BUDAPEST, Hungary -During the upcoming world trade talks, one of the most productive Eastern European countries expects to switch trade camps, to become a member of the protectionist European Union.
Until last year, Hungary was a founding member of the 12-year-old Cairns Group of medium-sized exporters, formed to promote freer trade and to fight European and American subsidies. In the last trade talks, Hungary and Canada were Cairns allies. Now, the lure of the rich European market and EU subsidies is too great. Hungary is anxious to leave its free trade rhetoric behind.
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“Yet again, Hungarian agriculture is facing a historic step, another restructuring,” agriculture minister Jozsef Torgyan wrote in this year’s report from his department. “At the turn of the century, it has to be able to ensure that the Hungarian countryside continues to give life to the nation with the purpose of material and spiritual renewal.”
Cynical observers from some western embassies see that as a rough Hungarian translation for: Give us the keys to the EU subsidy bank.
“Hungary at the moment is going for a full integration with the European Union and as soon as possible,” said Attila Dusek, an international relations specialist within the Hungarian agriculture ministry.
“We would like to enjoy the benefits of membership to the maximum.”
In the short term, it means one more country that favored trade liberalization at the last trade round now has changed positions. In the longer term, it shows the growing power and attraction of the European Union, already the richest trade bloc in the world. It started as six countries, expanded to 12, now is 15 and another 10 countries are in the queue to join between 2003-2005.
“We just think Europe is our future,” said Dusek. “Already, most of our trade is there. It is a natural progression.”
It helps that the EU has extended a welcome.
An EU report on the possibility of Hungarian membership noted that while it is far behind European farm investment and production standards, those are expected to increase. Meanwhile, Hungary’s 10 million people seem enthused at the prospect. A public opinion poll published Nov. 4 showed more than 80 percent in favor of EU membership.
It will be admission to one of the world’s richest clubs, after close to half a century as one of Europe’s sad-sack cousins, a Soviet satellite that descended into even deeper poverty after 1989 when the Soviet Union collapsed. EU membership will be some protection from Russian influence.
In 1986 when the Cairns Group was formed at a meeting in Australia on the verge of the last trade talks, Hungary’s membership offered the same sort of psychological boost.
“At the time politically, it was a great step to be part of the Cairns Group, to be from Eastern Europe and yet recognized as a trading country,” said Dusek. “Now, I think we have a greater opportunity.”
Oddly enough, Hungary’s farmers are sounding the alarm. The prospect of EU subsidies has a dark side – the need to be able to compete with EU farmers.
Hungary’s farmers are under-capitalized, too dominated by tiny non-commercial producers using equipment that is too old, and too poor to buy the inputs that will allow production at the European level. That makes them vulnerable to an onslaught of cheaper EU products once the border is opened.
Said Gyula MŽszaros, secretary general of the Hungarian Chamber of Agriculture: “We have major handicaps. If the government moves too fast, Hungarian peasants will be the victims, unable to compete.”
