World trade and agri subsidiesnews
27 March 2007

For decades, most trade disputes have centred on manufactured goods, from steel to automobiles to consumer electronics. The protection that rich nations extend to their farmers through crop and export subsidies, tariffs, or outright quotas on imports has scarcely been open to debate.

Early in the game the United States gained exemptions from the free-trade rules for its politically sensitive agricultural and textile markets, effectively allowing them to remain highly protected.

When four African nations have asked that US and European subsidies to cotton farmers be reduced and that African farmers be compensated for their losses because of unfair competition. A counterproposal by wealthy nations simply called for a study of the issue and suggested that the Africans plant different crops.

The rich nations preach the virtues of free trade to the world, then shower their own farmers with $300 billion in subsidies that undercut the ability of farmers in the developing world to compete. According to a study by the International Food Policy Research Institute, US farm policies alone deprive developing countries of $11 billion annually in lost export income. In the case of European Union policies, the toll is $20 billion.

The U.S. collects more in tariffs from its trade with Bangladesh than from its trade with France. Japan imposes 1,000 per cent subsidies on imported rice. Mozambique loses as much because of European sugar subsidies as it gets from European foreign aid. And past agreements get broken. Industrial countries have pledged to eliminate their textile quotas by 2005. By now, three-quarters should have gone. Instead, the U.S. still maintains 80 per cent and Europe 70 per cent.


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World trade and agri subsidies