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European Union

G8 Leaders Face Challenge to Scrap Agricultural Subsidies, President Bush Says

Strategic Insights

— 1 min read

President Bush's challenge to EU leaders to scrap massive agricultural subsidies in the developed world has come on the eve of the G8 summit in Gleneagles, where leaders are expected to make significant commitments to combating poverty in Africa. Bush said that opening markets to Africa would reduce the need for aid, and that the US was ready to drop its own payouts to American farmers if Europe had the courage to do the same. The call to scrap agricultural subsidies in the developed world follows that of Tony Blair, who recently said the system of over-generous subsidies was "hypocrisy" that could no longer be ignored.

Key Takeaways:

  • President Bush challenged EU leaders to scrap massive agricultural subsidies paid to their farmers, saying free trade with Africa would eliminate the need for Third World aid.
  • The US is willing to drop its own agricultural subsidies if Europe had the courage to do the same, according to Bush.
  • Tony Blair recently called the system of over-generous subsidies "hypocrisy" that could no longer be ignored.
  • Farmers in developed countries receive more than £150 billion in subsidies.
  • Blair suggested that the CAP, which is fiercely defended by President Chirac of France, should be abandoned as part of a complete overhaul of the EU's finances.
  • A senior source close to the British G8 negotiating team welcomed Bush's comments, saying he had delivered a "major challenge to the European Union".
  • The British are in talks aimed at persuading the G8 to wipe out all export subsidies in the next five years.
  • Gordon Brown said that reform of global trading rules, with the removal of distorting tariffs and subsidies, would allow African countries to expand their economies.
  • Oxfam and ActionAid criticized the deals for falling short of what was required and urged the G8 leaders to take further steps.

Statistics:

  • £150 billion: the amount of subsidies farmers in developed countries receive.
  • 5 years: the timeframe for wiping out all export subsidies proposed by the British.
  • £5 million: the number of lives Brown hopes to save in Africa through a vaccine fund for measles, TB, and polio.
  • 6 million: the number of people who watched Live 8.

Sources:

  • Interview with President Bush by Sir Trevor McDonald, ITV.
  • Times article, June 2005.
  • International Trade Commission, European Union.
  • Guardian, June 2005.
  • ActionAid, Make Poverty History campaign.

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