Tuesday, July 05, 2005

Nice one, Bush - over to you Chirac

The offer from Bush to phase out subsidies to US agriculture if the EU reciprocates on CAP could be as important as Gorbechv's offer to Reagan to withdraw the SS20s if NATO did not deploy the Pershing 2 and the Cruise missiles to counter the Soviet threat (six minutes flying time from launch sites in the then East Germany (actually his predecessors had been offered the same deal by the US but had previously rejected it outright).

This represented a "sea change" in Soviet defence policy and led to the remaking of Eastern Europe and the collapse of communism.

If the end of US-EU agriculture subsidies is really put on the table there could indeed be a major change in world economic prospects. The main obstacle may be France. The common belief is that no President would get elected offering to put the CAP to the sword, but who knows?

It is important not to drive the French and Germans into embarrassing defence of the wasteful CAP. Negotiations should concentrate on the transition period to dismantle the CAP and to timetable the end to US agricultural subsidies. The end of protectionist subsidies to agriculture would begin to raise the peoples of developing countries out of poverty from growth in their domestic agricultural markets and from exports.

It took several years to bring about the ending of the Cold War; it may take as long to end the Protectionist Stalemate, wholly within the political will of the richest countries in the global economy. But the developing countries have their bit to do too - ending by domestic regime change (and notice that external regime might be considered also by their neighbours) the corrupt governments that stand in the way of dealing with poverty by allowing wealth to be created by individuals in their countries to benefit their societies.


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