Europe's trade hypocrisy: The West pays to keep the rest poor
 
Philip Bowring IHT
Tuesday, June 17, 2003
Europe's trade hypocrisy
 
GENEVA The Doha round of trade negotiations is rapidly approaching a crisis. The behavior of some European countries is proving so selfish and shortsighted that key developing countries may soon come to the conclusion that it would be better to walk away from the table than carry on with wrangling over secondary issues while progress on the crucial one of agriculture is sabotaged.
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Last week France and Germany cut a side deal that appears to rule out the fundamental reform of European agriculture, without which progress at the World Trade Organization is impossible. The deal aims to stop some subsidy cuts and perpetuate the absence of links between overproduction and the level of subsidies. In return for helping French farmers, Germany will get support on nonfarm issues dear to it.
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So much for President Jacques Chirac's oft-touted concern for the poor world. Having missed an opportunity as host of the Group of Eight summit meeting in Evian to lead Europe away from its annual agricultural subsidies of $50 billion - the biggest single contributor to Third World poverty - France is now stitching up the European Union's reform plans. In the process, the Europeans are throwing away gains in influence that they expected from the global unpopularity of U.S. policies of preemption and military intervention.
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The reform plans devised by the EU farm commissioner, Franz Fischler, did not go very far toward meeting the demands of the developing world that the free trade touted by the rich should apply to sugar and cotton as much as to cars and computers. But they would have given the EU trade commissioner, Pascal Lamy, something to work with in negotiations with the United States, whose farm lobby is second only to the EU as a global poverty generator.
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The deal is a sure way to sink prospects for the September ministerial meeting of world trade ministers in Cancun, Mexico, supposedly the half-way point of the Doha round. That meeting was in enough trouble already, as deadlines had been missed at the end of May for agreements by the Trade Negotiations Committee in Geneva on proposals to be put to the ministers in Cancun. If many issues are left hanging, the ministers will have scant time for the crucial ones that require ministerial input.
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To underscore African anger, President Blaise Compaore Burkina Faso went to the WTO in Geneva last week to plead the case of African cotton farmers. He noted that many African countries opened their markets and ended farm subsidies in response to advice and pressure from the World Bank and the International Monetary Fund. Now the poor but efficient farmers of Benin, Mali and Chad, as well as Burkina Faso, for whom cotton was a key crop, are being ruined by U.S. cotton subsidies.
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Cotton subsidies in rich countries are 60 percent higher than the gross domestic product of Burkina Faso, and total farm subsidies six times greater than development aid. And there will be no farm subsidy reform in the United States unless there is also reform in the EU.
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Burkina Faso does not need charity, President Compaore said. It just wants WTO members to live up to the organization's principles. His eloquent plea for free trade unfortunately received very much less publicity than President Chirac's hypocritical and condescending recent statements about help for Africa.
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Further evidence of the damage done by farm subsidies has also come from an unlikely place - a study published recently by the International Labor Organization. It found that globalization had not set in motion any "race to the bottom" by developing countries in terms of quality and income levels of industrial employment. Freer trade in manufactured goods had helped development. It was the producers of primary agricultural products who were the global losers, through their exclusion from free, unsubsidized trade.
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Western political leaders need to stop treating trade issues as boring technicalities and recognize how threats to the WTO system threaten their own prosperity. Failure to achieve farm trade reform is a greater threat to world harmony and prosperity than any single disease or weapon of mass destruction.

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