At Odds Over Support Policies : Common Market, U.S. Debate Farm Issues
The European Economic Community warned the United States on Thursday not to use the Common Market’s farm-support policy as a scapegoat for the economic hardships facing American farmers today.
Instead, the United States should consider the effects of the strong dollar, the EEC said.
“It is a basic human weakness, when confronted with difficulties, to seek to place the responsibility for one’s plight upon others,” EEC Agriculture Commissioner Frans Andriessen told a gathering of U.S. and European journalists and policy-makers, including John R. Block, the U.S. secretary of agriculture.
On Tuesday, Block announced the subsidized sale of up to 1 million metric tons of wheat to Algeria to combat what he termed the Common Market’s unfair trade practices in global food sales, notably its food export subsidies.
Andriessen declined to say what retaliation the EEC may be planning, if any.
But his comments and those by Block illustrated the growing tension between the EEC and the United States in their surge for global markets for their respective farm products.
EEC External Relations Commissioner Willy De Clercq said he “regretted” the U.S. wheat sale to Algeria.
“We must step away from a cycle of action, reaction and retaliation,” he said.
Block took issue with Andriessen’s contention that the EEC and the United States, during the 1970s--when world farm trade expanded by 15% a year--had captured their “fair share” of the market.
Complaints on Subsidies
“What is the right and fair share?” Block asked. “I do not know. I think we are missing the point when we talk about fair share,” he said.
“In all due respect, we do not share the idea of a fair share of the market. I believe we have to get to the point where we compete” in the world market.
The United Sates, which depends on the world market as an outlet for close to a third of its farm production, has long complained that the EEC’s subsidies for farm exports hurt U.S. farm sales overseas.
Although Block acknowledged that, in world trade, “our biggest problem is the strong dollar,” he warned the Europeans that their export subsidies have spawned calls for retaliatory actions in the United States.
“The mood in Congress is not good,” he said, pointing out that American farmers have suffered a 25% drop in export sales value in the past five years.
“Since 1980, our share of the world market in wheat, feed grains, rice and cotton has declined from 59% to 43%.”
Market Share Tumbles
On May 15, Block announced that the United States would give away $2 billion worth of government-owned surplus commodities to boost overseas sales of farm products.
The deal with Algeria, a traditional French market, was announced because America’s share of that market had tumbled to 16% from 41% five years ago, according to the U.S. government.
During that same period, the EEC’s share rose from 29% to 59%, the United States has claimed, but the latter figures were contested here by EEC officials.
Andriessen and Block spoke on the first day of a two-day conference in this southern Dutch city dealing with transatlantic trade issues.
Andriessen countered Block’s views by saying that farm-support policies in both the United States and Europe had created an excess of supply over demand.
Referring to the strong dollar, which discourages overseas sales, he said world trade was “beset with many difficulties,” including a U.S. trade deficit exceeding $130 billion.
The EEC’s costly farm-support program does not violate the General Agreement on Trade and Tariffs, Andriessen said.
He added that the EEC, like the United States, has begun to reduce government’s role in agriculture and to let market forces be more prominent.