Geneva, April 7 - The European Union should liberalise services further and open up its agriculture market to achieve a robust recovery and sustained growth, the World Trade Organisation (WTO) said on Monday.
As the world's biggest exporter and second biggest importer, accounting for 17 percent of world trade in goods, the European Union has a key role in helping trade shorten and reverse the current global slowdown, the WTO said in a trade policy review.
The WTO said the 27-member bloc should liberalise services like telecommunications and banking internally and with trading partners.
Services account for 70 percent of the EU economy in terms of employment and gross value-added, a measure of output.
In the report prepared on March 2, it called on the EU to cut its high farm tariffs and production and export subsidies.
"Such reforms would also contribute to the improvement of the EC's resource allocation and advance the full establishment of its internal market," the WTO said in a statement, using the abbreviation for European Communities, the name under which the EU joined the WTO.
The EU's average tariff for countries with most favoured nation (MFN) status has fallen to 6.7 percent from 6.9 percent in 2006. In practice developing countries enjoy more favourable preferential rates or even duty-free access.
Actual tariffs range from zero to an equivalent of 604.3 percent on isoglucose, a starch-based sweetener. Farm products are protected by a complex tariff structure under which duties on a number of items are more than 100 percent, by tariff quotas, health and safety measures and by export subsidies.
Health and safety measures and technical standards were one area of concern singled out in the review discussion for criticism by other countries including China.
"Here we clearly have a difference in approach," said Peter Balas, the European Commission's deputy director-general for trade.
"Many of our partners consider these as trade barriers," he told a news conference after the first day of the review.
DAIRY EXPORTS
Other areas criticised by WTO members were high farm tariffs and subsidies, especially the subsidies on dairy exports reintroduced in January.
Balas said the EU remained committed to the abolition of export subsidies, including those for dairy produce, by 2013.
Brussels had been unhappy to reintroduce the dairy supports, but increased production by trading partners as consumption worldwide fell in the crisis had forced its hand, he said.
Even manufacturing still requires substantial state aid, and trade measures are geared to protecting industries processing agricultural materials, the WTO said.
Thus industries processing inputs produced in the EU often enjoy export subsidies because they are uncompetitive, partly because of their high tariff protection.
For industries producing inputs from outside the EU, such as coffee and chocolate, there is high "tariff escalation", in which the raw materials come in at low rates but the processed goods have high tariffs, making it harder for raw materials producers to compete higher up the value chain.
A parallel report by the EU to the WTO said the bloc had undertaken several reforms in recent years to modernise agricultural policy, reinforcing its market orientation and making EU agriculture more competitive.
It noted that the EU is the world's biggest importer of agricultural goods as well as one if its biggest exporters.