a smart bit of criticism. take time to read it if you care about things.
so, the doha development round of world trade organization negotiations (essentially a meeting of trade nations including the developed and developing world) will expire tomorrow unless congress decides to renew the talks before midnight tonight.
what does this mean? well, not too much, but its a foreboding sign. The round negotiations fill the purpose of solving trade disputes, most notably between the developing and developed world, but between any two trade partners, really. The DOHA rounds are expiring because the US and the EU can't get their act together about agricultural subsidies. The developing world (mostly india, brazil and china) is complaining (rightuflly so) that they have a comparative advantage in land and therefore a comparative advantage in agriculture. Unfortunately, they cannot use this advantage to further develop their economies because the US and the EU have extremely regulated agriculture markets that are protected against foreign competition.
What does this mean for us? well, primarily, if you have any sense of decency you would feel that the developing world could just use a break (granted if the developing world DOES industrialize all of a sudden, then we've got some serious environmental issues at hand, but thats something else entirely). Secondly, many argue that our agricultural subsidies are necessary to protect our economy blah blah blah, BUT, the DOHA rounds would have helped us get over this need for protectionism: the US was bargaining for more open markets from the developing world, what the developing world wanted in return is the end of the subsidies.
What are subsidies? government money given to farmers, either in the form of buying excess products or in direct payments. the excess products the government buys are put in grain silos that sit and rot. tax money is used for this purpose. lots of tax money. tax money that could go to more valuable things like, oh... helping to develop environmental business sectors or research? many say that US farmers who had to get loans out to pay for their land would go bankrupt without subsidies. there are a few things wrong with this, one, if the US is as market friendly as it says it is, then it should let the market decide who does or does not stay afloat. Personally, i don't agree with that, but a lot of extremely wealthy farmers (and farmers offspring, ie my economics professor who only owns a bit of land but manages to get thousands of dollars of subsidies each year, even though she does no farming herself) receive subsidies that they clearly do not need to keep their business profitable.
Its been proposed to congress that agricultural subsidies should be given only to farmers who net 200,000 or less on their farms each year. This would be a HUGE cut to subsidies. Does that give you an idea who the money is going to?
what does this mean? well, not too much, but its a foreboding sign. The round negotiations fill the purpose of solving trade disputes, most notably between the developing and developed world, but between any two trade partners, really. The DOHA rounds are expiring because the US and the EU can't get their act together about agricultural subsidies. The developing world (mostly india, brazil and china) is complaining (rightuflly so) that they have a comparative advantage in land and therefore a comparative advantage in agriculture. Unfortunately, they cannot use this advantage to further develop their economies because the US and the EU have extremely regulated agriculture markets that are protected against foreign competition.
What does this mean for us? well, primarily, if you have any sense of decency you would feel that the developing world could just use a break (granted if the developing world DOES industrialize all of a sudden, then we've got some serious environmental issues at hand, but thats something else entirely). Secondly, many argue that our agricultural subsidies are necessary to protect our economy blah blah blah, BUT, the DOHA rounds would have helped us get over this need for protectionism: the US was bargaining for more open markets from the developing world, what the developing world wanted in return is the end of the subsidies.
What are subsidies? government money given to farmers, either in the form of buying excess products or in direct payments. the excess products the government buys are put in grain silos that sit and rot. tax money is used for this purpose. lots of tax money. tax money that could go to more valuable things like, oh... helping to develop environmental business sectors or research? many say that US farmers who had to get loans out to pay for their land would go bankrupt without subsidies. there are a few things wrong with this, one, if the US is as market friendly as it says it is, then it should let the market decide who does or does not stay afloat. Personally, i don't agree with that, but a lot of extremely wealthy farmers (and farmers offspring, ie my economics professor who only owns a bit of land but manages to get thousands of dollars of subsidies each year, even though she does no farming herself) receive subsidies that they clearly do not need to keep their business profitable.
Its been proposed to congress that agricultural subsidies should be given only to farmers who net 200,000 or less on their farms each year. This would be a HUGE cut to subsidies. Does that give you an idea who the money is going to?