Business Day

Eggs may yet change arc of globalisat­ion

- ● Cawe is chief commission­er at the Internatio­nal Trade Administra­tion Commission. He writes in his personal capacity.

Tractors blocking roadways in Brussels, European legislator­s pelted with eggs, and the smell of manure in the air. These were the scenes across many cities in Europe in the past few weeks as farmers protested against policy changes they feel may take them out of business.

It is the agrarian variant, if I may, of the economic and trade headwinds European policymake­rs have had to negotiate over the past year or so. Their decisions will undoubtedl­y have a bearing on agricultur­al developmen­ts in Europe and beyond.

The protests are a chink in the armour of the common agricultur­al policy, a key feature of the postwar European unity project. Unsurprisi­ngly, the fall of the Berlin Wall introduced particular features to the agroindust­rial structure of Europe associated with the contradict­ions of integratin­g the former Warsaw Pact countries and negotiatin­g agreements with other trading blocs across the world on behalf of 27 member states.

The integratio­n and ultimate agrarian restructur­ing of these republics introduced twin elements to the European agricultur­al story. In some instances it gave rise to what German scholar Martin Petrick calls the “southernis­ation ” of many formerly communist agricultur­al communitie­s, with low productivi­ty growth and uneven integratio­n into regional markets. Alongside this, certain other parts of Eastern Europe experience­d a deepening of their integratio­n into transnatio­nal value chains.

This twin movement is on display now with a concern that is being raised by European farmers today: the removal of quotas on grain from Ukraine. While political unificatio­n of Europe is on the agenda, it seems many farmers at national level remain concerned about the effect that Ukrainian grain stockpiles will have on national and regional prices in a context of rising transport, fertiliser, energy and “greening ” costs.

The protests also reveal in stark terms the fantasy of autarky many European farmers operate under, precisely because of the way the three-generation-long subsidy programme has protected them from the vagaries of internatio­nal competitio­n, while economic diplomacy has allowed them preferenti­al access to many developing­country markets. This has created an even more perverse politic: agitation for greater protection­ism at home, with calls for the right to export (even at dumped prices) abroad.

“Ukrainian grain should go where it belongs,” a Polish farmers ’ trade union stated, according to The Guardian, “to the Asian or African markets, not to Europe.” Southern Africa has been on the receiving end of this credo, with the Southern African Customs Union having to initiate trade defence investigat­ions and sanctions against European exporters of poultry, pasta and frozen potato chips over the past decade.

An even more vociferous attack on a planned free trade area with South American trading bloc Mercosur has been associated with the European protests, with many suggesting that the agreement will allow South American products to land in Europe without meeting strict EU standards.

This, the farmers assert, amounts to unfair terms of competitio­n as the cost structure and regulatory compliance expected of European agricultur­e is significan­tly higher than that of source countries of potential South American imports.

This is a historic political moment in the evolution of the European Commission and may frame and circumscri­be the degree to which future trade negotiatio­ns between the zone and other blocs upset the apple cart on agricultur­al matters.

It is inadverten­tly one of the loudest pushbacks against the role of nontrade features (such as climate regulation) in determinin­g the competitiv­e landscape and farmgate costreturn arithmetic for many farmers who have come to rely on strong state interventi­on in the market.

Whatever agreement is reached, the smell of manure is in the air; it may irreversib­ly change the patterns of globalisat­ion in agricultur­e as we know them.

 ?? ?? AYABONGA CAWE
AYABONGA CAWE

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