I thank the committee for those challenging questions. I hope I can do justice to some or all of them.
On the US farm Bill — committee members may be aware of this — what we are picking up is the distinction between the Administration and Congress. The Administration speaks in very upbeat terms about the need for change and major reform. When the Minister met the US Secretary of Agriculture, Mr. Johannes, he said privately that he regretted that the United States had not acted in the same manner as the European Union years ago in reforming and reducing the levels of support and protection. The view of Congress is that it will not yield an inch.
The reason I referred at some length to the political process was that the elections would have a bearing on the situation. The impression has been created that the Democrats are more anti-globalisation and anti-liberalisation than the Republicans and that if they secure a majority in either House, or both, it will be much more difficult for the Administration, as there will be more resistance to efforts to reform in the United States. That is as much as we can say. Normally the US does not reform in the radical manner of the European Union.
There is a debate in the European Union on insurance for farmers. I listened to this last week and a French colleague, of all people, said we should begin to move towards the US system of assisting farmers to take out insurance for crop failure, bad weather, etc. In the United States assistance is given for insurance and market support, but those concerned do not rely on the insurance. The United States has a long history of providing support for farmers and we do not envisage radical change.
A couple of points arise on the European Union's approach to the negotiations, all of which we tend to agree with. The Commission has offered too many concessions and our Minister spends all her time trying to keep a tight rein on Commissioner Mandelson. It is a difficult process and it will continue to be such. We have the support of a number of member states in our efforts. If it were not for the efforts of the Minister, the French Minister and others, Commissioner Mandelson might have done a lot more damage. This is no great consolation and we will continue in our efforts to restrain him.
I take the point that if the current suspension continues, the various offers that have been made will be forgotten and fade into the dim and distant past. During Commissioner Fischer Boel's visit in the past fortnight, she insisted, for what it was worth, that the EU starting position in negotiations is as it was this time last year. In other words, the talks have failed and we are to start almost on a blank page. Anything that happened in the past six months has been forgotten about. I do not believe the aforesaid is realistic but that is our position. We support her fully in that regard.
On the non-trade concerns, we face an uphill battle. Commissioner Mandelson has responsibility for trade and many of the areas where non-trade concerns arise fall within the category of food safety, which is the responsibility of Commissioner Kyprianou. He is in Brazil at present to check out circumstances for himself. This indicates the concern of the Commission and I hope it will not ignore the reality. If it finds that Brazil is producing to an unacceptable standard, it will take the appropriate action. The campaign in this regard is ongoing.
It was stated the Commission should "go it alone". However, we are well advanced in terms of CAP reform and we need to receive credit for our stance in the WTO talks. The Commissioner for Agriculture decided the best way to approach the current round of WTO talks was to impress upon the negotiating partners our commitment and sincerity. I will not say whether I believe this is wrong or right.
One could argue that the MacSharry reforms were forced upon the European Union by virtue of negotiations at the time in question. Mr. Fischler wanted to address this by reforming first and then negotiating rather than being forced into adopting a certain position. This is exactly what should happen in the United States. It should agree first and then reform. One could say we put the cart before the horse but we must now defend this position. Our efforts are devoted to ensuring we receive credit and to avoid paying twice at all costs. The question of energy derived from ethanol has not been an issue in the negotiations so far but it will be one because of the circumstances described by the Senator.
In the absence of a WTO agreement, the question of bilateral deals with China, other Asian countries and Mercosur arises. This is of serious concern to us because I have heard a Commission spokesperson say that the WTO was the most efficient and effective method for multilateral negotiations, and that it provides balance in world trade on a general level. The difficulty with bilateral agreements is that one tends to concede more. When there were negotiations with Mercosur, the countries in question were demanding much more of the European Union than they were demanding of parties in the WTO talks. In the WTO, one must pay more. One does reach trade agreements and trade liberalisation but one tends to pay more, and we are therefore very nervous of bilateral trade agreements.
