Multilateral Negotiations, Preferential Trade Agreements and the CAP. What's Ahead?

The focus of the paper is on the developments so far and the future of the negotiations on agriculture in the WTO Doha Development Agenda round from the perspective of the European Union. The first part of the paper discusses what happened in the two parallel processes, the domestic agricultural policy reform in the EU and the WTO negotiations, identifying the linkages between CAP reform decisions and developments in the EU negotiation positions. The second part of the paper discusses further changes expected in the relatively near future in the CAP and in regional trade agreements involving the EU, and the perspectives of the WTO negotiations. The main point made is that the changes in domestic agricultural policy which have occurred in the EU (mostly motivated by domestic concerns), while they have not removed farm support nor made the CAP effective and efficient, have had a significant effect in terms of reducing its distortionary effects on markets, though more on the domestic than on the international ones. Unlike in the Uruguay round negotiations (when the MacSharry reform was decided close to the end of the round), the timing and extent of these reforms have made it possible for the EU to be a credible actor in the DDA round and put forward sensible negotiating proposals. The CAP is expected to go through further significant changes in the near future which, regardless of what happens in the WTO negotiations, will bring a further market reorientation of EU agriculture and a reduction in trade distortions. Successful developments in preferential trade agreements involving the EU for which negotiations are already well under way may contribute to a significant increase in the opening of EU agro-food markets.