February 11, 2003

Not Serious on Freeing-Up Trade

WASHINGTON, FEB 10--The Bush Administration's first act in its Free Trade Agreement of the Americas negotiations is to take all discussion of agricultural subsidies off the table. This is not good. To say you won't even discuss what is the major hoped-for objective of the other partners in the negotiation is a very bad negotiating strategy--or is a very bad negotiating strategy if you want an agreement.

Bob Zoellick has got to know better.

As the first stage in negotiations to expand free trade throughout the Western Hemisphere, the Bush administration is offering to lift all tariffs on textiles and apparel within five years.

The proposal will be presented on Tuesday by Robert B. Zoellick, the United States trade representative, who prepared the offer to cover duties on everything from beef to lamps while making special concessions for the poorest nations, a senior trade official said. The goal, Mr. Zoellick said, is the eventual elimination of duties on goods and services from throughout North and South America.

But the administration will refuse to discuss reducing America's multibillion-dollar agricultural subsidies in the negotiations because they are not tariffs, the senior official said.

Posted by DeLong at February 11, 2003 04:32 PM | TrackBack

>The Bush Administration's first act in its Free Trade Agreement of the Americas negotiations is to take all discussion of agricultural subsidies off the table. This is not good.

Agreed in principle though the administration's negotiating position may have been influenced by the intransigence of the EU about unwinding its Common Agricultural Policy. Only a couple of months back, a UK minister was on record complaining about paying $2 a day in subsidies for every cow in Europe.

Posted by: Bob Briant on February 11, 2003 04:45 PM

The EU isn't a party to the Free Trade Agreement of the Americas negotiations.

Posted by: Stan on February 12, 2003 08:50 AM

Read Levy's article. See the EU connection.

Posted by: Stan on February 12, 2003 08:54 AM

More lies from the alleged "free trade" camp. This seems to me to be Zoellick and Bush totally giving up on the FTAA. As I am against the FTAA, I am somewhat glad about this. All it really does is put off the inevitable reckoning till the next WTO round.

The fact is that the first world continues to put the screws to the developing world through trade policy. We have not yet fufilled our obligations under the Uraguay round or indeed under NAFTA. The only reason for moving to a new round at all, either in Latin America or in the WTO is to tackle agricultural "non-tariff" barriers. What will bring Lula to the table now?

If we really cared about free trade (and it is my contention that the US government has no ideological dispostion toward any trade regime that could remotely be called free) we would take the lead on these issues instead of whining about Europe. Europe's agricultural subsidies have a social nature that allows them to hold onto traditional agricultural norms. The US farm bills send their subsidies to enormous conglomerates who distort the world food market every single day.

The US farm system is in grave danger from monocropping, GMO contamination, biopharmaceutical contamination, and a bizzarre intellectual property system that allows drifting seeds to be the vessel for land piracy. Though Europe's non-tariff barriers are also high, the effects of the US farm bill are much more ruinous in their application.

Check out these articles:
1 on biopharmaceutical contamination


1 on Monsanto's rogue IP strategies


Posted by: biz on February 12, 2003 10:06 AM

This may be an odd question, but where do national security and social stability concerns figure into the "free trade" paradigm.

Anyone who knows anything about agriculture knows that US policy, and likely the policy in the rest of the advanced world, is to make sure there is a surplus food supply at all times at either a stagnant or fairly slow increasing price structure.

No leader in a democracy every wants his citizens to go to the store and find either no milk and bread or find that the price of milk and bread is 100 percent higher than last week.

Likewise, it seems obvious that there should be certain aspects of manufacturing and certain natural resources for which no country would like to become in anyway dependent on another country.

To be it simply, doesn't "free trade" on clothing really occupy a different universe than "free trade" on things like food or steel?


Posted by: MBunge on February 12, 2003 04:11 PM

Yes and no, Mike. Yes, one might want to pay the economic costs of preserving a particular domestic industry for national security purposes (but you ought to measure that cost and put it under the Defence buget). No, this argument can't explain European or US behaviour on agriculture because they both produce food far in excess of domestic requirements - and would even in the absence of subsidies. In fact, if "food security" was the issue you'd structure the assistance to support parts of the industry that you can't replace easily (ie that don't have much foreign competition) - which is definitely not what either the EU or US does.

Posted by: derrida derider on February 12, 2003 09:45 PM
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