- The Washington Times - Wednesday, May 15, 2002

Couldn't President Bush have had the decency to sign the farm bill over the weekend or in the dead of night? At least that would have been a sign of his personal embarrassment over this monstrous $190 billion piece of legislation. But, no. Mr. Bush was out there, surrounded by approving senators, predominantly Democrats. Even Mr. Bush's nemesis, Judicial Committee Chairman Patrick Leahy of Vermont, he of the extravagant milk subsidies, was right there applauding. Does that mean Mr. Bush feels really good about what he did?

Following on the heels of the heavily protectionist steel bill, the farm legislation contains more than generous subsidies for the bread basket states, which also happen to be swing states in the mid-term election. Ignoring the fact that the vast majority of subsidies (90 percent) go to the production of just a few crops, such as corn, soybeans, rice and wheat, Mr. Bush brazenly asserted that "It will promote farmer independence, and preserve the farm way of life for generations. It helps America's farmers, and therefore, it helps Americans." Considering that the largest 10 percent of the farms get 75 percent of the subsidies and that families on farms today account for just 2 percent of the U.S. population, the figures hardly support Mr. Bush's noble words.

It is probably realistic to expect as the nation approaches the hotly contested November elections, which we go into with the most evenly divided Congress since 1954, that more of the same can be expected. That does not change the fact that protectionism and government subsidies make for really bad policy. There is also the rather significant fact that both the steel and farm bills go directly counter to Mr. Bush's often-stated principles on free trade. It is particularly disappointing given that his predecessor, Bill Clinton, sold out the free-trade agenda to labor and environmental interests at the famous Seattle World Trade Organization summit in 1999. A lot of people had expected leadership on trade and on fiscal responsibility from Mr. Bush.

"It's not a perfect bill," Mr. Bush somewhat sheepishly commented. "I know that. But you know, no bill ever is." Much of the coverage of the farm bill has focused on the costs to the American taxpayer and on the president's abandonment of the Republican-sponsored Freedom to Farm bill of 1996, which sought to cut farmers' reliance on government subsidies.

What has not received much coverage in the media here is the negative effect these concessions to domestic interest groups have for U.S. international trade relations. Franz Fischler, the European Union's commissioner for agriculture, rural development and fisheries, was absolutely indignant when the farm bill passed the House and Senate last week. "This risks calling into question the reform promises of Doha," he said, referring to the WTO meeting in November, held in the capital of Qatar, when the Bush administration did yeoman work to help start the next round of trade negotiations, which it is now endangering. "At a time when all developed countries have accepted the direction of farm support away from trade and production distorting measures, the U.S. is doing an about turn and heading in the opposite direction."

According to experts at the European Commission, it is likely that the farm bill will breach the WTO's set U.S. ceilings on production-distorting expenditures, triggering punitive measures. It could also distort production worldwide, and it certainly does not set a brilliant example for developing countries. "This legislation marks a blow for the credibility of U.S. policy in the WTO," Mr. Fischler said, "where the U.S. has presented a trade-oriented agenda wholly inconsistent with the new bill. We cannot negotiate on the basis of 'do as I say, not do as I do.' "

Now, Americans won't be too pleased about being lectured by Europeans on farm policy, and it is certainly true that for decades the farm subsidies of the European Union's Common Agricultural Policy (CAP) produced monstrous market distortions, mountains of butter and lakes of milk. Margaret Thatcher was among its most ardent critics. It is also the case, however, that the EU has been working to reduce the CAP subsidies, partly in anticipation of integrating new member states with large agricultural sectors, such as Poland.

The Europeans are not alone in their criticism, though. Developing countries have also understandably registered concern. On Monday, President Yoweri Museveni of Uganda, speaking at the U.S. Chamber of Commerce in Washington, charged that government subsidies of farmers in rich countries contradict the Bush administration's own policy of "trade, not aid," by shutting out the products of poorer nations. "These subsidies are wrong and they interfere with international trade," Mr. Museveni said. That just about sums it up.


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