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Research Report

EU Negotiating Room in Domestic Support after the 2003 CAP Reform and Enlargement

Copyright Date: May. 1, 2006
Pages: 40
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Table of Contents

  1. (pp. 5-5)

    The European Union (EU) is the world major user of domestic support to the agricultural sector and a fervent advocate of protectionist agricultural trade policies. But at the Doha round, the European common agricultural policy (CAP) is under fire and the EU is the target of all the criticisms. According to many WTO members, the offers made by the Europeans do not match the level of ambition of the Doha Development Agenda and the EU is often accused of blocking the negotiations because of its opposition to deep cuts in trade-distorting domestic support measures and tariffs. On the other hand,...

  2. (pp. 6-17)

    Just two years after the entry into force of Agenda 2000, the European Commission undertook a comprehensive Midterm Review of the CAP. What was supposed to be a routine exercise ended in a major agricultural reform adopted in September 2003 and complemented by several texts in 2004 and 2005, especially for the Mediterranean products and sugar.

    The main objectives of the 2003 reform are to convert the CAP into a more market oriented and less trade distorting instrument, but also to keep the budgetary costs stable and to ensure the safeguard of the rural economy and the environment.

    One of...

  3. (pp. 17-29)

    Our analysis is limited to the year 2013 because it corresponds to the last year of the EU financial framework set for the period 2007-2013 and it is also the first year of full application of the CAP to the NMS.

    Market price support

    To assess the level of market price support, the WTO methodology has been used. For each product, the external reference price for the period 1986-1988 adopted at the Uruguay round has been subtracted to the domestic intervention price and then multiplied by the estimated production for the respective years. The external reference price for each product...

  4. (pp. 29-30)

    In the last months of negotiations at the Doha round, several EU member states have expressed concerns on the fact that the offers put on the table by the EU Commissioner for Trade could exceed the negotiating mandate given to the European Commission. Based on the findings presented in this paper, we can conclude that the EU proposals fit the 2003 CAP reform package and, in the case of the blue box and of the overall trade-distorting support, the EU still has some room for manoeuvre to offer deeper cuts. It is interesting to note that the impact of EU...