European Union Must Reduce Ag Tariffs, NPPC Says

Council says the EU protects its pork producers through quotas, high tariffs and health restrictions on imports.

Published on: Dec 19, 2005

The National Pork Producers Council criticized the European Union’s stand on agriculture tariffs and subsidies as "untenable" and "holding hostage" the World Trade Organization negotiations that took place in Hong Kong last week.

NPPC international trade counsel Nick Giordano, who was in Hong Kong for the trade talks, urged the EU to reduce its agriculture duties, particularly on pork. The EU protects its pork producers through quotas, high tariffs and a web of non-science-based health restrictions on imports. "The EU is trying to divert attention to cotton and other issues," says Giordano, "but the reality is that its untenable proposal on agriculture is holding hostage the entire Doha process."

Despite an overwhelming consensus in the WTO that barriers to farm trade must be drastically reduced, the EU is willing to make only minor adjustments to the high-import duties that protect its farmers. Those duties impede farmers in other countries from exporting to one of the most lucrative markets in the world. In October, the U.S. pledged to reduce its agricultural subsidies by 60%."

Economists estimate that cutting global barriers to trade by one-third would boost the world economy by more than $600 billion and lift more than 500 million people in the developing world out of chronic poverty.

Giordano notes that U.S. pork producers do not receive farm subsidies, so their survival increasingly is tied to their ability to export. U.S. pork exports have exploded in recent years thanks to various trade agreements – 2004 exports totaled more than 1 million metric tons with a value of $2.2 billion. So, there is enormous potential for increased demand for U.S. pork if trade talks are successful in achieving major cuts in import duties. (The average import duty for pork among WTO countries is 77%; the average U.S. import duty on pork is only 1%.)

"Great potential exists for both developed and developing country exports of pork and other agriculture products if an aggressive package of agriculture reforms is adopted," Giordano says.

 

WTO members did not reach a substantial agreement on market access in last week's ministerial meetings. They've set a new deadline--April 30, 2006--to have "full modalities in agriculture and non-agricultural market access.