The EU is the world’s biggest importer and exporter of agricultural products and promotes open trade for sustainable economic growth. Europe imports mostly basic agricultural commodities, but its exports are based on high quality farm products and other processed agricultural products.
The EU believes that further liberalisation of trade for agricultural products are an important contribution to sustainable economic growth for both exporting and importing countries. The EU is also the world’s biggest importer of agricultural goods from the developing world. Recognising the crucial role that agriculture plays in many developing countries, the EU has granted extensive market access to agricultural imports from developing countries and with the initiative, ‘Everything but Arms’, full duty free quota free access to products from the world’s poorest countries. Countries from Africa, the Caribbean and Pacific regions that have signed Economic Partnership Agreements also benefit from free access of their agricultural products to the EU.
However, trade policy for agriculture should also reflect the wider role of farming in European societies and the need to maintain high quality standards, as well as the environmental and health standards that are required by European consumers. Furthermore, the EU has a diverse rural landscape that has been deeply shaped by farming and forestry, and by the crafts and industries associated with such activities. The EU’s common agricultural policy (CAP) has been developed in recognition of these special characteristics.
The reform of the Common Agricultural Policy (CAP)
The early CAP reflected the need to maintain and increase food production in Europe after the Second World War. In recent years, environmental objectives, landscape preservation, the viability of rural economies and their cultural heritage, food quality and animal health and welfare standards have all become important rationales for the support of our farming sector.
Budgetary questions, along with the recognition of the changing role and further market orientation of European agriculture also helped prompt a deep re-evaluation of farm supports in the EU. The 2003 CAP reform(and the subsequent sectoral reforms) fundamentally restructured the CAP, decoupling almost all payments to farmers from production and prices, so that they no longer encourage overproduction or distort trade. The so-called “Health Check” of the CAP, launched in 2007 and completed in 2008 continues the reform process, contributing to a more competitive and market-oriented European agriculture.
These reforms are also the basis for the EU’s negotiating position in the Doha Round of WTO world trade negotiations. The EU is offering to make the 2003 reform irreversible by binding it into WTO rules, under the condition that others, in particular major trading powers, commit to evenly contribute to this Round.