Testing le d’fi fran’ais on Agriculture
According to press reports Mr Chirac told the EU Summit meeting in Hampton Court, England, that France would ‘veto’ a Doha round agreement on Agriculture that required cuts in support or protection greater than those contained in the EU’s 2003 decision on future Common Agriculture Policy (CAP) reforms. Could he do that? Well … the WTO’s decision-making procedures suggest it might be a close-run thing
Chirac’s spokesman qualified the threat as a ‘right reserved’ rather than an an ultimatum:
“Mr Chirac’s spokesman said France ‘reserved the right not to approve’ any outcome of the Doha talks that undermined the 2003 EU deal on farm reform, which set out policy until 2013.
Mr Mandelson outlined his latest proposals in a ‘difficult and frank’ discussion with Dominique de Villepin, French prime minister, on Wednesday, EU officials said. ‘Voices were not raised,’ one added.”(Financial Times)
But France cannot veto, on its own, EC policy decisions on external trade or in WTO where the Commission speaks and negotiates on behalf of all members of the Treaty of Rome (the EC’s fundamental constitutional agreement). Within the EC, a weighted majority voting procedure applies to external trade decisions and France alone does not have sufficient weight to reverse majority decisions.
In the WTO, both France the EC are original members. It’s a unique double dipping arrangement that arises out of the EC’s status as the only large customs union in WTO. The rules on membership say that any government (or in the EC’s case, intergovernmental organization) that controls a customs-territory may be a member of WTO. The EC itself qualifies under this rule, as does France.
So when we get to the final scenes of the Doha round, France, as a full member of WTO, may refuse to join a consensus on the Agreement on Agriculture, even if the other members of the EC go along with the consensus. Normally, this would hold up agreement and cause at least delay and further wrangling to achieve consensus.
But there’s another way to make decisions. The Agreement Establishing WTO (sometimes called the Marakesh Agreement) provides the WTO rules on decision-making. Article 10.1 of the Agreement notes that consensus is the usual way of making decisions but that a Ministerial Conference may put matters to a (simple) majority vote. In such a vote, the EC will have as many votes as it has member states: that is, 25 including France.
Now, suppose instead of allowing France to hold a decision on Agriculture to ransom by refusing to join a consensus, the Members of WTO decided to vote. The EC must vote en bloc (according to the requirements of the Treaty of Rome). As I understand Article 10, it contains the same expectation: France should not exercise its own vote in WTO but must reach an agreement with the other members of the EC how Europe’s 25 votes should be cast. In that internal negotiation, France is faced with the EC’s qualified majority requirement: it cannot unilaterally determine EC external trade policy.
But if I am wrong and France can exercise a vote in WTO independently of the other 24 members of the EC (thus delivering yet another constitutional crisis to Europe), it might just squeeze through. France will have to find 74 other WTO members to vote ‘no’ with it.
Here’s the worst case scenario.
Let’s suppose that the G-33 group of developing countries that want to open up market access as little as possible are not entirely happy with the final agreement and see no harm to their interests in allowing negotiations to collapse, even if this means that Europe and the USA may continue to use export subsidies. They comprise 42 WTO members.
Let’s suppose, too, that the highest protection developed countries in the G-10 (Nine members: Iceland, Israel, Japan, Rep of Korea, Liechtenstein, Mauritius, Norway, Switzerland, Chinese Taipei) take a similar view and that the six ‘recently acceded members’ (6 RAMS: Albania, Croatia, Georgia, Jordan, Moldova and Oman) decide that they have ‘given enough’ in the terms of their accession to WTO and don’t stand to gain much from additional access obligations under a new Agriculture agreement.
That adds up to 57 WTO members who might join France if a vote were called. France would need to find support from seventeen more countries from e.g. the African, Caribbean and Pacific group to which it channels aid, in order to win a majority. That’s would be a big challenge … but not impossible.
Why would 74 countries that would otherwise join a consensus for an Agriculture agreement vote against it if given the chance?
That’s a question for another time. But think of it this way: a vote would not only call Chirac’s bluff but also that of every other government that would prefer to go along with a majority consensus rather than make an overt choice. In the circumstances of a vote, some governments will vote ‘no’ as a means of avoiding responsibility for change.
