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Mariann Fischer Boel

Member of the European Commission responsible for Agriculture and Rural Development

EU-Mediterranean agricultural trade relationship

6th Meeting of the International Centre for Advanced Mediterranean Agronomic Studies (CIHEAM)
Cairo, 2 December 2006

President, Ministers, ladies and gentlemen,

I'm very glad to have the opportunity to speak in this valuable forum. The CIHEAM continues to give first-class intellectual support to our combined efforts to strengthen agricultural trade relationships and foster sustainable rural development around the Mediterranean.

The European Union is strongly committed to these efforts. Our Mediterranean partners are more than just trade partners; you are also valued political partners in the search for common solutions to more general common challenges that we face.

We have had this very much in mind even while we have been working hard to bring success to the Doha Round of WTO talks. We are still working hard towards that end. Following the mid-term elections in the US, I very much hope that the US will shift its position and make progress possible in the early months of next year. But whatever happens in the Doha Round, you can rely on us to give the Euro-Mediterranean relationship all the attention that it deserves.

The importance of this relationship stands unquestioned. However, there are clear signs that some feel frustration at the pace of development of that relationship in commercial terms. There is a sense that early ambition has given way to hesitation.

In view of this, I would like to recall briefly three key principles that underpin our goals within the Euro-Mediterranean relationship.

The first principle is that trade can be a powerful engine for creating wealth. It is not a zero-sum game. Trade gives us access to goods and services that we could not economically produce for ourselves; it spreads new ideas; it encourages us to raise our game. It has had spectacular successes in lifting many people out of poverty around the world.

However, the second principle is that trade should not necessarily be liberalised overnight. Often, economies and societies need time to adjust. In such cases, it may be appropriate to open markets in stages.

In the case of Euro-Mediterranean agricultural trade, as you know we refer to this concept with the term "asymmetry". The European Union is prepared to open most of its agricultural markets to its Mediterranean partners relatively quickly, while in return we accept a less rapid opening of markets which hold interest for us.

The third principle is that open markets alone will not achieve everything we want for our farmers, food producers and rural areas. It's legitimate to help people make the most of the opportunities offered by trade. It's also legitimate to address environmental, economic and social problems in less populated areas, with active policies.

These premises all contributed to the Barcelona Declaration of 1995. Allow me to recall that, under this Declaration:

  • the European Union agreed to liberalise trade with its Mediterranean partners by 2010;
  • the non-European signatories likewise agreed to liberalise trade among themselves by 2010; and
  • both sides agreed to co-operate on a range of agricultural and rural issues.

Those commitments are just as valid now as they were in 1995. So what has happened since then?

In some of the "north-south" trade liberalisation talks, there has been very encouraging progress. In others, we have hit difficulties and the process has not yet taken off. In some cases, there is not yet even a formal negotiating mandate on one side.

Also, the rate of "south-south" trade liberalisation has been slow. Yes, the Agadir Agreement is in place. It's a good start. But we need more. Regional integration is an essential development tool. So we must advance from this starting point to build regional agreements which have the widest possible geographical coverage.

Of course I understand that the road to open markets always has obstacles on it. Nevertheless, we must keep our eyes fixed firmly on our commitments under the Barcelona Declaration, and find a way past the obstacles.

One problem may lie in a misunderstanding. As I have said, the European Union accepts the concept of "asymmetry". But this cannot be permanent asymmetry. Yes, most of our Mediterranean partners need to open their markets in steps over a transitional phase. But this phase must not stretch ahead into the long-distant future. This is politically unrealistic and does not reflect the terms of the Barcelona Declaration.

A second problem may lie in the weighting of priorities. Opening south-south trade is an essential aspect of the Barcelona Declaration, not a side-show. If this is not clearly understood, our negotiation efforts will be seriously unbalanced.

We must face up squarely to these and other problems. But we should also take courage from our successes. The European Union's agreement with Jordan has strengthened my optimism. Not only did we come to an agreement quickly; it was also based on a new approach. We took full liberalisation as a principle, and then established a limited number of exceptions for sensitive products.

This shows that we can be ambitious about opening up trade. And I hope that this agreement will serve as a prototype for others.

What is the way forwards? My message is this: the European Union is ready to do its part. In cases where the talks are already going well, we hope to keep up the pace. In other cases, we invite our partners to come to the table when they are ready. They will find us waiting there. In the meantime, if we can do anything else to help – by clarifying issues, for example - we would like to hear from you.

