TBR complaint against US subsidies: the EOA has been heard, but European oilseeds remain unprotected

Berlin, December 3rd , 2003

Even though the Commission recognized that the TBR Complaint lodged by the EOA was justified, the Commission nevertheless did not consider that the current market situation permits the launching of legal proceedings at this time. European oilseed and protein crop producers regret this and still lacking protection, they are asking more than ever for a safety net.

On January 10, 2003, the EOA (the European Oilseed Alliance) lodged a complaint before the Commission within the framework of the so-called "Trade Barriers Regulation" procedure for the purpose of ending competitive distortions resulting from US farm policies. The complaint focuses mainly on marketing loans and counter-cyclical payments, a US system of support applied in particular to soybeans and other oilseeds. The Commission recognizes that the complaint was justified from a legal standpoint (serious prejudice on the basis of negative impacts on European oilseed prices) and from an economic standpoint with respect to assessing the economic damage (more than a 10 % negative impact on the price of European oilseeds).

The Commission presents its findings Nevertheless, the Commission considers that the current market situation does not permit the launching of further legal proceedings at this time, because the price recovery since 2002 has temporarily suspended the payment of these subsidies. However, the Commission has kept the procedure open because of the counter-cyclical nature of these subsidies and is leaving open the possibility of further action if there is a change in market trends.

European producers remain unprotected The EOA regrets that the Commission did not see fit, at this time, to formally address the issue of the marketing loans and counter-cyclical payments. By recognizing the negative impacts on prices that occurred during the four years (1998 to 2002) during which marketing loan subsidies to US oilseeds represented annual amount of $2.5 to $3.5 billion, the Commission should have been enabled to undertake a clearly offensive action. Meanwhile European oilseed and protein crop producers remain without protection against future injuries caused by marketing loans and counter-cyclical payments, in a context where the deficit in vegetable proteins in the European Union is rising. The issue of the implementation of a safety net for European oilseed and protein crop producers therefore becomes all the more critical.