,,Augean Stables"
BERLIN German Business organisations are again demanding a massive cut in EU agricultural subsidies and stirring up the long run conflicts between Berlin and Paris. In order to conclude the long desired free trade agreement with the South American Trade Alliance, Mercosur, there must be a reduction in those large EU agricultural subsidies in defence of which the EU caused the collapse of the recent World Trade Organisation negotiations at Cancun. Now German industry is saying that the French Government was responsible and it is time for the EU to ,,clear out the Augean Stables".
The German ,,Ibero-Amerika-Verein"( ,,Latin America Association") regards any further delay in the reduction of EU agricultural subsidies, which to the largest extent benefit France, as a serious threat to Berlin's economic interests. ,,Through the initiative of Brasil a block of countries has come into being which represents a credible trade partner for the two great agricultural protectionist powers - the EU and the USA,"referring to the G21 group which made such an impact at Cancun: ,,This is the beginning of a dangerous development which requires a swift response."
Such demands from the influential ,,Latin America Association"concerned with foreign trade would endanger the present superficial unity of Berlin and Paris. The Franco-German agreement on trade matters was predicated on Germany's willingness for the time being not to question EU farm subsidies. But there is now in South America a competition between the EU and the USA for free trade agreements with that block, a competition which could seriously damage German companies should the USA make a trade agreement before the EU.
A reduction in EU farm subsidies would also be necessary in order to re-start the stalled WTO talks - which the German Foundation for Science and Politics ( ,,Stiftung Wissenschaft und Politik") has specifically demanded. This foreign policy think tank of the German Government tells ,,international decision makers", who might not see the true importance of a multilateral trade organisation, that historically it was the consequences of protectionism during the rise of the Nazi movement which preceded the Second World War: ,,History teaches us that there are parallels to today: in the 1920s as in the 1990s liberalisation and deregulation were propagated: a multilateral organisation, the League of Nations, established free trade but it did not last long. There soon followed in the 1930s economic protection and the formation of regional blocks."
See also earlier articles Hold the thief!and Berlin: EU must assert itself against the USA in Latin America
Sources:
Die Welthandelsorganisation nach Cancun; www.swp-berlin.org
Freihandel EU-Mercosur und FTAA bedroht; Pressemitteilung von Peter Rösler, stellvertretender Geschäftsführer des Ibero-Amerika-Vereins 07.10.2003