. /.WORLD TRADE
ORGANIZATIONG/AG/NG/W/45
5 October 2000
(00-4071)
Committee on Agriculture
Special SessionOriginal:  English
THIRD SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
28-29 SEPTEMBER 2000
Statement by the European Communities
Introduction of the EC paper on Export Competition
It is clear from papers already tabled that export competition is a major, perhaps the major
concern for some Members.
The EU fully recognises the importance of this topic.  Export competition is one of the issues
covered by Article 20 and we fully accept that it is a subject which must be addressed.  But it cannot
be addressed in the partial way it was dealt with in the Uruguay Round.
At the end of that Round, clear, effective and transparent rules were introduced for export
subsidies;  a commitment was made to negotiate discipline on export credits;  rather vague rules were
set for food aid and no parameters at all were set for the operation of state trading bodies or other
export monopolies.  What has been the result?
On export credits, WTO Members undertook, in Marrakesh, "to work toward the development
of internationally agreed disciplines to govern the provision of export credits, export credit
guarantees or insurance programmes and, after agreement on such disciplines, to provide exportcredits, export credit guarantees or insurance programmes only in conformity therewith ".  Nine
months after the agreed date for starting Article 20, disciplines foreseen in an agreement reached in
Marrakech in 1994 have not yet been agreed.  Of course, negotiations have been going on in the
OECD for years, but it is only recently that they ha ve moved on.  It is fair to recognise that progress
was made at the latest meeting of negotiations, which took place in Paris early this week.  Hopefully
an agreement could be reached at the OECD by the end of the year.  However, it must be clear that
this agreement can only be a first step for further improvements disciplining export credit practices so
that these become more market-oriented, and that these disciplines should be integrated on the new
WTO Agreement on Agriculture.
On food aid, we see grants of food aid going up when the world is in surplus –when food aid
is less needed-, and down when supplies are short.  And we even see pledged food aid given in the
form of credit, adding debt to hunger.
And state trading enterprises can continue to use profits in one market to subsidise sales to
another with no quantitative or budgetary limits on their actions.
This isn't a serious way to move towards an undistorted market.  And it isn't a good way to
move towards a serious negotiation.  In the last Round, the EU accepted clear discipline on export
subsidies, the means by which we bridge the gap between our fixed market support levels and the
fluctuating world market.  We have stuck to these disciplines and we have faithfully reported to the
WTO the volume and value of our export subsidies.  The result has been that, as our system is theG/AG/NG/W/45
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only one which is disciplined and on which there are clear, transparent and well known statistics,
some Members appear to believe that all the problems of the world market are due to our policies.
A moment's reflection will show that this is wrong.  If food aid is given not to alleviate a
crisis in food availability but as an export prom otion measure, it is the equivalent of a 100% export
subsidy.  If a country which maintains producer returns on the face of fluctuation prices by deficiency
payments provides subsidised credit and credit guarantees, then it provides a far more effective means
of under cutting world prices and distorting worl d trade, than a country which simply provides a
refund to bridge the gap between fixed internal prices and fluctuating world prices.  And a state
trading company which decides to use a sudden profit it has made in one market to finance an
aggressive drive into another, is distorting trade just as surely as an aggressive user of export
subsidies.
In short, the outcome of the Uruguay Round on export competition put some policy
instruments under a spotlight and left others hidden in the dark.  This has contributed to a sense of
grievance on both sides of the debate.  A negotiation in which both parties start with a sense of
grievance is not likely to succeed.  So we need a complete debate.  And we need a balanced result,because it is only through progress in a balanced way that we can achieve the object set out in
Article 20 of progressive reform.
The paper which the European Community has tabled for this meeting proposes a work
programme to achieve this result.  I hope delegations will be prepared to give it serious study. We arenot calling for unilateral concessions from others whilst contributing nothing ourselves.  We are
prepared to move further on export subsidies.  But on the clear condition that there is equivalent
action on other sources of export trade distortion.
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