FRENCH EU PRESIDENCY: AGRICULTURAL POLICY GOALS

UNCLAS SECTION 01 OF 02 PARIS 001085

SIPDIS

BRUSSELS PASS USEU FOR AGMINCOUNSELOR
STATE PASS USTR FOR MURPHY;
USDA/OS/SCHAFER/CONNER;
USDA/FAS FOR OA/YOST/JACKSON/ROSADO;
OCRA/CURTIS/ALEXANDER;
ONA/RIEMENSCHNEIDER/YOUNG;
OFSO/LEE/YOUNG;
EU POSTS PASS TO AGRICULTURE AND ECON
GENEVA FOR USTR, ALSO AGRICULTURE

E.O. 12958: N/A
TAGS: EAGR ETRD PGOV WTRO EUN FR INR

SUBJECT: FRENCH EU PRESIDENCY: AGRICULTURAL POLICY GOALS


1. Summary: France hopes to have the CAP health check reforms
passed during its EU presidency and will initiate discussions on a
post 2013 CAP policy and budget. The GOF's three main objectives
will be to maintain EU food sovereignty; maintain the economic and
territorial health of EU agriculture; and, include societal
preferences in farm policy. These are to be achieved in the context
of a principle of "European Preference" based on quality standards
rather than consumer choice, with implicit preferential treatment of
EU products, or at least products produced by EU production methods
and standards. France understands fully that this approach is not
consistent with the current rules based trading system and its
reliance on SPS, health and safety regulations and market outcomes.
However, the GOF believes that a system of European quality
standards is essential to protecting the traditions and preferences
of European producers and consumers from homogeneous low-cost agro
industry. France also calculates that this posture enjoys broad and
deep support among the EU's citizens across national boundaries. End
summary.

French EU-Presidency and the CAP Reform


2. France will hold the rotating Presidency of the European Union
from July 1st to December 31, 2008 which coincides with the European
Union's review of the 2003 Common Agricultural Policy (CAP).
Slovenia will initiate the discussions in the coming weeks on EU
Commission (EC) proposals for the review announced on May 22. French
Ag Minister Barnier has been actively lobbying other EU Agriculture
Ministers to keep a "strong and comprehensive" EU farm policy
despite growing criticism of high farm payments during this period
of elevated food prices.


3. France hopes to have reforms successfully adopted by the
European Council before the end of December 2008. Further delay
would mean the reforms would require European Parliamentary approval
under the Lisbon treaty expected to be applicable beginning January
1, 2009. This co-decision process would further postpone reform as
the European parliament's legislative session will end in the spring
pending elections in June 2009.


4. France supports the Commission's proposals for sanitary and
climatic risk management policies, such as private/public funds for
industry losses following animal health or natural disasters.
Minister Barnier praised the Commission proposals allowing Member
States to maintain "coupled" support for some endangered sectors on
a case by case basis and to fund quality and environmental programs.
While France had hoped for inclusion of crop and revenue insurance
programs it questioned the WTO compatibility of co-financing
insurance premiums as suggested by the Commission.


5. France remains cautious about dismantling the milk quota system
fearing that it may destabilize the EU milk market and endanger milk
sector production in mountainous and fragile areas. France opposes
full decoupling of arable crop payments, including minor crops.
This issue, together with the proposed elimination of intervention,
will likely be the most difficult to settle during the French
Presidency. France believes it has the support of a majority of EU
member states, especially new Member States such as Hungary and
Romania.

CAP Reform beyond 2013


6. In February 2008 President Sarkozy announced that France hopes
that the main objectives of the future CAP could be defined during
its presidency so that the tools, policies and funding could be
discussed by the EU Commission and the EU Parliament during
2010-2012 for application in 2013.


7. France has three major objectives for the future CAP: 1) maintain
EU food sovereignty and independence; 2) maintain the economic and
territorial health of EU agriculture, and; 3) include the collective
(i.e. social and environmental) choices of the EU consumers in farm
policy.


8. In order to achieve these goals, France is relying on the
European Preference (EP) principle (i.e. the principle that EU
products should receive preferential treatment compared to imported

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goods, or at least, not be put at a disadvantage). This includes
both tariffs and non-tariff measures. While EC Ag Commissioner
Fischer-Boel cautioned that this French overture could be
protectionist, French policymakers believe that the EP principle
would provide for more "fair" trade.


9. The French see restrictive border measures as necessary to
compensate for the reduced competitiveness of EU farm goods due to
internal policies and norms, which are acknowledged to be "societal
choices" rather than sanitary protection (e.g. higher environmental,
animal welfare and social standards). Stricter non-tariff measures
would subject imported goods to the same EU requirements as domestic
producers. Should the EP be implemented, France and the EU would
arguably justify trade restrictive measures on the basis of societal
concerns, irrespective of scientific evidence. Moreover, the French
believe that government should identify and act upon these societal
concerns rather than leaving food trade open to global market
forces.


10. While the French clearly intend to adopt food standards taking
into account factors beyond health and safety, officials have not
provided specific commodity applications or defined how societal
concerns would be taken into account.


11. Nevertheless, France has already signaled its intention to
place significant weight upon societal acceptance (versus scientific
evaluation) in considering approval for Genetically-Engineered (GE)
products and is now seeking to export this decision-making process
to the EU level. The link between the idea of adopting standards
based on "societal preference" rather than a rules-based trading
system is apparent as well in the current French opposition to
Pathogen Reduction Treatments (PRTs) for poultry. The French
proffer that they can reject production methods which don't meet
European ideals of food quality and diversity; that "quality" is
more important to Europeans than just low prices. One could
hypothesize that in the future the EU could ban the importation of
eggs produced by hens in small cages if such cages are banned in the
EU for animal welfare reasons.


12. While French policy makers acknowledge that any new measures
should be within the WTO framework, they believe that Article 20 of
the SPS agreement allows environmental (and maybe societal) elements
to justify non-tariff barriers. France believes that at least 10
member states support its position, and others are likely to approve
a French proposal. Ideally, France would like to have societal
concerns also included in the WTO framework so that restrictive EU
import policies become WTO compatible. French representations at the
WTO and other international organizations are likely to push for
legitimization of non-traditional concerns in the determination of
market access.

STAPLETON