June 15, 2001, Article on G7 Finance Ministers meeting

Toronto Star
Jun. 15, 01:00 EDT
Manley blasts U.S. on farm-aid
Finance minister denounces $190 billion deal
Kelly Toughill
Atlantic Canada Bureau
HALIFAX — Deputy Prime Minister John Manley came out swinging in his international debut as finance minister yesterday, chastising a top U.S. official for helping the drug trade and hurting the poor.
"Clearly there is a Canadian concern about this," Manley said of a $190 billion (U.S.) farm-aid package passed recently by Congress.
In an hour-long meeting with U.S. Treasury Secretary Paul O'Neill, Manley complained the subsidies would encourage opium production in Afghanistan and discourage development efforts in poor nations.
"It's going to be very difficult for (the U.S.) to advance the cause of trade liberalization with ... the U.S. farm bill behind (them)," Manley told reporters before his meeting.
Afghan farmers who now grow poppies for the opium trade can't switch to food crops if they must compete with subsidized U.S. crops, he said.
"It makes it very difficult for the world community to succeed in urging Afghan farmers to convert from producing poppies to producing (food) crops," he said.
"So not only is there a direct implication for Canadian farmers, there is also an implication for development. We want these people not producing opium. We want them producing food and selling it in the world markets."
Manley also warned that the U.S. bill would cost Canadian taxpayers money.
"It relates to the impact on our farmers, the impact on our finances, because we are going to need to put a package together that supports our agricultural community," Manley told reporters.
Manley is hosting a meeting of finance ministers in preparation for this month's meeting of G-8 government heads in Kananaskis, Alta. It is his first meeting with his counterparts since he was named to replace former finance minister Paul Martin almost two weeks ago.
The finance ministers are expected to announce a breakthrough on aid to developing countries after their meetings wrap up tomorrow.
Canada has brokered a tentative deal over how to spend $22 billion in aid to poor countries, senior government officials said yesterday.
President George W. Bush wanted aid money turned into grants instead of loans, but European countries balked. Under the deal about 20 per cent of the money will be grants.
Ministers will discuss the compromise this morning, and a special aid package for Africa, and changing a debt-relief program for poor countries.
The meeting of finance ministers from the world's leading economies was held in a tightly guarded convention centre. Police snipers watched from the roof of the old city hall as Manley talked with reporters, and a police helicopter circled the area for most of the day.
Only about 200 protesters demonstrated against the gathering, marching from a park to a square opposite the building where the ministers were meeting and then through the downtown core, beating on drums.
"Let's make a lot of noise and try to prevent them from doing business as usual as they have their little meetings behind closed doors," said one speaker.
Several activists came to Halifax from Ottawa and Washington, D.C., hoping to press their message of reform of international support programs.
Njoki Njehu, from Kenya, said aid agencies force countries across Africa to adopt harmful economic polices as a condition of development money and debt relief.
In Malawi, a 14-year-old boy died because his family couldn't afford the 33-cent health-clinic fee that was adopted under international debt-relief rules, she said.