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Mariann Fischer Boel

Member of the European Commission responsible for agriculture and rural development

Going on the offensive: a new approach to EU agri-food exports

AGRI consultation of EU exporters
Brussels, 25 June 2007

Ladies and gentlemen,

First and foremost, let me offer you a very warm welcome to this conference on agri-food exports, organised by the Directorate-General for Agriculture and Rural Development.

I've been looking forward to today's event for a long time. Let me take this opportunity to thank everyone involved in making it happen, and I'm glad to see so many people here.

Today's event is mainly about looking forwards. But I think I can first take a moment to look back.

For many decades, with regard to agricultural trade, the European Union has been a giant on the world stage - to the benefit of itself and others.

The benefit to others must be underlined. We are traditionally a net importer. In particular, we import more agricultural goods from developing countries than do the US, Japan, Canada, Australia and New Zealand put together.

On the other hand, we also have a well-established export tradition. We are still strongly present as exporters in many commodity markets, and we are increasingly expanding in high quality and high value product. Our food and drink is known and enjoyed all over the world.

In recent years, the annual value of our exports was between 50 and 60 billion euros, if processing and re-export is included. We have been a net exporter to the US market since 2001. And in 2006, for the first time ever, we were a net exporter to the rest of the world as a whole.

Now is a good moment to recognise that achievement. But now is also a good moment to reflect on how to build on that achievement - and this is what today's event is about.

Of course, that reflection is taking place at a time when a fog of uncertainty hangs over the Doha Round.

I shall not hide my disappointment at the failure of the Potsdam meeting last week, where the US, Brazil, India and the EU tried to reach convergence. This failure does not bode well for the continuation of the negotiations in Geneva this coming month.

The European Union went as far as was humanly possible in order to obtain a result. We came to the table willing to offer concessions in a balanced deal which would have exceeded by three times what we offered in the Uruguay Round.

But results become impossible if others set their demands at levels which they know neither we nor others can reach – and if they are unwilling to offer even minimal concessions on their side.

I hope that all parties to these negotiations in the coming days will seriously reflect on the costs of failure of the Doha Round.

Some months ago, Pascal Lamy estimated the value of what was on the table in the Doha Round at 2-3 times the value of the previous round. Since then, that value has increased further. It would take some courage just to let that disappear down the drain.

I say to our trading partners: Don't expect a rapid return to multilateral dealing if we fail over the coming weeks. A delay of 2 to 3 years could easily turn out to be an over-optimistic prediction.

And don't expect that the substantial concessions rejected in the multilateral framework can be won back in a bilateral deal. The European Union will never be able to offer as much in a bilateral deal as we were prepared to offer in the Doha Round.

Of course, we will labour on even at the risk of being termed "naïve" and we encourage others to match that effort.

By the way, let's not forget that we, too, have important offensive interests in opening up markets around the world in agriculture, as in other sectors – a point which has received very little attention in our internal debate.

Ladies and gentlemen,

Let me now strike a more positive note – because whatever happens in the Doha Round, we will always have a trade strategy which encompasses a much broader range of issues, and we must develop it in the right direction.

I am firmly convinced that we must have an offensive strategy for promoting and exporting agri-food products.

This does not mean that we should abandon all defensive elements in our strategy. No one is talking about knocking down our border protection with a sledgehammer. Rather, I'm saying that we cannot mould our entire strategy around defence. Instead of aiming not to lose, we must aim to win.

I believe this for four reasons.

My first reason is that there is only one direction in which import tariffs will move in future – sooner or later – and that is downwards.

My second reason for recommending an offensive strategy is that new export opportunities are out there - for those who will go and take hold of them.

I was reminded of this very forcefully during my visit to India in March this year. I will say more about this visit in a few moments. The point I want to make now is that this is a market with huge potential.

The Indian middle class is hungry for exciting food and drink experiences that go beyond Indian cuisine. And this middle class is growing at the rate of 35 million people per year – in other words, by the population of a medium-sized European country.

This is why so many foreign companies are getting into position to increase their sales in India. We need a piece of the action.

Similarly, China is seeing a rapid growth in demand for high-quality food and drink products as national income increases.

And of course, we should not limit our ambitions to Asia. There are also possibilities, for example, in the markets of Central America and the Andean Community. And even in the case of Mexico, with which we already have a Free Trade Agreement, there is potential to build on our current dairy export successes if we can create the right political conditions.

However, around the world, many obstacles stand between us and emerging export opportunities. This is my third reason for backing an offensive strategic approach.

In some cases, the main problem is high tariffs. But as you know, more generally, tariffs are just one issue among many. In many target markets, there are also long, long lists of non-tariff barriers – some of which block exports from our side altogether.

