The EU and the WTO

16 July 2009
by inadim -- last modified 20 July 2009

The WTO and the multilateral trading system are the core focus for EU trade policy. The EU believes that a system of global rules is the best way to ensure that trade between countries is fair and open.

The World Trade Organisation (WTO) was established in 1995. It is an international organization that sets the global rules for trade between nations. The secretariat of the WTO is based in Geneva. As well as mediating in disputes between trade partners, the WTO is also the forum for negotiations between all WTO members to further open trade between them. As of 2008, 153 countries are members of the WTO. All 27 EU member states are individually members of the WTO, but the EU negotiates and acts within the WTO as a single body.

In 2001, WTO members launched the Doha Round of world trade negotiations. These negotiations were intended to further deepen the openness of global trade, and to address the needs of developing countries in particular.

The Doha Round of world trade negotiations was launched in Doha (Qatar) in November 2001. Named the Doha Development Agenda, this round of trade negotiations aims to take the WTO into a new era. The agenda of the Doha Round is much broader than past global trade negotiations and is specifically targeted at addressing the needs of developing countries. The focus of negotiations has been on reforming agricultural subsidies, improving the access to global markets and ensuring that new liberalisation in the global economy respects the need for sustainable economic growth in developing countries.

EU priorities for Doha

The basic EU priorities in the Doha Round are as follows:

• In market access for industrial goods, the EU wants to create significant new trade flows by cutting tariffs in both developed countries and the growing emerging economies such as China, Brazil and India. The goal is to create new trade between developed countries, but also between developing countries.
• In agriculture the EU is committed to an agreement that reforms farm subsidy programs throughout the rich world in line with the EU's wide-ranging 2003 reform of the Common Agricultural Policy. As part of the Doha Round, the EU has offered to cut farm tariffs by 60%, reduce trade distorting farm subsidies by 80% and eliminate farm export subsidies altogether. The EU also wants to see new market access opportunities for its own processed agricultural exports.
• In market access negotiations for services trade, Doha should bring considerable and real market opportunities for business as well as benefits to consumers world-wide. However, the EU does not seek general deregulation or privatisation of sectors where principles of public interest are at stake, and the EU is also committed to defending the right of WTO members to promote cultural diversity.
• The EU wants the Doha Round to agree a package of development measures including: a special agreement to address trade distortions caused by subsidies to cotton farmers in developed countries; the extension of unlimited markets access to all Least Developed Countries by as many countries as possible; a new global package of 'aid for trade' assistance to help the poorest build the capacity to trade; special measures to help the poorest countries implement any Doha Agreement effectively and without long-term harm to their economies.
• The EU wants the Doha Round to agree a new set of rules to govern the use of trade defence instruments so that they are not abused, and a complete update of the WTO's rulebook for trade facilitation, the standard practice for customs and other border related procedures world wide – a potential source of huge savings for traders, especially in developing countries. The EU also wants to use the Doha Round to improve the protection of Geographical Indications – the special legal identity given to products like Parma Ham and Roquefort cheese that are closely linked to a particular place and tradition of production.

The 2008 Geneva Ministerial Meeting

At the Geneva Ministerial in 2008 the Doha Round came very close a framework agreement on tariff cuts for industrial goods and agricultural exports and a comprehensive package of farm reform in developed countries.

This package would have gone further than any previous multilateral trade agreement. It would have removed almost all remaining tariffs between developed countries for industrial goods and would have included a proportionate contribution from large emerging economies such as Brazil, China and India.

Unfortunately, the meeting broke down over a disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain.

Development in the Doha Round

Source: European Commission