Can France hold out on EU farm reform?

The Nation, Asia News Network, Bangkok

The battle lines have been drawn now that the European Commission has endorsed a proposal to reform the European Union's huge farm-subsidy system, which encourages overproduction and thereby depresses world prices of agricultural products. The proposal, long pushed by EU Farm Commissioner Franz Fischler, ought to be rigorously followed up by the Cairns Group of agricultural exporting nations (of which Thailand is an active member) and other developing countries.

The issue ought to become part of the Asia Europe Meeting (Asem) agenda, a key topic of negotiations between Thailand and the EU, and bilateral trade negotiations between Thailand and individual members of the EU.

The huge EU farm subsidy, which according to World Bank chief economist Nicholas Stern is a "sin ... on a very big scale" because it hampers economic growth in poor countries, will now have to be negotiated between the 15 EU member states.

The reform is backed by Germany, Britain, Denmark, Sweden and the Netherlands but opposed by France, Austria, Ireland, Portugal, Luxembourg and Spain. France, in particular, is bitterly opposed even to a quick negotiation process to reduce subsidies. This is because it is the biggest beneficiary of the subsidy system, and French President Jacques Chirac sees the Common Agriculture Policy as a populist policy to keep his farm voters happy.

But can France forever withstand the force of key EU members such as Germany, which has to dig into its pockets to finance the subsidy; the World Bank, the International Monetary Fund, and the World Trade Organization, all of which see the "sin" of such a luxury in the light of farmers in poor countries; and leading non-governmental organizations such as Oxfam.

The World Bank's Stern put it aptly: "It's quite wrong to speak to people about the advantages of trade, about the advantages of liberalization, about the advantages of markets, and then close your markets or restrict access to your markets in the way the rich countries are doing."

He could not be more right. The message also applies to the U.S. and Japan.

But now the pressure is on the EU, particularly France, which holds the next round of world trade negotiations hostage.

What is certain is that France wants the EU to become a counterbalance to the U.S. It has opposed any U.S.-led war on Iraq without United Nations backing. It wants to be the champion of local arts in the wake of globalization. It wants to lead the world in fashion and fine dining. It wants to excel in technology, business and international politics.

But a workable and legitimate global role for a nation such as France requires it to be more than an honest broker. It needs to show initiative and to give as well as take with a long-term view. Its ambitions cannot be served as long as it puts its farm sector before the world at large and continues to take advantage of its EU partners.