Monday, September 15, 2003

I admit I have not been following free trade negotiations very closely lately, but I had thought that the negotiations would fail because US/EU would be unwilling to reduce their subsidies and tariffs on agriculture at the behest of the poorer countries. I didn't think it would be the other way around because the poorer countries suffer more from first-world tariffs and barriers than even from their own. However, I'm guessing that there are a couple really bad but powerful reasons why poor countries are keeping their tariffs and subsidies:
  • to show a tough negotiating position at the WTO, not to seem like the first world is pushing around the third world
  • to keep around their own popular tariffs and barriers, which benefit only special interest groups, but are politically popular

I'm basing this analysis on columns by Richard Tren in Tech Central Station and Ron Bailey in Reason, and Alan Wheatley (Reuters via Forbes) who calls it a "pyrrhic victory". (Coverage is divided though -- Globe and Mail writer Steven Chase puts the blame on rich countries, calling their concessions "timid cuts", and Lori Wallach blamed the rich countries for insisting on their own agenda). Some say the EU showed remarkable willingness to liberalize agricultural trade but never even got to the negotiating table.

This is sad, but the saddest thing is that we shouldn't even need to negotiate to liberalize trade. If the EU would liberalize its own agricultural trade practices, unilaterally, overall EU participants would benefit. If any poor country were to liberalize its own agricultural trade practices unilaterally it would benefit. Yet each group demands the other back down first. This is an example of "I'm going to continue hurting myself until you stop hurting yourself!" And the poor-country negotiators believe this to be a strong position, one that shows how they can win at the WTO. I don't see how good can come of this. High status as a tough negotiator is not worth several more years of increased poverty.

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