US embassy cable - 05PARIS7935

UNCLAS SECTION 01 OF 02 PARIS 007935 
 
SIPDIS 
 
BRUSSELS PASS USEU FOR AGMINCOUNSELOR 
STATE FOR OES; EUR/ERA; 
STATE PASS USTR FOR MURPHY; 
USDA/OS/JOHANNS AND PENN; 
USDA/FAS FOR OA/TERPSTRA/ROBERTS; 
ITP/SHEIKH/HENKE/MACKE/TOM POMEROY/MIKE 
WOOLSEY/GREG YOUNG; 
FAA/SEBRANEK/BLEGGI; 
EU POSTS PASS TO AGRICULTURE AND ECON 
GENEVA FOR USTR, ALSO AGRICULTURE 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, FR, WTRO, EUN 
SUBJECT: Unofficial translation of article from Le 
Figaro dated November 18, 2005 : "Why development 
should be the priority of WTO" by Christine 
Lagarde, French Junior Minister for Trade 
 
1. Trade Minister Christine Lagarde has signed two 
recent op-ed pieces on the WTO round. The latest, 
published on November 21 in the Financial Times 
entitled "Big Cuts in Farm Tariffs are No Solution 
to Poverty" warns against "blindly slashing" 
agricultural tariffs, and proposes focusing on the 
value in maintaining the European 
"multifunctional" model of a farm, balancing rural 
development, food security and environmental 
protection. The previous op-ed article, focused on 
the importance of development goals in the WTO 
negotiations, was published on November 18 in the 
right-of-center daily Le Figaro. Available only in 
French, it has been translated unofficially by 
Embassy Paris and is provided below : 
 
2. "Early December, the World Trade Organization 
(WTO) ministerial conference will start in Hong 
Kong. This conference is a deciding stage in the 
success of the Doha round for "development" 
launched in 2001. For France, the stake of these 
negotiations is simple. It is to control 
globalization and to favor the integration of poor 
countries into the world economy so that these 
negotiations result in the development of these 
countries. Two conditions are necessary. 
 
First the local environment should be favorable. 
The quality of facilities, regulations, and 
political governance are essential factors. The 
challenge of the French cooperation and assistance 
policy is to assist these countries in creating 
good conditions for development. Trade 
negotiations should really take into consideration 
the expectations of developing countries. An 
uncontrolled liberalization would not benefit poor 
countries, which would be in a stranglehold 
between the increase of global agricultural prices 
and the progressive decrease of trade benefits 
granted by developed countries. On the eve of the 
Hong Kong Conference, I note that negotiations 
have brought no clear answers to the questions of 
poor countries. 
 
To put development back into the heart of the 
round, I have identified three priorities. 
 
First, all developed countries should open their 
markets to products from developing countries and 
especially from the poorest of them. The European 
Union, the first import market in the world, 
already made many efforts to welcome exports from 
developing countries and is ready to make more. 
With its trade preferences, the most generous in 
the world, it imports more agricultural products 
from poor countries than the United States, Japan, 
Australia, Canada and New Zealand together. The 
European Union absorbs three quarters of the 
exports from sub-Saharan Africa. This opening 
should also be as wide as possible, otherwise a 
few large developing countries (Brazil, India) or 
developed countries will benefit from European 
concessions. These pitfalls are clearly identified 
by the most recent studies, especially by the 
World Bank and by OECD. We may also look at our 
historical experience. One tends to forget that 
the majority of rich countries developed 
themselves in the 19th century by opening 
progressively after protecting their domestic 
market. 
 
Then, developing countries should commit 
themselves to reform their agricultural policy. 
Once again, the European Union is in the avant- 
garde : since 1992, it is the only trade area to 
have implemented a reduction of its production and 
agricultural subsidies. The last reform, decided 
in 2003, will significantly reduce subsidies. 
Unfortunately, this action was not followed by 
similar commitments from others. During the 
revision of their Farm Bill, the United States, 
has doubled their agricultural subsidies, 
increasing the average support to 17,000 euros per 
farmer, which is almost 50% more than in Europe. 
An end should also be put to subsidies, especially 
American, for cotton producers which jeopardize 
the economy of African countries specializing in 
this production for which they are very 
competitive. This is of vital importance for a 
country like Benin, where cotton represents 75% of 
exports. 
 
Third priority, world trade rules should be 
adapted in order to favor the development of 
countries that are excluded from it. More 
favorable customs rules should be granted to less 
developed countries. Developing and developed 
countries should also accept that trade rules be 
adapted to the wealth of developing countries. 
What is more legitimate than to offer Ghana, for 
instance, (GDP/capita : 260 euros) better 
conditions than those offered to Brazil 
(GNP/capita : 2,660 euros) ? 
 
The question of the access of poor countries to 
generic drugs is also a priority and should 
mobilize developed and developing countries. In 
sub-Saharan Africa, 2 million persons died from 
AIDS in 2005. WTO negotiations are an opportunity 
to set up a legal framework allowing poorest 
countries to import generic drugs are a moderate 
price. 
 
It is urgent to meet these objectives : the Hong 
Kong conference takes place in a month. France and 
Europe, fully aware of these challenges and of 
this emergency, have put on the table bold 
proposals to make this round that of development." 
Stapleton