Memo to Poor Countries: Stand Fast - New York TimesNovember 11, 2005

Memo to Poor Countries: Stand Fast - New York TimesNovember 11, 2005
Editorial
Memo to Poor Countries: Stand Fast

Brazil's foreign minister, Celso Amorim, put it bluntly after the collapse of the latest round of trade talks in London and Geneva this week: unless the European Union finally stops dithering and cuts farm subsidies to help farmers in poor countries, the negotiations to open up trade in manufactured goods and services - to help big companies in Europe and America - would take "not one month, two months, one year or two years." The talks, he said, "just won't move."

For Mr. Amorim, and the other negotiators from developing countries that have been run over by the rich world in trade talks for the past 50 years, this page has two words: Stand fast. Do not give a single additional concession until the European Union cuts its farm subsidies. It's better to let the talks collapse and send the big guns home empty-handed than to be fooled again by Europe's hypocritical blather about free trade when clearly its countries, led by France, believe in free trade only when it suits their narrow interests.

For the last half-century, the World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, have aggressively dismantled barriers against trade in industrial goods and services, areas in which rich countries in Europe, along with the United States and Japan, hold a comparative advantage. But when it comes to areas where poor countries could flourish, like textiles and agriculture, it has been a different story.

The developed world funnels nearly $1 billion a day in subsidies to its farmers; that encourages overproduction, which drives down prices. Poor nations' farmers cannot compete with subsidized products. Four years ago, in Doha, Qatar, poor countries finally won a promise that Europe, Japan and America would slash agricultural subsidies, in addition to further liberalizing world trade in services and manufactured goods.

The United States has stepped up to the plate. Last month, the United States trade representative, Robert Portman, made a substantial offer: the United States will slash allowable farm subsidies by 60 percent if Europe and Japan cut their subsidies by 83 percent. There's a difference in the numbers because European countries and Japan have higher subsidies.

Europe has refused, with the French, as usual, leading the way and swearing to block any final agreement that goes beyond Europe's anemic offer of a handful of lame cuts. Then the European Union's trade commissioner, Peter Mandelson, actually had the gall to ask poor countries to make further cuts in industrial tariffs and services.

If the European Union is truly going to refuse to make right a half-century of trade-distorting subsidies, which have helped the rich at the expense of the poor, then there's an easy answer: the talks should just not move.