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July 16, 2008

Ethics and politics of EU subsidies clash

The European Union has "to live with" how its agricultural policies can cause hardship in poor countries, the man in charge of the bloc's development aid efforts has stated.

Although the EU made a commitment in 2001 to phase out all subsidies aimed at helping its farmers sell their food abroad, the Union's 27 governments agreed in December last year to grant refunds for pig meat exports because of difficulties encountered by that sector.

The decision has been blamed by anti-poverty activists for damaging the livelihoods of farmers in some African countries because it allowed European food to be sold at prices with which locals could not compete. In Cameroon, for example, the price of frozen European pig meat stood at 1 euro (1.60 dollars) per kilo following the decision, some 1.70 euro cheaper than pig meat produced within the country.

Speaking to members of the European Parliament (MEPs) Jul. 14, Louis Michel, the European commissioner for development and humanitarian aid, said that the EU's critics are correct "ethically and intellectually" to point out that its farm subsidies conflict with its stated desire to alleviate global poverty. "But politically perhaps you are not right," he added.

"I agree this is a contradiction," he said. "Sometimes we have to live with this kind of contradiction. We are always trying to balance the interests of our farmers with the interests of the developing world."

Before taking up his five-year term as commissioner in 2004, Michel stated that greater "coherence" must be achieved between the EU's development aid activities and policies in other areas such as trade, agriculture and fisheries that can have an adverse impact on the poor.

"In a reasonable timeframe, we should be able to put an end to some of these inconsistencies," he said this week. But, he added, "There are limits to what we can do. There are limits to what is feasible in political terms."

Michel was outlining a proposal -- to be formally tabled by the European Commission later this month -- to provide 1 billion euros to aid farmers in poor countries. The plan is a response to the rapid rise in the cost of basic foodstuffs, that has had serious consequences in over 40 nations, in some cases triggering riots.

During the debate, Michel also vigorously defended the free trade deals -- known in Brussels parlance as Economic Partnership Agreements -- that the EU has been negotiating with almost 80 countries in Africa, the Caribbean and the Pacific (ACP). He argued that the accords are "not an untrammelled market instrument" but are designed to help lift ACP states out of poverty.

Others addressing the Parliament denounced the EPAs, however.

Talla Fall, a Senegalese diplomat, argued that the accords are designed to push African governments into opening up their economies to European goods. He rejected claims by the European Commission (the executive arm of the EU) that Africa will benefit from the accords because they will allow its exporters unrestricted access to the European market for nearly all products.

"The whole thing is based on outright liberalisation," he said. "There is nothing but liberalisation in these EPAs. You are talking about a false symmetry when it is said that Africans can export without limit. People forget that countries in Africa cannot export that much, whereas people in Europe do have an industrial structure."

Senegal has been one of the most vociferous opponents of the EPAs. While 35 ACP countries had accepted EPAs by the end-of-2007 deadline set by the Commission, Senegal refused to sign.

Fall contended that Europe is hurting African attempts to deepen integration on a regional and continent-wide basis. Senegal had been negotiating in a team alongside its neighbours in West Africa. Yet when it became clear that it and Nigeria were fiercely critical of the proposed accords, the Commission decided to go ahead and negotiate individual deals with Ghana and Cote d'Ivoire.

This apparent willingness to drive a wedge between neighbours smacked of 'Balkanisation', according to Fall. He likened the effects of the Commission's tactics to the fragmentation that occurred in south-eastern Europe during the 20th century.

"African states had been divided up as had been done in colonial times," Fall said. "If that's not rampant Balkanisation, it certainly looks like it."

Mamadou Cissokho, president of ROPPA, a network of African farmers, suggested that the swift economic liberalisation being sought by the Commission conflicted with the EU's own experience of building itself into a complex political and trade bloc over several decades.

"I don't think you can say to people (in Africa) that in 15 years you will be rich," he said. "You set up the European Union 50 years ago and you still say there are problems."

Mareike Meyn, a research officer with the Overseas Development Institute in London, said that the "Commission is not interested in dialogue" about the EPAs, suggesting that it has not released "any information" to her think tank about the 35 accords reached in late 2007.

Meyn stated, too, that the poorest African countries have not been offered "more generous deals" than the somewhat wealthier countries belonging to the Caribbean Forum (Cariforum). "Indeed, it appears that the Cariforum -- the countries which negotiated the best- have the best deal," she said.

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