WTO Deal Still Possible

European Ag Commissioner says agreement must happen soon or be put on hold until after U.S. elections.

Hope remains for a new multilateral trade agreement in the World Trade Organization, but a deal must be struck soon says Marian Fisher Boel, Agriculture Commissioner for the European Union.

Speaking at the opening of GreenWeek, Europe's largest food and agriculture exhibition held in Berlin every January, Boel said some kind of deal must be made soon – "otherwise we have lost our chance at least until after the American elections."

She also said that a new deal may be the open door President Bush needs to get his Trade Promotion Authority reinstalled.

Last July the Democrat-controlled Congress refused to re-authorize TPA, a fast track authority that allows Congress to vote yes or no on any trade deal without tinkering with the actual agreement. However, Fisher Boel believes that won't be a problem if a new WTO deal is introduced.

"TPA will be needed to get an agreement in WTO, but I've been informed this is possible on the U.S. side," she says.

Beef/Pork Exports

Fischer Boel hit on a wide range of topics during her press conference, including higher food and feed prices, an increase in the EU milk quota (allowing increased milk production per farm), and increases in EU export subsidies on pork.

"The weak dollar puts the EU exporters in a bad situation," she says, blaming the higher export subsidies on increasing feed prices. "It is simply impossible to make money in the EU otherwise. Farmers are liquidating their herds, putting pressure on prices. That was the reason for reintroducing export refunds in the pig sector. It does not spoil production in developing countries and as soon as we can see the European pig sector entering more smooth water the export refunds will disappear again."

Responding to concerns among European farmers over rising Brazilian beef imports, Fischer Boel said existing traceability laws would be more rigidly enforced, forcing a drop in Brazilian beef shipments to European supermarkets.

"Imports from Brazil will visibly decrease and it could have an impact on price levels in the EU," she predicts.

The EU is a 400 million consumer market, but its farmers produce less and less beef for its own consumption. A lowering of Brazilian beef imports will undoubtedly cause an opportunity for beef farmers in other countries outside the EU, including the United States. Phil Seng of the U.S. Meat Export Federation earlier predicted exports of non-growth hormone beef from the United States would double by the end of the year.

That didn't seem to worry Boel. "Farmers all over the world are looking for markets," she says. "We need red meat, as long as they meet the criteria."

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