The trouble with US farms -- is not Europe
As a British minister I believe I can claim to be both strongly pro-American and pro-Europe. As an agriculture minister responsible for negotiations on European agricultural policy, I am very involved in seeing that Europe has security of food supplies, and has a good relationship with its major allies.Skip to next paragraph
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My pro-American viewpoints go back over the years. I can claim to be one of the few British politicians who attended every presidential convention, both Republican and Democratic, from 1952 to 1968: Only ministerial office has prevented me from attending such functions since.
It is against that background that I deplore the talk of an ''agriculture trade war'' between the United States and the European Community. With the world suffering from deep recession, and with the Soviet bloc presenting a formidable agricultural and economic danger, nothing could be more absurd than for the two major economic groupings in the Western world to involve themselves in a damaging war.
On my recent visit to Washington I heard suggestions that a trade war would not cost the US anything, that the Europeans would not retaliate, and that they would be forced to moderate their farm support policy and so help to solve the current problems of the American farmer. None of these arguments stands up.
First take the cost. A series of deals involving the unloading of US stocks is bound to push down world market prices. This would be costly, not only for the US and Europe but for other important exporters of farm products such as Australia and New Zealand. And very likely it would hit developing countries struggling to increase food production from their own resources. It cannot make sense to weaken these countries' economies.
Anyone who thinks the European Community would not retaliate would be utterly mistaken. A campaign of aggressive export subsidization by the US would generate overwhelming pressure for counteraction. Nor could the US be confident that this action would be confined to competing in overseas markets.
So much has been said recently about the community's farm exports that there is a danger of forgetting that Europe is the world's biggest importer of food. In 1981 the European Community bought $9 billion to $10 billion of US farm exports, or 20 percent of the total, making it America's largest single customer.
The US administration should be in no doubt that these exports are vulnerable. The big items are corn, oilseeds, rice, and tobacco. The community could increase its own output of all these products, and those in the community who dislike dependence on the US would be only too glad to see it do so.
It is true that the European Community has increased its agricultural exports over the past decade. But it is also true that the great explosion in exports has come from the US. In the 1950s the US actually had a net deficit in trade in farm products. Now it has an enormous favorable balance, helping it to meet a large deficit resulting from the explosion of the oil prices.
Over the last few years other countries, such as Brazil, have entered export markets in a big way and have created difficulties for both the community and the US.
The British government does not seek to defend every aspect of European farm support policy. There are features of it that I would like to see changed. As British minister of agriculture for the last four years, I have fought hard for moderate policies on support prices, aimed at holding down surplus production. I have pressed for new or expanded schemes to encourage the uptake of surpluses within the community and I will continue to do so.
But however much the US may dislike the community's farm policy, no one can rationally argue that it is the main cause of the problems facing US agriculture. Other factors have been far more important. The strong dollar has meant a big drop in receipts from exports, and has tended to make US prices uncompetitive. Some traditional US customers have been especially hit by the world recession and by credit problems. And when the US embargoed extra sales to the USSR after the invasion of Afghanistan, other countries stepped in to take over as much of the Russian market as they could and have stayed there ever since. These countries did not, incidentally, include the European Community: We supported US actions for so long as the embargo lasted.
A trade war will not induce the community to change its farm policies in the direction the US would like to see. Rather the reverse. It would strengthen the hand of those who want to be still more protectionist and who are demanding still more finance for farm support.
I can sympathize with the feeling that, in agriculture, the US takes on excessive burdens - that it assumes too much of the responsibility for balancing world supply and demand, either through stockpiling or through taking land temporarily out of production as it is doing this year. But the only way of putting this right is through negotiating a better sharing of responsibility - not just with the European Community but with other major exporting countries as well. Negotiating with the community - 10 governments who sometimes argue fiercely among themselves - is not always easy. But a way has got to be found.
I explained to members of the US administration, senators, congressmen, farm leaders, and others that what we needed was a detailed examination, commodity by commodity, with a view to obtaining a Western strategy for the world food market - a strategy that would not weaken either the US or Europe. Failure to achieve that would only bring rejoicing in Moscow.
A ''trade war'' is plainly absurd. The only real gainers would be the Russians. As huge and opportunist buyers on the world market, they would pay less for their imports. And they would love to see yet another dispute, on top of those over steel and the pipeline, likely to weaken the cohesion of the Western alliance. We simply must avoid that outcome. The British government will do all it can. Surely our friends and allies in the US will do the same.