Roy Denman's discourse on the innocence of the European Community in dealing with agricultural trade ("Farm Crisis: Don't Blame Europe," op-ed, March 17) is admirable in its rhetoric, but less so in its conclusions.
As head of the delegation of the Commission of European Communities to the United States, he contends that the Community is bearing the major blame for U.S. agricultural problems when, in fact, it is blameless.
Wrong on both counts. No one in U.S. agriculture lays the current depressed farm situation at the Community's door. It is a global problem, requiring global solutions.
However, the Community is doing little to help make adjustments in its own agricultural production and marketing programs to help the world cope with the current marketing situation. Rather, it is considering recommendations to further increase subsidized farm prices, thereby stimulating production and adding to an already glutted world market.
And contrary to Denman's contention, this does hurt U.S. competition that seems prepared to beat any price.
To use Denman's own example, poultry, U.S. Department of Agriculture statistics show that the Community's share of the world broiler market was 37 percent in 1975-77 and 39 percent in 1982, while the U.S. share over the same period dropped from 31 percent to 20 percent.
When the Common Agricultural Policy for poultry and eggs was established in 1962, the Community was the world's largest importer of poultry and eggs. Today it is the largest exporter, producing beyond self-sufficiency and subsidizing the surplus into export, destabilizing the world market.
In the Middle East, U.S. broiler producers have lost markets to subsidized exports from the Community--and from Brazil, as Denman points out. The U.S. share dropped from as much as 18 percent in the early 1970s to one- tenth of one percent in 1982. In the same period, the EC and Brazilian share of this market increased dramatically and now accounts for virtually the entire trade. Despite negotiations on this inequity with the Brazilians and the Europeans, they continue to subsidize their poultry exports.
Some other specific examples of subsidized EC competition are:
* U.S. egg sales in Egypt dropped from 7.7 million dozen in 1981 to 669,000 in 1982, largely on account of Community export subsidies of about 11.5 cents per dozen.
* In wheat, Community exports have risen from a total of 1.2 million tons or 3 percent of world trade in 1970-71 to an estimated 12.5 million tons or 13 percent of trade in 1982-83, a year when U.S. wheat exports are expected to drop by almost 8 million tons.
Furthermore, Denman states that agricultural export subsidies were recognized as a fact of life during the Tokyo Round of trade negotiations. What he failed to add was that the Community succeeded in thwarting the efforts of the United States and other exporters to have the problem addressed squarely and solved during the trade negotiations.
The result was a vaguely worded Subsidies Code authorizing subsidized exports onto world markets if they don't take more than an "equitable share." Events have proved the code to be unworkable.
Just last month, trade negotiator Robert Strauss had this to say about the Community's use of subsidies: "There is no reason to let the European Community so subsidize its products that we can't compete in world markets. There is no reason in the world why we should let predatory trade practices destroy our markets. We should take action, and that is not protectionism."
At the GATT ministerial meeting last fall, which I attended, the Community stood alone among the assembled GATT member delegations in opposing mandated negotiations to come to grips with Denman's "fact of life"--to put teeth into the code. Faced with the Community's intransigence on export subsidies, the ministerial meeting deferred the issue by agreeing to a two-year study of the impact of national policies on trade.
So we are left with the Community-sanctioned Subsidies Code, which a recent GATT fact-finding panel on wheat flour agreed is not stringent or effective enough to define an "equitable share" of the market, let alone to compensate countries losing markets because of code violations.
No, the United States does not want the European Community to "get off" the world market, as Denman claims. We only want the Community to relieve the world market of its artificially high, surplus-producing farm support prices.
What the Community does at home is the Community's business, but when the cost is laid at the rest of the world's door, we blame the Community for that. That kind of policy is a "beggar thy neighbor" policy.