Peter Mandelson accused of ‘falacious statements’

EU farm leaders have accused trade commissioner Peter Mandelson of making “fallacious statements” about the benefits of a WTO agreement, without explaining the full consequences for the EU food industry.

The comments, contained in a formal “declaration” by EU farmers’ body COPA, have been made just ahead of a key meeting of world trade ministers in Geneva starting next Monday (21 July).

That meeting is intended to finalise the “modalities” of the Doha Development Round, putting actual figures to future cuts in domestic farm support, import protection and export incentives.

“I find it impossible to understand how commissioner Mandelson can press for a trade agreement which will make consumers in the EU even more dependent on imports for their basic food supplies at a time of a world food crisis,” said COPA president Jean-Michel Lemetayer.

“European farmers have always supported the need for fair multilateral trade rules but, even assuming the best possible outcome from these trade talks, it will mean a €30bn (£2.4bn) annual loss for the farming sector.”

The meat processing sector would be particularly badly hit, with over half a million job losses predicted as more meat was imported from the likes of Brazil.

What the declaration says:

  • Mandelson claim: Failure to secure a WTO deal will lead to further protectionism.
  • COPA response: If there is no agreement in WTO, the existing agreement will stand. This prevents all members of WTO from increasing protectionism such as tariffs.

  • Mandelson claim: Food protectionism will not feed the world.
  • COPA response: No it won’t, but nor will liberalisation. It is not lack of trade which has caused the food crisis, but lack of production to keep pace with demand.

  • Mandelson claim: The biggest losers (if WTO fails) would be the poorest countries – they are the most dependent on access to other developing and larger markets.
  • COPA response: No. The biggest losers would be the major agricultural exporters who are pressing most for increased market access, namely the USA, New Zealand, Australia, Canada and Brazil.

  • Mandelson claim: We have not sacrificed European farm production in negotiations.
  • COPA response: The commission’s own study shows that there would be huge losses for the farming sector, of over €18bn (£14.4bn) annually. But their study only covers cereals, beef, pigmeat, poultry and dairy. The full loss to the farming sector will be €30bn (£2.4bn). This means a cut in farmers’ net returns of some 25%.