How Might the EU's Common Agricultural Policy Affect Trade and Development After 2013?

Abstract

The Commission?s Communication on the CAP post 2013 published in November 2010 sets out three options for the future shape of Europe?s Common Agricultural Policy. This paper explains the background and rationale for the debate on CAP reform at the present time. It describes the content of the preferred reform option and examines the implications for trade and for developing countries. Despite fears raised by the rhetoric of maintaining the EU?s production capacity to guarantee food security, the proposals maintain the market orientation of previous CAP reforms. Virtually all the proposed changes concern measures which are classified in the Green Box in the EU?s reporting of its WTO commitment obligations. Green Box measures must meet the criterion, inter alia, that they are not or only minimally trade-distorting. The absence of detail in the current Communication does not permit to quantify whether the proposed measures would be more or less trade-distorting than at present, but there are good reasons to think that they would be less tradedistorting. However, the overall impact cannot be assessed until the parallel negotiations on the EU?s medium-term budget perspective are completed and the budget expenditure on the different instruments in the proposed agricultural policy toolkit are known.