Acton Institute Powerblog

Making Subsidies History?

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The worldwide Live 8 shows have come and gone, and are being hailed as perhaps the greatest collection of concerts ever. While moments like the introduction of Birhan Woldu or (to a lesser extent) the reunion of the estranged members of Pink Floyd certainly made for compelling television, only time will tell whether or not they will have a significant impact on Africa’s future.

One item of news that could have a significant impact seems to have been lost in the American media shuffle, however. Yesterday, in an interview on Britian’s ITV network, President George Bush indicated a willingness to end agricultural subsidies in the US if European leaders would do the same:

GEORGE BUSH: Let’s join hands as wealthy industrialised nations, and say to the world, we’re going to get rid of all our agricultural subsidies together. And so the position of the US Government is we’re willing to do so, and we will do so with the, uh, with our fine friends in the European Union.

TREVOR MCDONALD: So you would if they would? Because at the moment for example…

GEORGE BUSH: Absolutely…

TREVOR MCDONALD: …cotton farmers in this country get subsidised to the extent of US $230 per cotton acre. You’d get rid of those things if the EU does?

GEORGE BUSH: Absolutely. And I think we have an obligation to work together to do that and that’s why it’s very important that the Doha round of the WTO go forward.

Bush also noted the value of international trade: “The benefits that have come from opening up markets, our markets to them and their markets to us, far outweigh the benefits of aid.”

James Joyner notes that Bush’s challenge is unlikely to bear any fruit:

A bold rhetorical gesture, although ultimately an empty one. The president knows the EU, especially France, will never lift their subsidies. Further, even if they did, the U.S. Congress will not abolish them entirely, as too many congressional districts and states are heavily dependent on agriculture.

I tend to agree with that pessimistic analysis. However, I take some comfort in noting yet again an increased focus on the value of trade as a mechanism for lifting people out of poverty and building wealth in impoverished areas.

More: Writing in today’s Washington Times, Wes Pruden notes a clear-eyed assesment of the situation from a US diplomat:

William Bellamy, the U.S. ambassador to neighboring Kenya, startled the guests at his Fourth of July garden party yesterday with just the kind of bluntness needed to keep African aid in realistic perspective. “Turning on the fire hose of international compassion and asking Kenya and other African nations to drink from it is not a serious strategy for promoting growth or ending poverty.”

Marc Vander Maas

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