NYTimes.com Article: Those Illegal Farm Subsidies

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Dear Everyone;

A story from the NY Times on how the World Trade Organization is coming after US cotton subsidies. The $3 Billion a year tax payers cough up to 25,000 cotton farmers is now declared illegal. And will be in the WTO courts for judication.

What farm subsidy will be next? It is similar to the attack on the Bush administration and its steel industry support through punitive import tariffs. Bush had to pay the price and rescind the tariffs or face major fines and retaliatory tariffs across the board against all other US export products to Europe.

Maybe eventually sometime in the not to dim future all agriculture subsidies will be declared illegal. ( Along with all other tariffs and tax payers financed subsidies.) Then taxpayers can stop ponying up for the Congressional handouts to farmers and paying extra at the grocery store.

Ron Getty
SF Libertarian


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Those Illegal Farm Subsidies

April 28, 2004

America's lavish handouts to its farmers harvest poverty
throughout the developing world. And they are illegal as
well. That's the conclusion of a World Trade Organization
panel that heard Brazil's challenge to the cotton subsidies
that belie this nation's commitment to free and fair trade.

Cotton is far from the only crop that American farmers are
able to dump on the international market at low prices
thanks to federal subsidies. But it is one of the most
outrageous cases. Brazil was wise in choosing it as the
first target in the developing world's challenge of the
roughly $1 billion a day in subsidies that rich nations
dole out to their farmers. If the preliminary ruling
stands, as expected, it may mean the beginning of the end
for European and American practices that provide their
farmers an unfair advantage.

In addition to Brazil, an agricultural superpower, some of
the world's poorest nations, including the West African
republics of Mali, Benin and Burkina Faso, are vindicated
by the W.T.O.'s decision. Cotton is West Africa's cash
crop, the one economic activity in which the region has a
competitive advantage. By underwriting much of the costs of
America's 25,000 cotton farmers with checks that can total
$3 billion a year, Washington erases that advantage. Aided
by American experts who are critics of this warped system,
Brazil convincingly argued that in the absence of
subsidies, the United States would have produced and
exported substantially less cotton than it did in recent
years. Consequently, growers elsewhere would have enjoyed
greater market share and higher prices.

The glaring contradiction between American farm subsidies
and the principles underlying the global trade system has
long posed a moral and political problem for Washington.
Now it is also a legal problem. Instead of digging in its
heels and spending years appealing the panel's ruling, the
Bush administration needs to seize upon it as a reason to
negotiate the surrender of rich nations' trade-distorting
farm subsidies.

The administration has a mixed record on this issue. It
offered proposals to start weaning corporate farmers off
their subsidies two years ago - admittedly after approving
a farm bill that exacerbated the problem. Then it backed
away in the face of strong opposition from Congress and the
European Union. That retreat not only hurt the poor
nations' farmers, but also American taxpayers, consumers
and most business interests, including more competitive

The W.T.O.'s talks on the further liberalization of trade
faltered over the subsidy issue at Canc´┐Żn last year, but
this week's ruling will vastly strengthen the position of
Brazil and others advocating the dismantling of
agricultural subsidies that distort trade. The sooner they
prevail, the better.


Let's hope so. These decisions are also great ammunition against the economic liberals that claim that the WTO is in the back pocket of the US administration. If anything, the WTO is allowing the small economies to level the playing field via collective bargaining.

-- Steve