Tuesday, July 25, 2006

The Doha Trade Round has officially collapsed: That’s not a bad thing.

This morning allot of fingers are being pointed at who’s to blame for the collapse of the Doha trade round, which was meant to liberalize agricultural trade so developing nations could have the best chance possible for economic growth.

The collapse came when both developed and developing nations couldn’t agree on the reduction of subsidies and tariffs. The problem is that there was just to many conflicts of interest on all sides. For countries like the U.S. and France subsidies to farmers goes a long way come voting time making a serious reduction unlikely. For developing nations where farm already is their main industry the concern that they could be dumped on with cheap subsidized food from developed nations collapsing their own industries wasn’t worth the risk.

My view is that the collapse of the round is a good thing. Though I’m a huge supporter of free trade, when it comes to food I feel subsidies are a necessary evil as a matter of national security. We only need to look at our current problem of having to rely on foreign resources for our energy and how countries like Iran are able to use it to their advantage to come to the conclusion that keeping our food in house is a good move. If the Doha round was successful and the U.S. eliminated its subsidies to American farmers it is likely that at some point some other nation would have a comparative advantage over us causing the U.S. farm industry to disappear. This would result in our food coming from foreign sources the way our energy currently does leaving us at the mercy of a new set of countries.

Links to this post:

Create a Link

<< Home