposed market-opening measures were substantially more modest than they appeared, especially because the E.U. was insisting on sheltering large numbers of "sensitive" products such as beef, poultry and sugar from deep tariff reductions.
That, they said, was a discouraging setback at a critical moment for the Doha round, the negotiations launched in late 2001 with the aim of significantly lowering barriers to trade among the 148 nations in the World Trade Organization. A major WTO meeting is scheduled for mid-December in Hong Kong but may collapse unless the major participants can narrow their differences on key issues, primarily agriculture. Opening world markets wider to farm goods is intended to help achieve the Doha round's top goal, giving developing countries more of the benefits of global trade.
"Overall, we're disappointed," said Rob Portman, the U.S. Trade representative, after a video-conference call in which Mandelson presented his offer to trade ministers from Brazil, India and Australia. The E.U. offer, Portman said, not only fell short of the steep tariff cuts that Washington has proposed, it did not match the 54 percent average cuts proposed by Brazil and other developing countries.
A more accurate calculation would put the E.U. offer at a 39 percent average cut, Portman said -- barely more than the farm cuts agreed in the 1994 Uruguay round, which has been widely disparaged for failing to open agricultural markets much at all.
Several trade experts said that yesterday's developments virtually ensure that the Doha round will achieve modest results at best.
"I was betting earlier this week that the Europeans would come up with an offer that wasn't really good but not bad enough to cause Hong Kong to be canceled," said Jeffrey J. Schott, a scholar at the Institute for International Economics. "I think that's what they've done." He added, "If this is as good as it gets, it's not going to provide the kind of substantive package that makes a meaningful difference to international trade and promotes development."
Portman stressed that the effort to seek a successful round would continue. "We will not give up," he said. When asked how a favorable outcome could be salvaged given the E.U.'s assertion that it could make no further concessions on agriculture, Portman replied, "They say it's always darkest before the dawn."
Brazil's foreign minister, Celso Amorim, said at a news conference in Brasilia that the European offer was "insufficient," and an Australian official used similar language. The Australian official declined to be quoted by name, citing an op-ed article in the Wall Street Journal yesterday by his country's trade minister, Mark Vaile. "The negotiations are in crisis," Vaile wrote, mainly because of "the reluctance of some of the world's richest countries, particularly those in the European Union such as France, to substantially reduce high farm tariff barriers." The official said yesterday's offer by the E.U. did not change Australia's assessment.
Reflecting the potent political clout of his nation's farmers, French President Jacques Chirac recently has sought to constrain Mandelson's room to maneuver, warning Thursday that France might block a deal even if other European countries supported it.
"I hope the E.U.'s partners have the understanding and realism to see that this is all the E.U. can offer," said Martin Bartenstein, Austria's economy minister, in an interview. "President Chirac was very outspoken. If the French president uses such words, that's a signal to the [European] Commission and also the E.U.'s partners."
The E.U. offer came with conditions. One was that the global talks must soon make major progress in opening world markets for manufactured goods and services, rather than focusing exclusively on agriculture. The United States also supports that goal.
But other conditions are objectionable to Washington. The E.U. demanded that all WTO member nations recognize its food producers' right to regional names, called "geographical indications," such as Parma ham and Kalamata olives.