America and Europe Won’t Give Up Agricultural Subsdies
June 21st, 2007
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The global trade talks have collapsed once again because Europe and America have refused to give up agricultural subsidies.
Kamal Nath, the Indian trade minister, said the United States had offered to cap its domestic agricultural subsidies at $17 billion, considerably lower than the $22 billion it had offered before, but still well above the roughly $11 billion that American farmers are currently receiving. Nath said that offer had “no logic or equity,” a point his Brazilian counterpart, Celso Amorim, echoed.
“It was useless to continue the discussion on the basis of the numbers put on the table,” Amorim said[link]
While there is Little doubt that the developing countries must open their own economies for Western companies, the obstinate refusal of the developed world to curtail agricultural subsidies is inexplicable. As Kamal Nath correctly noted, American position is hardly tenable when its best offer is higher than the current level of subsidies!
Agricultural subsidies in rich nations make little sense; hardly 1% of American population is engaged in Agriculture. Yet driven by populist considerations, politicians continue to deny market access to farmers in poor countries.
If America and Europe truly want to help the developing nations, then, instead of aid, they should offer market access.
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