President George W. Bush echoed his nemesis, President Jacques Chirac of France, last week when he called on ??all developed nations, including our partners in Europe,?? to ??immediately eliminate subsidies on agricultural exports to developing countries so that they can produce more food to export?? and ??feed their own people.?? Chirac had offered an equally hollow proposal on Feb. 22 when he urged rich countries to temporarily stop subsidizing agricultural exports to poor African countries.
If both leaders were serious, their convergence on this important issue at the Group of Eight summit meeting starting Sunday in Evian, France, could not only spur improved cooperation between the United States and Europe but also lead to a new lease on life for the world?s poorest. According to the World Bank, rich countries? agricultural subsidies cost the developing world $350 billion each year, dwarfing the $50 billion in assistance the developed world provides annually to all poor countries.
The problem is that neither leader means what he says. Contrary to their rhetoric in support of global free trade, the United States and Europe have long subsidized domestic agricultural products. This practice has led each to accuse the other of unfair trade practices, exacerbating trans-Atlantic tension and bringing the Doha round of global trade talks to a virtual halt.
For decades, France has used export subsidies to appease powerful farmers. Chirac also recently cut a side deal with Germany to slow reform of the European Union?s harmful Common Agricultural Policy. Bush championed and signed the politically expedient but economically foolish U.S. farm bill before the 2002 mid-term elections. This legislation, favored by farm state Republicans and Democrats, increased federal subsidies by more than 80 percent. These subsidies are not aid to family farmers. They are mainly corporate welfare for agribusiness. Three quarters of the funds—at least $82 billion over 10 years—will go to only 10 percent of American producers, primarily the largest commercial farmers.
Bush is using a technicality to hammer European perfidy and obscure his own. Bush called for the elimination of export subsidies, a popular and damaging European device much in need of revision, but failed to mention American production subsidies and price supports, which encourage U.S. farmers to overproduce and dump excess supply on the world market.
If he were serious, Bush could lead the world in what he called a ??great mission of rescue?? to save Africa from disease, hunger and poverty. To prove U.S. bona fides, the president could immediately make a down payment on the U.S. proposal already on the Doha negotiating table by pressing Congress to reduce unilaterally America?s agricultural subsidies. This would give momentum to the elimination of global agricultural subsidies in the World Trade Organization, signal the eventual end of federal subsidies to agribusiness and potentially spur development of a viable plan to help America?s farm families.
Then, if he must, Bush could wag his finger at the Europeans from the moral high ground and perhaps shame them into cutting their export subsidies before the end of the Doha round. Or better yet, Bush could acknowledge Chirac?s earlier call for action and, as he promised during his 2000 election campaign, lead humbly and by example.
But Bush is unlikely to do this. All signs indicate that he is stuck in war mode with the Europeans and won?t pay the political price of forcing U.S. agribusiness to compete on its own merits.
The G-8 summit meeting is an opportunity for wealthy nations to show that their rhetoric is matched by genuine will to advance human freedom and hope. In recent years, the Group of Eight has demonstrated that it can, given political will and cooperation, deliver to the world?s poor. The debt relief initiative forged by the G-8 in 1999 has allowed the world?s poorest countries to invest $40 billion from debt service savings in health and education. An end to agricultural subsidies could deliver even more.
Unfortunately, Bush seems to prefer blasting Europe rather than championing effective multilateral action, even when it could achieve results of major importance to millions. His victim will not be Chirac, who no doubt will respond in kind, with vitriol and bluster. Those who will suffer most are the men and women of the developing world whose lives are much too important to be used as fodder in the trans-Atlantic food fight.
For the first time, a major economy is saying: We will be better off doing things by ourselves, and making our own decisions. And that's a bit of a shock to the system.