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26th Jan 2020

Chirac threatens to veto WTO talks over farm aid

At a meeting meant to stress the EU's unity of response towards globalisation, French president Jacques Chirac threatened to use his veto in the upcoming world trade talks.

Speaking at a gathering of EU leaders on Thursday (27 October), Mr Chirac warned he would veto a World Trade Organisation deal, if EU negotiators, headed by trade commissioner Peter Mandelson, agree to more concessions on farm aid than is acceptable for France.

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"It is out of the question for us to make another step", said the president referring to his government's commitment to defend a farm reform deal from 2003.

His intervention, which publicly breaks with the EU's stance on the matter, comes as the bloc is later today supposed to unveil a new compromise proposal for the WTO talks.

European Commission president Jose Manuel Barroso said Brussels' new farm offer - which is expected to include proposals to cut EU tariffs on agricultural imports - would be conditional on other countries making concessions in areas such as industrial goods and services.

But Mr Barroso warned on Thursday that "time is running out" to get a deal.

WTO members are supposed to meet mid-December to try and hammer out the basics of an agreement to boost the world's economy and help poorer developing nations.

But France has recently been at the vanguard of a group of EU countries putting pressure on both Mr Mandelson and EU farm commissioner Mariann Fischer Boel not to make too many concession in the world trade talks.

It first made its move after Mr Mandelson recently suggested the EU would cut up to 70 percent of trade-distorting subsidies.

Although the commission has the right to negotiate on behalf of the EU, any deal it strikes has to be approved by all 25 member states.

Aside from casting a long shadow over Thursday's globalisation summit, Mr Chirac's comments also indicate that London's hopes of recasting the EU budget - up for discussion again in December - away from heavily subsidising European farmers are set to be dashed.

EU farm subsidies make up the lion's share of the bloc's budget at around 40 percent, with French farmers benefiting most from EU largesse.

Banana ruling

Meanwhile, the WTO on Thursday ruled against the EU's proposed new banana tariffs.

The WTO arbitration body backed a claim by a group of eight Latin American countries that a reduced EU tariff of €187 per tonne breaches global trade rules.

In a statement, the commission expressed "disappointment" with the ruling, which it said it would study carefully.

"We believed that the system we proposed would have maintained access to our markets in a fair manner", said Mrs Fischer Boel reacting to the ruling.

"We calculated the proposed tariff in a neutral and transparent manner, based on a comprehensive legal and economic analysis".

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