Tags for this entry: trade There is a breathless quality to media reports on the maneuvers of governments trying to meet the WTO’s self-imposed deadline of 31 October for signs of agreement on Agriculture at the Hong Kong Ministerial Conference in December. The hothouse atmosphere helps governments press beyond established positions. But it would be naive to imagine that the next EC offer in the agriculture negotiations, expected on 27 October, would (or even could) be the outline of a deal with the USA, the G-20 (India, Brazil etc) and the rest of the world Ben Muse has been chronicling the to-ing and fro-ing with an especially well-linked set of posts. Most of the comments he quotes show one or another spokesperson claiming the next few days—and the anticipated EC offer on agriculture on 27 October in particular—are a “make-or-break“ opportunity for the Doha Round. This is an exciting point in the negotiations because the exchanges are flowing more quickly and the high-temperature public threats and counter-threats exchanged between, for example, the French government and the Commission, have produced dramatic (but only partial) evidence of the potential impact of long-needed reforms. But for all the drama this is not the scene where the “fat lady” sings. We are still somewhere in the middle of the Second Act, and there are a few more ‘crises‘ to go before all the elements (some mentioned here) are balanced ready for the final deal. The theatre last few days in Paris and Brussels—in which the Commission found it necessary to make a public show of confidence in Trade Commissioner Mandelson—hints at the bloodiness of low politics. The otherwise diplomatic exercise of trade negotiations becomes a much more vicious fight when the proposals seriously threaten the access of producers (agriculture, in this case, but it could be any others) to the public tit. Politicians who agree to change a specific trade measure that directs consumer or taxpayer funds into someone’s bank account must expect either to ‘compensate’ the change (in the inglorious tradition of European farm policy) or risk paying the price at the ballot box. Governments—and individual politicians—know from experience that the best chance they have of surviving such “leadership“ episodes is to submerge them in a much larger package of measures in which they are bound to have some wins as well as some ‘losses’. That package is not yet ready in the Doha negotiations and, until it is ready—until it includes something on development issues, on sensitive products, on food aid, on precise terms for the elimination of all forms of export supports, and (probably) something on the wretched subject of geographical indications—we won’t see any definitive deal on agricultural market access. Next April—June is my guess for the final scene. Too long to hold your breath; so exhale, breathe calmly, and keep the powder dry (the real shooting is still to come). Tags for this entry: trade A ‘sashay‘ is a figure in square-dancing in which partners circle each other by taking sideways steps, according to the dictionary. It’s a basic move in trade negotiations, too. When an issue such as market access reaches the point it has, today, where the next move becomes “I win, you loose”, the negotiations can sieze-up like a motor without oil. The time has arrived to sashay around to other issues The G-20 group of developing countries, the USA, the Cairns Group and others are telling the EC to move beyond it’s average 25 percent cut in agricultural trade barriers, and the EC is saying it cannot. “… EU officials said the minimum demanded by the US and the Group of 20 developing countries, which includes India and Brazil, was more than they could offer. The G20 is calling for the rich countries to cut farm tariffs by an average of 54 per cent, against the initial EU offer which the US calculates as an average reduction of 25 per cent. The US proposal envisages an average 75 per cent cut.”(Financial Times) The negotiations at this point take on the aspect of a zero-sum game. Whatever advance one side secures represents a proportional loss to the other side. Trade itself is not like that: it’s a positive-sum exchange in which both players win. It may be time for the negotiators to re-discover that positive sum by turning to other issues affecting the outcome in Agriculture such as: When progress is made in some of these areas—that have been discussed now for three years—it should be possible to sashay back to the issue of market access barrier cuts, and see the numbers in a different light. Tags for this entry: trade The French right wing government—especially the Elys’e-ambitious interior Minister (Nicholas Sarkozy)—is trying hard to wound EC Trade Commissioner Peter Mandelson for conceding ‘too much’ in the WTO agriculture negotiations. But they don’t seem to have awakened the ardor of the commentariat. Le Monde, for example, seems less than impressed by the Chirac government’s “irreducible” act. Sarkozy criticized Mandelson for accepting a ‘fool’s bargain’ in the business daily Les Echos. But the editorial in Le Monde today doubts that the right’s populist posturing will have much impact: “La France ne manque pas d’arguments pour défendre le dossier agricole dans le vaste marchandage qui se poursuit sous l’égide de l’Organisation mondiale du commerce. Mais on doit constater, une fois de plus, qu’elle se retrouve isolée, ou presque, dans son combat. En dépit de ses cris de victoire, le gouvernement français n’a pas obtenu la mise sous tutelle de M. Mandelson. Les attaques continuelles de Paris contre la Commission européenne ont diminué sa force de persuasion. Ce n’est pas en s’obstinant dans une tactique défensive, largement inspirée par des considérations de politique intérieure post-référendum, que la France retrouvera son rôle moteur en Europe.”(Le Monde) In the course of the endless bargaining in WTO , France is not short of arguments defending its agricultural policies. But we have to acknowledge that, once more, she find herself almost alone in this battle. Despite claiming victory, the French government has not succeeded in reining in Mr Mandelson. Paris’ constant attacks on the Commission have weakened it’s powers of persuasion. France will not win back it’s role as a leading force in Europe by digging-in on defensive positions inspired for the most part by post-Referendum domestic politics Tags for this entry: trade An important lesson from the last round of WTO negotiations was that economies close to joining WTO should make every effort to get in before the negotiations are over. Russia has given up on joining at the Hong Kong ministerial conference in December, but it has still at least six months after that to complete the accession negotiations. There’s no deal with Washington yet, and it’s unlikely there’ll be one, now, before the December meeting of WTO Ministers “Although accession talks are making steady progress, a small number of outstanding points—including Russian energy price subsidies and import duties on industrial goods such as airplanes—has delayed Russia’s entry, said Maxim Medvedkov.”(Moscow Times) Future agriculture policies and swallowing the constraints of the TRIPS agreement on intellectual property are also controversial in Russia. It’s important that Russia (and Vietnam, for that matter) do everything possible to join before the end of the current round of negotiations. The new agreements reached in this round will apply to all members, including newly acceded countries. But economies that join after the negotiations are over the won’t be able to take advantage of the scheduled implementation delays that current members provide for themselves to introduce the new agreements. As China—which tried to join WTO before the end of the Uruguay Round—found in 2001, a late-commer has to take the new obligations like a cold shower. Tags for this entry: trade 
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High drama and low politics
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Timing is (almost) everything in WTO negotiations
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France gives Mandelson the finger—maybe
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Russia won’t make it into WTO this year
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Amusing, anecdotal, accurate 