Mr President, the Commission's proposals for the WTO negotiation modality, or rules on agriculture, were unanimously supported by Member States at the recent General Affairs Council, following earlier discussions with various trade policy groups and the agriculture fora. They have now been submitted to Geneva to be considered, along with the proposals of the other members of the World Trade talks, including the United States, the Cairns Group and the developing countries. Agreement on the rules under which the new agreement will be concluded is due by the end of March this year, and agreement on the new round itself by the beginning of 2005. But let us call it as it is. There are marked differences in the positions of the main negotiating parties, and there will be pressure on all, including the European Union, to compromise. The European Union negotiates at the World Trade talks on the basis of a mandate which was approved by the Council of Ministers back in September 1999. That was subsequently endorsed by the General Affairs Council. That mandate is based on the Agenda 2000 agreement, one of the main objectives of which was to prepare the EU for the WTO negotiations. Last December the Commission presented a draft paper which it said is consistent with the EU's negotiating mandate at WTO level, as approved by the Council in 1999. It is consistent therefore with Agenda 2000, and will not require changes to the common agricultural policy; the EU level of export subsidies and domestic support in the so-called 'yellowbox' are already below the levels of reduction commitments proposed; the market access proposals can also be accommodated without disrupting EU markets; and the EU is already committed to reducing tariffs and quota barriers on imports from the least-developed countries and from all developing countries, as proposed in the paper. Most Member States question the Commission's approach in making substantial reduction commitment offers at this stage, given that there will be pressure to make further concessions as negotiations proceed. Ireland and France had difficulty with a number of specific issues, and a small number of amendments were introduced at the Council to meet these concerns. The most important of these issues for Ireland related to improved market access, or the reduction of import tariffs. Following pressure from Ireland and France, the Commission provided a declaration in the Minutes of the General Affairs Council to the effect that it would submit the proposals on market access to the Council, would remain vigilant in the negotiations in relation to products which are exposed to international competition, and would take particular account of sensitive products. We also recorded in the Minutes a declaration that our acceptance of the Commission's proposal is on the basis that, at most, minimal tariff reductions will be applied to sensitive sectors, especially beef and butter. The Irish also had further concerns in relation to domestic support, the redemption of the 'bluebox' and the exemption from reduction commitments of direct payments which are of vital importance to our farmers. In 2002, 60% of Irish farm incomes were in the form of direct payments to producers which qualify for 'bluebox' exemption. The retention of export subsidies is also a major issue to us, as a major exporter of agricultural and food products to third countries. We are particularly dependent on the continuation of an EU system of export subsidies in order to remain competitive on export markets. Commissioner Fischler contends that his decoupling proposals will reduce production and therefore increase prices, but this ignores the reality of the Commission's World Trade proposals of a decrease of up to 36% in import tariffs amongst other multilateral issues. We still need answers from Commissioner Fischler as to how he is going to square that circle. The 36%, 45%, 55% proposals at World Trade talks, together with the mid-term review of the common agricultural policy – which includes proposals for decoupling and modulation – and the uncertain implications of enlargement, have created a climate of serious mistrust in a Commissioner who wants to tear up an existing decision of EU heads of government after only two and a half years of a seven-year agreement. Yes, we have a duty of care to the developing world, but that must go hand in hand with the duty of care to our own farmers. Notwithstanding the generosity of the common agricultural policy, and as a result of a combination of falling prices, lower production levels and higher costs, aggravated by exceptionally bad weather, they face ongoing and serious declines in income and uncertain futures.

Political group: PPE-DE