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Trojan optimistic about new international trade agreement

Posted on: 10/30/2007

On October 23, 2007 former European Commission Ambassador to the international organizations in Geneva Dr. Carlo Trojan gave a talk entitled “EU-US trade relations, WTO and the Doha Round.” Director of the Mario Einaudi Center, Nic van de Walle, introduced Dr. Trojan as a speaker in the Center’s Foreign Policy Distinguished Speaker Series.

The “two biggest elephants” in international trade, the United States and the European Union, account for 2/5 of total world trade. How do these trade relations affect the WTO and the Doha Round? Dr. Carlo Trojan argued that the United States and the EU both bear a joint responsibility to work together in the multilateral arena. Without this cooperation, “nothing will fly in multilateral trade negotiations.”

Trojan pointed out that despite this fact recent years have seen developing countries become a force to counter the powerful EU-US partnership. Developing countries have become better organized and informed. Emerging powerhouses such as Brazil and India have become more assertive and exercised greater political clout than in previous years. Even China, who is not a formal member of the WTO, has become an increasing presence in negotiations. “Fear of China is one of the few issues which unite emerging/developing countries.” Another recent change has come from the increasing influence of NGO’s and civil society on the WTO.


The meetings in Cancun proved a crucial turning point, according to Trojan. While the US and EU were challenged to come up with a common position regarding agricultural policy, it was met with staunch resistance by developing countries. The ensuing backlash provided the impetus to create the G-20, in which the developing countries were successful in putting the development agenda upfront. Trojan discussed how the views on agriculture and how they relate to the EU-US relationship have changed from the Uruguay to Doha rounds of negotiation. “We (EU) have moved away from trade distorting subsidies decoupling some 90% of our support. Already in Doha the EU accepted the principle of phasing out with a view of elimination of all export subsidies and improved market access for all products.” At the same time, however, the United States adopted a farm bill in 2002 which “went exactly in the opposite direction reinstating a price support system.” The most recent 2007 Farm Bill presents little more than an extension of the price distortion policies.

Trojan also stated how this illustrates the difference in the approaches of the US and EU in regards to the actual implementation of multinational agreements of the WTO. In the United States, the TPA (Trade Promotion Authority), otherwise known as “fast track authority”, expired on July 1st 2007. This has given new life to protectionist elements in Congress, which have gain a greater hold on US negotiators.

Trojan concluded by discussing how the EU/US trade axis is slowly being replaced by trade between South America and China, which will soon account for half the world’s imports and exports in the next decade. He reiterated the need for negotiations. “It would be careless, at this juncture, to let all this slip through our fingers. Both the EU and the US bear a specific responsibility. This requires political leadership and courage. Both the US and the EU will have to carry their domestic constituency… I am optimistic that the Doha negotiations lead to a new agreement. A deal, however flawed it might be, still constituted a better response than no deal at all.”

Dr. Trojan’s talk was part of the Foreign Policy Initiative at Cornell led by the Einaudi Center and co-sponsored by the Institute for European Studies and the U.S. Delegation of the European Commission as part of the EU Speaker Series.

Contact Information
Heike Michelsen
Einaudi Center
255 8926
hm75@cornell.edu

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