Aldo Longo, Director International affairs"

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EU agricultural dimension in a changing
international trade environment

• Aldo Longo, Director International affairs"
• DG Agriculture and rural development
• Bruxelles 16/11/2007

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Introduction

• EC past performance and current situation
• Looking ahead 3 variables for strengthening our
  international position
• Conclusions

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Past performance current situationThe EU in
the world
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• 2002 2006
• Positive trade developments
• Exports 11.3 b ,
• EU trade deficit from 9 b to 3.6b
• 2006
• exports 15, imports 5
• EU became the 1st world exporter importer

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Euro VS Dollar (2002 2006)
strengthened by 36 in relation to the

• negative impact on exports of EU products
  competing with
• products from
• countries whose currencies are pegged with the
• / increased EU imports from those countries

Had the exchange rate been more stable, the EU
trade balance would probably have reached a
surplus by 2006
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EU27 exports in bio annual growth (2001
2006)
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EU 27 Exports in bio (2006) and growth
2001-2003 / 2004-2006
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EU exports to the world (2006)
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2 The EC position in a changing international
trade environment

• The 3 variablesothers.

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(No Transcript)
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I. CAP reformaims

• Farmers free to produce what the market wants
• Severing the link between subsidies and
  production will make EU farmers more competitive
  market oriented, while providing the necessary
  income stability
• Increased competitiveness by price cuts in
  agricultural commodities growth of
  home-market outlets and increased competitiveness
  in the world

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CAP reform

• Higher degree of market orientation through
  decoupling
• EU production in some sectors expected to grow in
  the medium term (e.g. wheat)
• pig meat poultry production largely unaffected
  by reform some decline in beef sheep prod.
• lower prices in milk production shift from
  butter or skimmed milk powder towards production
  of cheese and higher value-added dairy products

Impact Studies forecast
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II. WTO

• One important EC objective in DDA negotiations is
• Substantial improvements in market access for EU
  products abroad and for non-EU products in the EU
  market
• The framework agreement lays down the guiding
  principles in the market access objective,
  recognises the right to designate reduced number
  of sensitive tariff lines as to assure that some
  less competitive products can be shield from
  cheap imports.
• A DDA agreement impact
• increase of supply of raw materials in the EU
• domestic production will also face stronger
  competition from imports

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III. Free Trade Agreements (FTAs)
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FTAs.

• Many of those regions have
• complementary production patterns with the EU
• big increasing populations
• rising incomes
• increasing urbanisation change of dietary
  habits towards European products

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FTAs.
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3. Conclusions
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• Good past performance
• Increasing imports and decreasing trade deficit
• The future of the EU in the world based on 3
  policy instruments
• More market orientation (CAP) Increased
  production lower prices in some sectors
• Decrease of production in some sectors (CAP) is
  compensated by increased access to raw materials
  from abroad (WTO, FTAs)
• Access to huge markets for our products (FTAs)
  

CAP reform WTO FTAs
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• Our objectives for the future
• Maintain and improve the link between raw
  materials and food products
• Address market inefficiencies distortions
• To offer new export possibilities
• A sustainable prosperous agriculture
  sustainable and prosperous food industry