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EU goes on offensive in trade talks

(Monday, July 7, 2003 -- CropChoice news) -- Patrick Lannin, Reuters, 07/06/03: PALERMO, Italy - The European Union put top trade partners on notice on Sunday that it expected concessions in global trade talks, now that it had agreed a reform of its farm support system.

"On agriculture, like on other issues, we can now move on to the offensive," Lamy told a news conference after a meeting of EU trade ministers aimed at agreeing the bloc's position before a vital trade meeting in Cancun, Mexico, in September.

The World Trade Organization meeting will be a staging post in making sure the whole Doha Round ends on time. The round aims to reduce trade barriers and give developing nations more from world commerce.

Agriculture is key to the round and a reform of the EU's Common Agricultural Policy (CAP) last month is seen as vital to kickstart the talks.

The CAP involves handouts to farmers and export subsidies worth 40 billion euros ($46 billion) a year, and the EU has agreed a reform package that it says makes the system less trade-distorting.

Lamy, who met with the 15 current EU members as well as the 10 due to join the bloc next year, said the United States and key agricultural exporters such as Canada and Australia had now been challenged to do more to reform their own farm policies.

Washington itself last year approved a multi-billion-dollar agriculture support bill.

But the three countries have also said the CAP reform should only be a first step to a deeper shake-up of EU farm support.

Lamy said ministers had also discussed how the United States could be convinced to back a new system of waiving patent rules on drugs to give better access to life-saving medicines for poor nations who cannot make them themselves.

The United States, pressured by pharmaceuticals firms, was the only member of the WTO to block a deal in December last year that would have solved this issue, which is of key concern to developing countries and therefore important to the whole round.

Adolfo Urso, minister for trade for Italy, which is current holder of the rotating EU presidency, said the EU was optimistic that it could remove obstacles to an agreement.

Lamy said he was also determined to push on with issues that have worried some developing nations, such as how to make competition rules and investment regulations part of the trade system and draw up common rules to ensure smooth trade flows -- the "Singapore Issues."

India has been among those resisting such ideas, saying they will impose excessive burdens and dilute control of its economy.

Lamy said the EU was ready to take some of these concerns on board. But aid groups, which oppose expanding the areas covered by the WTO, were disappointed at the EU ministers' meeting.

"This is an agenda for big business and the developing world and the environment will have everything to lose," said Alexandra Wandel of the environmental group Friends of the Earth.

The EU will on Tuesday meet ministers and officials from 12 mostly Arab Mediterranean nations. Israel and Turkey will also be present. The aim is to agree new rules that will allow an easier circulation of goods throughout the region. ($1=.8725 Euro)