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An old rant of mine – more to follow…

This afternoon (Sunday 06 February, 2005) I watched the ‘Politics Programme’ on BBC1.  Peter Mandelson, Britain’s European Commissioner, was being interviewed.  He was asked when the EU would fulfil its commitment to remove agricultural subsidies.

These subsidies encourage EU farmers to produce more than is needed and then allows this excess onto the world market.  Being so heavily subsidised it is sold at a price far below what it cost to produce.  So cheap, in fact, that even the poorest countries cannot compete.  Not only can they not sell their own produce, but they find themselves either forced by binding agreements (World Trade Organisation), or economic necessity, to buy this foreign produce in favour of that produced locally.  Naturally, this means that their own farmers get poorer and that what little money they have seeps abroad.

As mentioned above, the EU has promised to completely remove these unfair subsidies.  What hasn’t been stated is exactly when this will happen.  Asked ‘when’ the subsidies would be removed, Peter Mandelson said that negotiations were complex, but ongoing.  He also made it clear that the EU would not act until and unless the USA made the same sacrificial gesture.  The experienced interviewer allowed him to get away with this!

Thus, EU politicians are spared from having to make these politically dangerous cuts until the USA agrees to also.  Until such time, these same EU politicians can claim to be in earnest whilst blaming the USA for the lack of progress.  The EU politicians know very well that the USA will not make such cuts and will, at the most, join in negotiations (to be held in Doha this year) only to drag them out and dilute them.  A year or so later the USA will simply ditch the agreement altogether thus undermining what little progress might have been made (their usual modus operandi N.B. Kyoto Climate Change Treaty and all the international treaties against the development of WMD).

EU politicians are happy with this because they fear the ire of European farmers whose produce would become less competitive globally as it will be competing against subsidised goods from the USA and goods that are naturally cheaper from the ‘Third World’.  The corollary being that EU farmers might lose income and/or go out of business.  Going it alone and becoming uncompetitive would risk either inflation, as people are forced to pay more for their food, or a flood of cheaper subsidised food from the USA and Third World.  The EU could defend itself from cheap imports by placing trade barriers such as import tariffs, but the USA would be irate at such moves and retaliate in kind – the EU does not want a trade war with the USA.

For these reasons the Doha talks will come to nothing, the EU will not act and the poorest countries will continue to be exploited by the richest.  The lack of political will to do the ‘right’ thing stems from the economic vulnerability of Europe when compared to the USA and the conflict of interest between the weak few who want Fair Trade and the powerful few who want to protect their wealth.  Only a well-led, informed and educated populace would submit to the short-term pain whilst understanding the long-term necessity of such policies.  Only a united EU has the strength to face the power of the USA .

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