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Farm subsidies grow in the EU as debate over the future of CAP heats up
New subsidy figures reported to the WTO show a sharp increase in the EU’s agricultural subsidies, to over €90 billion in the 2006-07 marketing year - levels not seen since the previous decade. However, the most trade-distorting payments, classed as ‘amber box’ at the WTO, are at a historical low, with the EU reporting only €26.6 billion under this category. Amber box payments have been falling steadily as a result of the most recent reforms to the EU’s Common Agricultural Policy (CAP). The sharpest decline in the latest figures is in the less trade distorting ‘blue box’ category of production-limiting payments, which have dropped to €5.7 billion from €13.4 billion in the 2005-06 marketing year, and from €27.2 billion the year before that. However, the drop in blue box support has been more than compensated for by an increase in ‘green box’ payments, which are meant to have no, or at most minimal, effects on trade or production. The new numbers arrive at a time when debate over the future of agricultural subsidies is set to intensify, as work gets underway on the EU’s 2014-20 budget. The highly-politicized debate over CAP reform is expected to become more complicated now that the Lisbon Treaty provides the European Parliament with equal say in the EU’s agricultural policies, together with the European Commission and the Council of Ministers.
Sources: “Total EU Farm Subsidies Grow Despite Drop in Production-Linked Payments”, Bridges Weekly Trade Digest, Volume 14, No. 5, 10 February 2010; “A Field to Level”, Joshua Chaffin, the Financial Times, 10 February 2010.
EU to withdraw Sri Lanka’s GSP+ trade benefits over human rights concerns
The EU announced on 15 February that it would withdraw Sri Lanka’s trade preferences unless human rights concerns are addressed within six months. Sri Lanka benefits from the so-called GSP+, an incentive arrangement that grants preferential trade benefits to economically vulnerable developing countries that have ratified and implemented 27 international conventions in areas such as human rights, labour and good governance. Following a year-long investigation, the EU says it discovered “shortcomings” in Sri Lanka’s implementation of three human rights conventions: the International Covenant on Civil and Political Rights, the Convention against Torture and the Convention on Rights of the Child. In 2008, EU imports from Sri Lanka under GSP+ totalled €1.24 billion; textiles and fisheries products are key exports beneting from the trade preferences. EU Trade Commissioner Karel De Gucht said in a prepared statment: “I would like to emphasise that I hope Sri Lanka will sit with us over the next six months in order to agree upon a set of measures that will result in rapid, demonstrable and sustainable progress in relation to the human rights shortcomings we have identified.” [1]
Seventh African Investment Forum Meets in Ghana
On 8-10 February business and government leaders from Africa, Europe, North America and Asia convened for the African Investment Forum to discuss how to improve capital flows in and to Africa. In the opening speech at the Accra International Conference Centre, Ghanaian President John Evans Atta Mills called for African leaders to remove bottlenecks and barriers to trade between African countries as a means to foster job creation and eradicate poverty. Themed “Accelerating Intra Africa Trade and Investment”, the forum focused on investment opportunities in Africa, including energy, agriculture, infrastructure, oil and gas and manufacturing. Strong emphasis was also placed on public-private sector collaboration in fighting corruption to improve the investment climate in African countries and also on the importance of economic growth. The Namibian President, Hifikepunye Pohamba, said that African political independence was meaningless if not accompanied by economic freedom, and called for business leaders to actively engage in debates to help overcome the economic challenges of Africa.
World Bank Institute launches World Trade Indicators 2009-10
The World Bank Institute, a part of the World Bank focusing on learning activities, has updated its trade policy database for the second time since it was launched June 2008. The database features 500 variables of trade policy and outcomes, which are structured in five pillars - Trade Policy, External Environment, Institutional Environment, Trade Facilitation and Trade Outcomes. The WTI also provides a web-based interactive benchmarking and ranking tool designed to navigate the database and facilitate comparison across countries, default country groupings and user-defined groupings; country briefs that cover trade impacts of and policy responses to the food crisis and the global recession; and an overview publication on recent trade trends. These can be found on the WTI website at: http://www.worldbank.org/wti
[1] EU temporarily withdraws GSP+ trade benefits from Sri Lanka, European Commission, 15 February 2009, http://trade.ec.europa.eu/doclib/press/index.cfm?id=515
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