The WTO has well-established co-ordination mechanisms, the most effective of which involves the co-ordination committee comprising the Department of Enterprise, Trade and Employment, the Department of Agriculture and Food and the Department of Foreign Affairs. The development interest is key in this regard. The committee meets in advance of practically every session. The trade issues are discussed on a weekly basis in Brussels at meetings of the Article 133 committee. It meets when any WTO or trade issue arises. There is general acceptance that our position on agriculture dominates the committee's agenda.
An economic analysis carried out last year showed that some benefits will accrue to the Irish economy from the WTO round, but that the potential benefits in respect of trade and industrial products, for instance, would be more than outweighed by the potential damage to agriculture. There are global benefits but the experience of most countries with a significant agriculture sector is such that these benefits are outweighed by the damage to that sector. This applies to Ireland.
Special and differential treatment represents a major issue, if only because of the existence of the G20. The last serious WTO negotiating session in Cancún failed because it did not meet the demands of developing countries. They now have a strong voice, which they are beginning to exercise, whereas in the past WTO agreements were made between the European Union and the United States and then handed down to the membership. This is no longer the case. The developing countries have a very serious impact and there will be a major development element to the next agreement.
In the defence of the EU, I must point to the Everything But Arms agreement and various others. Where special and differential treatment is concerned, the Union has made very significant offers in respect of the next round and has managed to embarrass the United States' delegates in Hong Kong, who refused to accept the equivalent of the Everything But Arms initiative. Exceptional cases were made in respect of textiles and other factors and we felt at the time they were embarrassing. Ireland and the Union in general are very committed.
The aforementioned position applies to the anti-dumping measures. The Union cannot be accused of dumping in the sense that it does not dump beef on any region. We export very little beef and, where we do pay export refunds, they are justified on foot of food security and other measures in the recipient countries.
I hope we have not been outmanoeuvred or outfoxed. Commissioner Mandelson's own defence is that traditionally the European Union is in the doghouse and pilloried around the world for failure in Cancún and other places to achieve an outcome. On this occasion the US is on the receiving end and Commissioner Mandelson claims credit for that, saying careful, strategic negotiating has allowed him to keep the moral high ground and the European Union in a safe position while putting the pressure on others. That is his version, but we are more inclined to agree with the views expressed around the table that he has conceded too much and we are trying to restrain him.
On the cost issue, we agree. The Minister is campaigning for simplification of the procedures and to reduce further the bureaucratic burden on farmers. On Monday, in the special committee on agriculture, we discussed the difficulty with the unannounced inspections. A large number of member states agree that demands on farmers for inspections, controls and penalties are still excessive and should be reduced. Thankfully we are not the only member state campaigning on that front; there are others.
Labelling is a solution to a WTO agreement problem that the Minister raised with Commissioner Fischer Boel recently and she was receptive to it. If we cannot prevent imports and must concede something on tariffs, the least that can be done for European producers and consumers is to ensure that imported products are labelled so that if there is a choice between Brazilian and Irish beef, the consumer knows exactly what he is getting. It is the least that can be expected and what we are campaigning for with the Commissioner.
I covered the point on the risks to the economy. There is a benefit to the economy but in the Irish case, it would not apply across the board; it would be outweighed by potential damage to agriculture. In the post-Mandelson era perhaps we are better to hang on. There is no doubt that no deal is better than a bad deal.
Food security was an objective of the Common Agricultural Policy when it was established 50 years ago. It is still valid and when the constitution was being negotiated, the CAP, with the objective of food security, was ratified again. Unfortunately that does not translate into reality and if we open our markets in a WTO context, the likelihood is that European production will suffer. If Brazil floods the European market with beef, European beef will suffer. That leaves us exposed in terms of food security because if there is a problem with foot and mouth disease in Brazil, or some other catastrophe, or it decides to sell to a higher bidder, European Union food security is under threat.
It is also a valid worry in terms of energy. When the Minister was in the US, she picked up the signal clearly that both America and the EU have been developing policies and negotiating against the background of a food surplus. That surplus would evaporate overnight if there were a conversion of food production into energy. If WTO maize, which no one wants to consume, is developed purely for energy production and wheat production falls, that is a dangerous road to go down. That is not sufficiently recognised worldwide but it is being recognised in the European Union. The energy market could develop to the point that food security is threatened.
