This seventh Trade Policy Review of the European Communities (EC) has been conducted in a friendly and comprehensive manner, and our dialogue has been very constructive. We have greatly benefited from the engagement of the EC delegation, led by Mr. Pierre Defraigne, Deputy Director General DG Trade, the very insightful comments by our discussant, Ambassador Don Stephenson, and the active involvement of a large number of Members.

Members commended the EC on its continued efforts towards a liberal trade regime and on its monetary discipline. These efforts have contributed to a further decline in its already low inflation and to external current account surplus in the last few years. Members welcomed the ongoing recovery of the EC's economy following a slowdown since 2001; they hoped that the recovery would be sustained, given the positive impact this might have on unemployment and fiscal deficits within the EC, and on the global economy in general. Members welcomed the EC's strong commitment to, and active participation in, the multilateral trading system, including its strong leadership in striking a deal on the July Package. They expressed appreciation for its substantial contribution to the WTO's Global Trust Fund for technical cooperation, and for its non-reciprocal preferences to developing countries under its GSP scheme and Cotonou Agreement, and to LDCs under the Everything But Arms initiative. Nevertheless, several members expressed concerns on its planned reforms of the GSP scheme and hoped that it would be objective and consistent with the WTO rules and principles. Members also noted that the EC's MFN trade regime applied to only nine WTO Members because of its active involvement in various preferential trade arrangements.

Members commended the EC on its liberal trade regime for non-agricultural products. Some Members shared the EC's non-trade justification for its Common Agricultural Policy (CAP). However, other Members noted that, despite the ongoing reform of the CAP, mainly through the decoupling of payments from production, agriculture remained protected by high tariff rates, a complex tariff structure, and by high levels of domestic support and export subsidies. Arguing that such protection undermined economic efficiency and penalized both EC tax payers and consumers, they urged the EC to further liberalize its CAP. Several members also asked the EC to provide information on its specific agricultural policy, including the reforms of sugar and banana regimes.

Members noted the new opportunities provided by the enlargement of the EC. Concerns were expressed about the EC’s consistency with and commitments to the WTO rules and disciplines as a result of its enlargement to 25 members, in particular the need to provide adequate information and compensation to Members. Various Members raised concerns about the continued active use of contingency trade remedies by the EC, and expressed fears that this might increase with the elimination of textiles and clothing quotas at the end of this year. Concerns were also expressed about the lack of harmonization within the EC in areas such as internal tax rates, and certain services. The EC's technical barriers to trade and SPS measures, including the new REACH system for chemicals, were deemed stringent and burdensome. Members sought further clarification on the EC's common fisheries policy; the scheme for the GMOs and biotechnology products; customs procedures; rules of origin; tariff quota administration; government procurement; state aid and subsidies programmes; protection of intellectual property rights, including geographical indications; business regulation and competition policy; and on specific activities, including energy, steel, financial services, telecommunications, and transport.

Members appreciated the responses provided by the EC delegation, and looked forward to receiving written answers on any outstanding questions.

In closing, I would like to thank the EC delegation on its oral and written response provided during the meeting. This Review has offered the opportunity for a much better and updated understanding of the EC's policies and practices, and for a collective appreciation of the challenges it faces and its efforts to address them in a WTO consistent way. The wide interest shown by Members, with many advance written questions, interventions and high attendance, reflects the vital importance of the EC to the multilateral trading system. It appears that the main areas where many Members would like to have the EC’s positive and expeditious response are the WTO issues related to its enlargement and the implementation of its agricultural and technical regulations reforms. This would strengthen both its support for the multilateral system and its widely recognized actions in favour of developing countries, mainly those with a key interest in agriculture.