Unfree Trade
April 21st, 2008 by Peter SudermanFrom the FT today:
No one should forget that all countries rely on open trade to feed their populations. But we are already seeing actions at the national level, such as curbs on food exports, that have a damaging global impact. Completing the Doha round would play a critically helpful role in this regard, as it would reduce trade barriers and distortions and encourage agricultural trade.
With world food prices already on the rise as a result of ethanol policy, opening up trade to drive down prices and increase supply should certainly be a priority. Sadly, as Cato’s Sallie James points out, the two leading presidential contenders in the Democratic race have taken increasingly hostile views of open trade. Her summary:
Voters could expect a President McCain to promote freer trade and cuts in market-distorting subsidies, and a President Clinton or a President Obama to view free trade between voluntary actors as something to be restrained, loaded with conditions, or counterbalanced by an expansion of the welfare state.
In other words, Clinton and Obama believe in free trade — just as long as it isn’t really free.
April 21st, 2008 at 2:53 pm
Ethanol policy is but one of MANY MANY things driving up food prices worldwide. Don’t know why you’re playing fast and loose with this one, either, since there are plenty of other reasons that would make your point better.
These poor countries actually have a very good reason to keep their tariffs.
Food policy is one area where you free-marketers need to do more research. You have no idea the consequences of what you’re talking about right now.
April 21st, 2008 at 3:45 pm
Hmm, I don’t think I suggested that ethanol policy was the sole driver of rising food prices. But it is a factor, and a substantial one.
April 21st, 2008 at 4:25 pm
“With world food prices already on the rise as a result of ethanol policy”…what does that mean then?
April 23rd, 2008 at 2:22 pm
Consequences of free trade? If decreases in price are a consequence, please bring on the punishment!
The problem with people who attack free trade is they amplify minute details, while failing to acknowledge the advantages in the global economy. Take the classic example of the coffee bean industry. You decry the loss of farming jobs in Central America, yet you do not mention the shifting of those jobs to places like Vietnam, where the same industry gained two million jobs as a result of offering lower prices. Thus resulting in a net gain of over one million jobs globally. Let’s look at the big picture benefits of free trade as opposed to using knee jerk tactics and numbers in an effort to mislead the general public.
April 23rd, 2008 at 9:41 pm
Well, if only people would think globally in terms of jobs…I don’t think I’ll be holding my breath on that one…just like I won’t be holding my breath that we might get rid of all borders eventually.