What have the world trade talks got to do with Lisbon?

Wed, May 28, 2008, 01:00

The proposed world trade agreement is not linked to the Lisbon Treaty but could yet bring it down in the referendum, Jamie Smyth, European Correspondent explains why

EU TRADE commissioner Peter Mandelson must be cursing his luck. Three years of tough negotiations aimed at agreeing a global trade deal are coming to a head at the same time as Ireland prepares to vote on the Lisbon Treaty - the only country in Europe to do so.

Timing is everything in politics and Irish farmers' opposition to a global trade deal that would cut tariffs on beef imported to the EU from the likes of Brazil is threatening to bring out this highly organised and vocal group to vote against the Lisbon Treaty.

The farmers' opposition to the cuts proposed by Mr Mandelson is prompting real fears in Brussels that the WTO deal is becoming a new "Bolkestein directive".

This was the draft EU law to liberalise services that was used successfully by No campaigners in France to help torpedo the EU constitution in a referendum in 2005.

The Bolkestein directive had very little to do with the EU Constitution but was an effective rallying cry for voters concerned about their future prosperity. Similarly, a WTO agreement is not linked to Lisbon but could yet bring it down in a referendum.

Libertas and Sinn Féin initially argued that ratifying the treaty would remove EU states' veto over trade deals. Libertas has since clarified its position, saying Lisbon "drastically reduces the number of exceptions or grounds on which a member state can veto an international trade agreement like the WTO Doha round". (The world trade talks were launched in Doha, Qatar, in 2002.)

But an analysis of the Lisbon Treaty suggests the potential to veto a WTO agreement should remain. Trade deals on goods concluded under the existing EU treaties are already subject to qualified majority voting at the Council of Ministers (which means no one state can veto the deal). But unanimity is still required when certain sectors that fall outside the exclusive competence of the EU such as transport services and policing and judicial questions surrounding intellectual property rights are included.

This will not change under Lisbon, says the European Commission. It has said that an Irish veto over a comprehensive WTO agreement would remain because the EU works on the "Pastis Principle" - whereby an entire deal can be vetoed if any single part of it can be vetoed.

The Irish Farmers' Association (IFA) now acknowledges that Lisbon does not change Ireland's ability to veto a deal but it is pushing the Government to use its veto even before any final deal can be put on the table.

The Government has so far wisely demurred, with Minister for Foreign Affairs Micheál Martin arguing wisely that this would amount to "bad negotiating tactics". In practice, member states - particularly smaller states - rarely employ a veto at the Council of Ministers over any issue, never mind an international trade deal that would affect the rest of Europe. "Individual countries like Ireland would face huge pressure from the rest not to pull the plug. It's not in the interests of any country to veto this early," said one EU diplomat.

Instead the Government is aligning itself with other farming states such as France, Lithuania and Poland to pressurise the commission not to organise and attend a WTO ministerial meeting next month, which it has been anxious to hold to clinch a deal, and not to sign up to a bad deal.

Whether this strategy is robust enough to convince farmers to turn out and vote for the Lisbon Treaty is another matter entirely.

IFA president Pádraig Walshe said yesterday that Mandelson's handling of the WTO negotiations is undermining the Lisbon Treaty and turning farmers against the EU. Martin has also strongly criticised the commission's eagerness to hold a ministerial meeting next month. Aware of the damage that the issue is causing to the Government's referendum campaign, he told EU ministers this week that the meeting should be delayed for at least six months.

This tough criticism is not helping Mandelson, who is struggling to resurrect WTO talks that have already been written off as dead by many observers.

The European Commission has previously been sensitive to Irish concerns and delayed sensitive proposals, notably a plan to harmonise the EU's corporate tax base until after the June 12th referendum. But the multilateral nature of the WTO means that delaying the Doha round of trade talks talks is simply not possible. Diplomats in Geneva and Brussels insist that political realities in the US mean it is a question of "now or never" for Doha.