Now is the time to take a hard look at those European
Union (EU) governments promising to slash spending on subsidizing their
farm exports. It’s part of an attempt to persuade trade partners to
lower barriers in other industries at the World Trade Organization.
The move comes from European foreign ministers. With
little fanfare they back a EU plan calling for average reductions of 45
per cent in export subsidies, 36 per cent in import tariffs and more than
55 per cent to farmers.These figures were spelled out in an e-mailed
commission statement. EU commission spokeswoman Arancha Gonzalez adds that
her 15-nation bloc would cut all export subsidies and "phase out
completely subsidies for certain products, in particular products of
interest to developing countries."
Taken at face value the offer is seen as the answer to
most of Europe’s problems. On the other hand, at least 10 of the EU
members welcomed the move only after French Foreign Minister Dominique de
Villepin quickly persuaded the EU to remove a reference to eliminating
specific subsidies on sensitive commodities. Products include wheat, olive
oil and oilseeds.
While the U.K., Germany, Denmark, Sweden and the
Netherlands welcome the "broad thrust" of the reform package,
most of the 15 EU members oppose its main purpose: "to break the link
between subsidies and farm production." French farm minister Herve
Gaymard argues forcibly that this would lead to "considerable cuts in
production in certain regions."
Paralleling this, the EU commission contends it wishes
to write farmers a single cheque. This would end the link between what
they produce and lessen their dependence on aid such as export subsidies.
And Ireland farm minister Joseph Walsh complains the package as
"inequitable, unnecessary and not in accordance with EU objectives
and internally contradictory."
So what is the upshot? The EU’s pledge to cut
spending on subsidizing national food exports faces a major hurdle before
the WTO’s ministerial meeting in Cancun, Mexico, four months from now.
France, Ireland, Spain and Portugal are rigid, at least by North American
standards. Major exporters, whether Australia, Brazil, Canada or New
Zealand, accuse both the U.S. and the EU of inflating world prices by
subsidizing farm production.
Canada’s position is certainly delicate. Our
neighbour to the south now has a strong pro-farmer stand, enhanced by
recent President Bush decisions which gave his Republicans majorities in
both the Senate and Representatives. This measure is the opposite of
Ottawa’s position that enhances the urban standing in both houses.
Whatever happens here, there is little room for manoeuvring. But our
farm groups don’t seem to understand what’s at stake, unlike our urban
newspapers. The urban media seek cheap food bought with our cheap money,
but what’s our own position? And when do our political leaders publicly
set agriculture’s standards for non-urban Canada? Or do they just skate
in delicate circles, talking aimlessly and quacking in their usual
confusion?