Bruxelles, Belgium
July 24, 2003

An independent study prepared by the French institute of research INRA (Institut National de la Recherche Agronomique) for the European Commission shows the EU is one of the worlds most open market to imports of farm products from third countries and especially from developing countries. Taking into account trade preferences given to developing countries, the average customs duty actually applied by the EU to farm imports is 10.5 %, a figure three times lower than frequently mentioned data. As a result of this low level of protection, the EU is by far the world's number one importer of agricultural products, and the main importer of farm products from developing countries as well as from Least Developed countries.

EU Farm Commissioner Franz Fischler said: “These results show clearly why the EU is the most
open market in the world for agricultural products from the developing countries. It makes a mockery
of the criticisms regularly advanced by other developed countries none of whom import anything like
the volume or value of our imports from developing countries - that the EU is protectionist in its farm
policy. We will continue to work in the aptly named Doha Development Round negotiations to
encourage others to offer equivalent access to the developing countries.”

EU Trade Commissioner Pascal Lamy added: “This study demonstrates that when the EU talks
about incorporating development into trade policy, we mean what we say and we do what we say. Our
whole regime is geared to facilitating exports from developing countries, as these figures show ».

About 60% of agricultural imports into the EU come from developing countries, against 40% only in the case of the three other countries of the Quad (US, Canada, Japan).

The EU is often criticized for the high level of its agricultural protection and the lost profit that it allegedly entails for developing countries. The figure of a 30% average level of customs duties is regularly advanced in this respect

A study presented to the European Commission today by the INRA shows that this 30% figure, contained in a study of the American Department of Agriculture, is deceptive for at least two reasons: it is based on misleading estimates of certain customs duties and it takes no account of the trade preferences that the EU grants to developing countries. The new study out today study shows that the average customs duty actually paid by exporters entering the EU market is 10.5 %.

This opening results logically in a high import level from the developing countries.

The EU is indeed by far the first world importer of agricultural products from the developing countries:
EU imports are once and half times higher than those of the United States, twice as high as those of
Japan and ten times higher than those of Canada. About 60% of agricultural imports into the EU thus
come from developing countries, against 40% only in the case of the USA, Canada and Japan.

The divergence is even clearer for the least developed countries (LDCs): even before the effects of the
EU's Everything But Arms (EBA) scheme granting LDCs quota free and duty free access to its market are fully felt, EU imports from these countries were twice higher than those of the United States, Japan and Canada put together. LDCs make 3.2% of EU agricultural imports, against 0.7% only of those of Japan, the Usa and Canada.

The table below shows that EU is the first importer of agricultural products also from Africa and
Latin America.

Comparison of agricultural imports from the countries of the Quad (2001)

in Mds€ World Developing countries Latin America Africa The least developed countries EU 69.8 43,5 19,6 10,6 2.3 The United States 61.6 29,7 18,1 0,9 0.5 Japan 52.8 21,7 3,6 0,8 0.4 Canada 14.7 2,9 1,6 0,1 0.0

Source: UN - Comtrade.

Background

Almost half the EU customs duties on agricultural products are expressed in "€ by kilo" and not in "%" as it is the case for the manufactured goods. This is a current practice for agricultural products (as everyone can experience on the market or at the butcher's, where prices are always expressed in this way). But this requires conversions in % to calculate average duties for all products. If conversions are not made properly (for example if they are based on unrepresentative average prices), they can result in an under or over-evaluation of tariff protection. This is precisely a shortcoming of the study of the American Department of Agriculture. By calculating prices for very broad groups of products, the latter artificially creates "tariff peaks" in the trade regime of the EU. When this calculation is carried out correctly, the average customs duty protection of the EU for agricultural products appears to be 20 %, i.e. 10 points less than the often quoted figure of 30%.

However this figure is related to duties applied by the EU according to the "normal" arrangement in the WTO ("most favoured nation treatment"), which only covers in practice agricultural imports from some industrialised countries.

For developing countries, which constitute the vast majority of EU imports, the real conditions of access to the EU market are much more favourable.

In accordance with the provisions of the WTO for the "special and differential treatment", the trade regime granted by the EU to developing countries includes a very large number of "trade preferences", which reduce considerably its average customs duty protection. The EU grants the most ambitious preferences to developing countries among large industrialized countries - as indicated by a study from the World Bank(1)-.

Since the "Everything but Arms" initiative, the forty-nine poorest countries of the planet (the "least developed countries - LDCs") benefit from access to the European market for all agricultural and industrial products without customs duty nor quota. This includes products as sensitive as beef, milk products, fruits and vegetable (only for rice, banana and sugar free access will be phased in over a transitional period; full liberalisation will in any event take place from 2009 onwards). It is a measure of far reaching impact, whereas on other developed country markets, developing country products are often heavily taxed. For example, the amount of customs duties collected in the United States on imports from Bangladesh is higher than the amount of duty collected on total French imports!

The European initiative has already resulted in about € 6 million trade creation on products so far not exported by these countries or in quantities limited by existing quotas. Sudan for example benefited from these provisions to develop its molasses exports (+€ 3 million) and Senegal, those of molasses and of tomatoes (+€ 1.2 million).

Facilities of this type are not limited to the poorest countries: 142 developing countries benefit, in one way or in another, from preferential treatment regarding EU market access in relation to the normal regime of industrialized countries. For example, more of the nine tenths of imports from the countries located in Africa, in the Antilles or in the Pacific enter a preferential rate on the European market.

Incorporating these preferences explicitly into calculation, the average customs duty in agriculture actually applied to the European market is 10.5 %.

For a copy of the study go to:
http://europa.eu.int/comm/trade/issues/sectoral/agri_fish/legis/pr240703_en.htm 
http://europa.eu.int/comm/trade/issues/sectoral/agri_fish/legis/pr240703_fr.htm 

For more information on EU trade in agricultural products go to:
http://europa.eu.int/comm/trade/issues/sectoral/agri_fish/index_en.htm 

(1)Olarreaga M. & F. Ng (2002), "Tariff peaks and preferences", in Development, Trade, and the WTO: A Handbook, World Bank.