These will not go away by themselves. We must make a determined effort to dismantle them.

My fourth and final argument in favour of an offensive strategy is that many of our competitors have already set off down this road. I'm thinking, for example, of the US – which is busy setting up bilateral trade deals around the world.

There will be a high price to pay if we fall behind. If I were the director of a European agri-food export company, I would not want to find myself competing against US rivals in markets where they had preferential access and I did not!

Ladies and gentlemen,

As you know, with regard to trade in general, the European Union has signalled that it will indeed take a more positive, outward-looking approach in future. This fact was set out in the Commission communication of last October entitled "Global Europe – competing in the world".

This is why we are pushing ahead with negotiations for Free Trade Agreements around the world as a complement and not as a substitute for multilateral trade liberalisation. We hope to sign an FTA with South Korea by the end of this year, and with India sometime in 2008.

It is absolutely essential that the agri-food sector helps lead the charge. We have so much to gain; and we also have so much work to do.

So it's time to get things moving.

I would like to underline three things that we need to do, in general terms.

First, business and politicians must link up more closely. It's politicians who do the negotiating about barriers to trade. But you must tell us where to negotiate. We don't want to spend time and energy opening up a market which no European company is interested in supplying. We must decide together what we want, then work out how to get it. Today's event is one opportunity to do just that.

Secondly, Member States and the European Institutions must work together. Because there are diverse export interests within the Union, there has been a tendency in the past to go it alone when trying to pull down non-tariff barriers in particular.

But when we work this way: at best, progress can be slow; at worst, the other side has us for breakfast. The whole point of the European Union is to achieve together things that we can't achieve alone.

Our recent difficulties over meat exports to Russia give a good illustration of this. There was always a temptation for individual Member States to find short-term solutions for themselves, but the long-term cost of not presenting a united European front would have been very high indeed.

Thirdly, if possible, we must join up our export-related policies more tightly. For example, we carry out promotion activities, and we conduct trade talks. But under our current approach, these types of activity are like trains travelling on parallel tracks. They never meet.

Ideally, every activity designed to increase our exports would form part of a coherent whole. If that whole is coherent, it can be greater than the sum of its parts. We are currently reflecting on how best to integrate our promotional activities with our other efforts.

Of course, it's all very well to talk theory. But I can report that we have already begun to take a new approach in practice. And there are signs that this will bear fruit.

A few moments ago I mentioned my visit to India. This was a special experience for me in many ways. From the professional point of view, one thing that marked it out was the very close involvement of the European agri-food sector.

I was accompanied by a full European agri-food business delegation – which represented companies with a combined turnover of €54 billion, and which had close contact with Indian ministers.

With these business people there, it was much easier to target the issues that really mattered – in a country where potential exporters can quickly get tied up in red tape. This helped pave the way for future joint business opportunities.

Also, we had some fruitful discussions with India's Minister for Food Processing – especially about non-tariff barriers. He made positive remarks, and we will hold him to them.

More generally, as a result of the mission, we have a much clearer idea of which issues to focus on in our FTA negotiations with New Delhi – which will start three days from now.

I could also mention China.

This is another market in which, all too often, Member States have chosen to go it alone when taking on Chinese regulation. Nine times out of ten, they have found the going too tough. Now, in a number of sectors, European national capitals have agreed to present a common front.

As you know, in 2005, we launched an EU-Chinese Dialogue on Agriculture. The second high-level meeting under this dialogue will take place in July. There is a lot to discuss! China is not an easy market to break into. But we are now identifying our priorities more clearly. And we are finding some common ground with Beijing.

In particular, the Chinese administration is very interested in our approach to Geographical Indications. If the European Union and China could reach an agreement on advanced co-operation over GIs, opening the Chinese market to our GIs, this could be a big prize.

Ladies and gentlemen,

In India, China and many of our other potential markets around the world, we have a long road ahead of us. But that journey begins with a single step. It would be a large first step indeed if we could agree on principles similar to the ones I have set out today.

This conference is an important part of the process. I have my ideas. You have your ideas, and I want to hear them – because no new strategy will work without you.

In any case, let's agree on one thing. The days of thinking in terms of "Fortress Europe" are over. Yes, we can keep lines of "defence" against some agricultural imports. But we can't sit quietly behind those lines and hope that the world will leave us alone.

We have outgrown our fortress - just as, many centuries ago, villages all over Europe had to spread beyond the fortresses of wood or stone which formed their centre.

We must reach out beyond our walls and actively look for new pastures. This is how we will build on our impressive agri-food export base. This is how we will build on the sector's prosperity.

I know I can rely on your full support in our efforts to do this.

Thank you for listening, and I look forward to hearing your thoughts.

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