Thursday, August 21

From the New Republic (via Instapundit)

In the meantime, the ostensible U.S. position is an odd one. We accept the principle that trade in agricultural goods ought to be liberalized, and that this is a matter of justice as well as of efficiency. But we're not willing to give any more than Europe and Japan are--and "Europe," in this case, means "France." The current administration is supposed to be unburdened by the temptation to wait for French approval for everything that happens in the international arena; it's supposed to be willing to indulge some American idealism rather than reducing everything to the cynical level of Gallic sophistication. Where's a bit of unilateralism when you need it?

This is a disingenuous position to say the least. No American Government can abolish agricultural subsidies. Neither can the Europeans or the Japanese. While politicians will talk this is another Kyoto treaty. A lot of hot air and very little reality. (The French in this case is a convenient scapegoat for everyone)

The reality is that economically it might be better for the industrialized nations to remove the subsidies, but politically and socially this is not possible. The costs of being dependant on the third world for food and having a countryside that has collapsed economically is not something that can be realistically considered. (And it 'would' be the consequence in the end. Some quicker the others though, i.e. Japan)

No. Any politician in America, Europe or Japan that says subsidies must be abolished is either lying or is not going to be in politics for much longer.

South Africa does not have agricultural subsidies, yet we compete very successfully on the world market. Subsidies do not make for a flexible agricultural sector. It is control from above and the true capitalist style we use will always be more competitive. We import cheap Italian tomatoes, cheap French wine, cheap American Rice and cheap Spanish Olive Oil. We still compete successfully in all these markets. But it is in the niche market, where moving fast and spotting opportunities that we can compete the best because of our third world advantages. (Cheap labour, resources, exchange rate etc.)

The main points in any true negotiation should be that trade 'barriers' be lifted. "We can compete in an unfair market, but let us compete!" should be our slogan. The Europeans in this regards are the worst culprits, with more and more useless regulation being used as barriers to free trade. (EU inspections of premises, licences, more inspections in harbours so produce rots, No GM foods, etc, etc.)


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