WRITTEN QUESTION E-0820/04 by Ilda Figueiredo (GUE/NGL) to the Commission. Agriculture — negotiations in the context of the WTO.
Date: 2004-03-15
Institutions: European Parliament, Provisional data
Subjects: World Trade Organisation, agricultural surplus, export aid, export credit, export refund, food aid, monopoly, tariff negotiations, trade restriction

C 88 E/232

Official Journal of the European Union

EN

8.4.2004

(2004/C 88 E/0235)

WRITTEN QUESTION E-0820/04

by Ilda Figueiredo (GUE/NGL) to the Commission

(15 March 2004)

Subject: Agriculture (cid:1) negotiations in the context of the WTO

In recent statements made in the United States (in Arlington, Virginia and Washington DC) Commissioner
Franz Fischler said ‘The Doha mandate is also about export credits and surplus disposal in the guise of’food
aid‘, used mainly by the US. It is about export monopolies, whether Canadian, Australian or from New
Zealand. The fact that in a recent dispute both the US and Canada could claim victory is an obvious
demonstration of the absence of clear WTO rules in this area. It is also about other, less discussed forms of
export distortion, as the impact of the differential export tax in Argentina on its soybean trade indicates.’

In view of this, can the Commission say what information it has regarding the situations referred to by
Commissioner Fischler?

Answer given by Mr Fischler on behalf of the Commission

(29 April 2004)

In the context of the Doha Development Agenda negotiations, the Commission is pursuing ‘full parallelism’
regarding all instruments of export competition. This means that all forms of export subsidies need to be
disciplined in this Round. This was not the case in the Uruguay Round where EU export subsidies have
been subject to a reduction commitment. Other export competition instruments such as surplus disposal
under the guise of food-aid and certain practices of State Trading Enterprises (STEs), however, remained
undisciplined. Trade-distorting practices such as differential export taxes have to be considered as well.
Also export credits, although they are often export subsidies subject to some disciplines under the World
Trade Organisation (WTO) Agreement on Agriculture, are not subject to reduction commitments as other
export subsidies are.

To give a few examples of these practices, the United States have recently accumulated stocks of skimmed
milk powder in the order of 500 000 tonnes, at the same time we have seen an increase of disposals of
these stocks in the form of international food aid up to a level of around 70 000 tonnes annually very
likely displacing commercial operations. The total volume of world trade in this product is approximately
1 million tonne, the proportion of United States food aid in that world trade is significant. The EU,
Canada, Australia and New Zealand have expressed very serious concerns about this development. This
issue has recently been raised by the Commission at the Food and Agriculture Organisation (FAO)
Consultative SubCommittee on Surplus Disposal (CSSD).

Also the United States has a budget around USD 4,5 billion for export credit guarantees for 2005 after
having used USD 3,2 billion for this type of export support in 2003. These export credit guarantees
facilitate exports where otherwise these exports would most likely not have occurred. The Commission
followed the work on disciplines for agricultural export credits which has been done at the Organization
for Economic Cooperation and Development (OECD).

Also the Commission is concerned about monopolistic practices of some STEs. To give an example
Fonterra of New Zealand controls according to its own data 1,6 million tonnes of exports of dairy on a
total of 1,8 million tonnes of production. Concerning export taxes the Commission has the example of
Argentine oil crushers that enjoy the supply of raw material without taxes, whereas foreign crushers if
provided with Argentine soyabeans have to pay a price for raw material increased by the tax. The tax
therefore is considered to be trade distorting.

In view of the above it is obvious that any new Community commitments on export refunds will have to
be matched by other WTO members’ commitments regarding their export competition instruments.