The offer of help includes south-south trade liberalisation, though of course here, progress is mainly up to you.

Let me emphasise: we do understand that it takes effort to adapt to a more open trading regime. We ourselves have faced challenges in the past in the agricultural sector as we have lowered import tariffs in multilateral and bilateral trade agreements.

Domestically, we have managed these challenges partly by reforming our Common Agricultural Policy (CAP) so that it can achieve policy goals for us without creating problems for our trade partners.

Among other things, following the reforms of recent years the CAP pays our farmers for the public goods that they provide – for example, a clean environment – but steps back from their production decisions, leaving them to farm whatever will bring them the best profits on the market. An active rural development policy ensures that our countryside can be a beneficiary of globalisation – not its victim, whether environmentally, economically or socially.

We are currently discussing how to bring our fruit and vegetables sector more firmly within the scope of this overall approach.

In following through these policy decisions, we have amassed valuable experience which we are eager to share with you, in order to help you to adjust to more open trade and develop a good policy mix for your rural areas.

As you know, we not only share experience but also offer financial support. And from next year, the right conditions will be in place to spend this support more effectively.

In the past, the vehicle for the funding was the MEDA programme. This has had its successes, but there have been problems. There has sometimes been too little coherence between individual good ideas. Also, lack of administrative capacity has meant that some projects were excellent in theory but imperfectly executed in practice.

From January 2007, the new vehicle funding will be the European Neighbourhood and Partnership Instrument (ENPI). We think this change will correct many of the problems of the past. A tighter strategic overview will help us to link up projects, and we will make sure that the necessary administrative capacity is in place. This should bring us much better value from every euro spent.

There are many areas in which useful work can be done to complement the liberalisation of agricultural trade around the Mediterranean. I will highlight just four categories now.

First, we will continue to assist our Mediterranean partners to adapt to our sanitary and phytosanitary (SPS) standards. There have been misunderstandings on this issue in the past. Our consumers demand guarantees that all the food they eat meets the highest safety standards. This means that our SPS standards are not open to negotiation, and they apply in full to all trade: preferential as well as non-preferential.

On the other hand, we don't require exporters to aim at a moving target. The SPS standards must be clear. Where they are not, we will do more to make them clear. And we will do everything else that we can to help exporters respect them with minimal difficulty - because they are not designed to obstruct trade. .

Secondly, I believe much can be done in the area of high-quality production and appropriate labelling.

It's a hard fact of the global economy that some of the world's farmers and food producers can supply the market at very low prices. Sometimes we can compete with them on this basis. But where we can't do so, our weapons must be specific qualities of the sort that will attract higher prices.

This approach has borne fruit in the European Union. In particular, our systems of Protected Geographical Indications, Protected Designations of Origin and Traditional Specialities Guaranteed are very popular with producers. They have been valuable tools for winning recognition of the excellence of individual products, and securing higher returns.

I believe this approach could also be of benefit to other producers around the Mediterranean. This was stated clearly in the conclusions to the 2003 Euro-Mediterranean Conference held in Venice.

Thirdly, it's one thing to have a good product and label it clearly, but it's another thing to tell the customer about it. We can always improve our marketing, and this is another area in which ENPI funding can be helpful. One possible general marketing project is the promotion of the benefits of a Mediterranean diet.

Fourthly, of course challenges related to rural development will be with us for the foreseeable future. Making the best use of available water supplies is still an obvious task. There are also many other fields in which we must foster sustainable development in less populated areas. That means combining economic growth with environmental responsibility. It's not easy to strike the right balance; but it's possible.

I should stress that, like trade, rural development is a regional issue. The European Union can certainly offer valuable advice and assistance in this area. But the challenges involved do not begin and end neatly at national boundaries. If we are serious about meeting those challenges, at least part of our approach must be multilateral.

Ladies and gentlemen, I will make a final point about the projects that can be funded through the ENPI: how you spend much of the money is up to you. Many different objectives are competing for it, but I hope that your respective governments will give agriculture and rural development the priority that they deserve.

To summarise, ladies and gentlemen: the European Union is eager to step up efforts in areas of the Euro-Mediterranean relationship where progress has been slow. We hope you feel the same way.

Thank you.

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