- The Washington Times - Sunday, July 6, 2003

After heady escalation, the dispute between America and Europe over agricultural policies appears to be de-escalating. An eventual resolution of outstanding differences now appears to be a possibility. Still, U.S. and European Union farm subsidies continue to be a source of contention in global trade talks, as poor countries decry their impact on their domestic agricultural sectors. President Bush should keep these concerns in mind as he tours Africa in the coming days.

The EU parliament last week announced an end to its de facto ban on genetically modified food, which primarily affected U.S. farmers. Europe also recently announced its reformed (but still flawed) agricultural policy. Europe’s decision to drop its genetically modified food ban was anticipated, but may have been hastened by the Bush administration’s decision to challenge it before the World Trade Organization. The administration’s defense of the American farmer therefore appears to have paid off.

The United States, allied with developing countries, had also pushed Europe to alter its farm-subsidy scheme. Europe’s farm commissioner, Franz Fischler, had outlined a worthwhile blueprint for a new subsidy plan that would keep the farm budget unchanged but would eliminate direct links between increased production and subsidy payments, which cause gluts in the market and depress global food prices — thereby causing severe problems for farmers in poor countries that don’t benefit from subsidies. At the insistence of France and other countries, Mr. Fischler’s proposal was watered down, and Europe will continue, in many cases, to tie payments to farmers to their production — to the dismay of the developing world.

But the United States can’t be absolved of responsibility in this global food fight. As The Washington Times reported in an article published Thursday (“U.S. farm policy sows ire in Africa”), America’s own subsidies also cause problems for many farmers around the world. Although Europe creates the largest market distortions with its $50 billion a year in farm subsidies, America’s subsidies are also sizeable, at about $20 billion a year. “These subsidies are wrong, and they interfere with international trade,” Ugandan President Yoweri Museveni told the U.S. Chamber of Commerce in May 2002. “Let’s get rid of these subsidies and forget about aid,” he said, adding that fewer distortions in global agricultural trade would create jobs and help end the “shame of African countries begging endlessly.”



The Bush administration has done a good job of defending the interests of U.S. farmers. But Mr. Bush must also consider the impact that U.S. policies have on poor countries, as he witnesses Africa’s struggles firsthand. Momentum is gathering in Europe to decrease trade distortions and protectionism. Although America’s agricultural policies aren’t as harmful as Europe’s, reform remains sorely needed in this country as well.

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