Mandelson offers huge cuts in farm subsidies

Last updated at 14:02 28 October 2005

Europe's Trade Commissioner Peter Mandelson today offered huge farm concessions in the world trade talks - including cuts of up to 60 per cent in the EU's highest agriculture import tariffs.

The move came a day after French President Jacques Chirac warned he would scupper the so-called Doha Round rather than let Mr Mandelson negotiate away the Common Agriculture Policy.

But Mr Mandelson insisted today the new deal on the table was within his mandate as Trade Commission - "although it goes to the outer limits of that mandate".

A fortnight ago France called emergency talks to try to clip Mr Mandelson's wings and warn him he had gone beyond his brief in the Doha Round concessions he was offering on behalf of the 25 member states.

The Trade Commissioner emerged unscathed, with his mandate reconfirmed by a majority of ministers.

Then yesterday President Chirac used the Hampton Court summit to complain once more that Mr Mandelson was exceeding his brief and that Paris would not tolerate giving up its traditional CAP benefits.

President Chirac is also under pressure from Prime Minister Tony Blair to put EU farm subsidies up for grabs in return for British EU budget rebate concessions in separate negotiations on future European spending.

Under pressure

Today Mr Mandelson turned the screw, insisting his new offer was still within his mandate - "although it goes to the outer limit of that mandate" - and challenged President Chirac to justify his claim.

But he rejected claims he was ignoring French concerns: "Not only is France an important, weighty and influential member of the EU, it is strongly committed to world development and eradicating poverty.

"Of course, France has sensitivities but point to me a trade round or stage of a trade round when France did not express concern and reflect those sensitivities, especially in relation to agriculture.

"But that does not negate France's wider commitment and I look forward to being able to demonstrate convincingly to France that we are negotiating what is in France's best interests".

The new deal on the table in the world trade talks includes a 60 per cent cut in the highest rate of EU farm import tariffs, and a range of cuts between 35 per cent and 60 per cent for lower tariffs. It adds up to average tariff cuts of 46 per cent - from 22.8 per cent to 12.2 per cent.

Substantial offer

Mr Mandelson said it was a substantial offer from the EU, adding: "There was a suggestion by France that the proposals we are making are outside the Commission's negotiating mandate. It is a matter for France to make that claim and sustain it.

"We are quite sure that the undertakings the EU has offered are within the terms of the 2003 CAP reform."

He refused to comment on what the French ambassador to the EU had said when the new proposals were put to the 25 EU ambassadors early today, but acknowledged it would have been unusual if the French ambassador had not referred to President Chirac's threat to block a world trade deal if he did not like the contents.

Mr Mandelson said the deal now on the table from the EU side was the EU's "bottom line" and was contingent on other countries now showing similar compromise in other key areas such as industrial goods and services.

"The EU's offer is substantial, offering new market access in agriculture and driving down trade-distorting farm subsidies.

"We want to move in a way that is tolerable for the EU's reforming agricultural sector. Europe's major partners need to understand that this offer is conditional on immediate movement in negotiations on trade in industrial goods and services.

"Those areas are important in Europe and to developing countries and provide the route to a balanced Doha outcome".

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