The beginning of the new semester ushers in the fall season of student activism. This year offers the choice opportunity to combine the pleasures of demonstrating against the evils of globalization with the sunny paradise of Cancun. If you act quickly, you can probably still book tickets to the Sept. 4-11 meetings of the World Trade Organization. The first two weeks of class are pointless anyway, so pack your bags and prepare to drink in margaritas and social justice.
Unfortunately, the solution offered by most antiglobalization protesters is wrong. The United States, along with Europe and Japan, has spread the free trade gospel with the zeal of missionaries, but has yet to accept its own religion. The hypocrisy of advocating open trade while insulating our own industries from risk with exorbitant subsidies has not only devalued the creed, but, as the New York Times stated, is creating a \harvest of poverty."" In order to provide the riches promised, the United States must not retreat from free trade but actually practice it. By opening our agricultural markets we can provide the developing world with more prosperity than possible through any aid or loan.
Each year, the United States, Europe and Japan spend $320 billion in subsidies to farmers. As an example, compare the farmer in Europe who earns $2.50 a day in subsidies for each cow owned to the more than 2 billion people worldwide who live on less than $2 a day.
Obviously, this disparity creates a nearly impenetrable barrier to the markets of the developed world.
In order for free trade to work, the lack of infrastructure in poor countries must be offset by cheaper labor so that farmers in the developing world can compete. Yet this cheap labor advantage has been eliminated by the rich countries' continued reliance on subsidies that keep production costs so artificially low that they can undercut farmers in the developing world. American corn growers have received more than $34 billion in subsidies since 1995, which has allowed them to sell corn at two-thirds the cost of production. Notice that our farmers are selling corn for less than it costs to grow. This practice of product-dumping destroys competition and the livelihood of farmers in poor countries.
The money is viewed as supporting the hardworking family farmers who are so important to our cultural heritage. The benefits of subsidies are very concentrated and important at the local level; the costs are diffuse and hidden at the federal level. The$180 billion farm bill passed by Congress in 2002 is often criticized as fiscally irresponsible, but its truly devastating impact is felt in the developing world. Americans need to realize that subsidies waste lives by destroying the ability of poor farmers to sell their crops.
Poverty, hunger and AIDS are often viewed as problems to be resolved through aid, charity and grants. Although laudable, the money pales in comparison to the money poor nations would gain if rich countries halted farm subsidies. The International Monetary Fund estimates that the developing world would gain at least $120 billion if wealthy countries eliminated farm trade barriers and subsidies. This is much larger than the $50 billion in development assistance they received last year.
For too long the United States, Europe and Japan have forced the developing world to play a rigged trade game. Besides impoverishing millions, this policy has created a deep-seated resentment at the hypocrisy of our trade policy. We can no longer risk the outrage created by treating globalization as a one-way street. President Bush must push the United States and other rich countries to eliminate farm subsidies. Even more than aid, the developing world now needs a fair chance.
kiswanson@wisc.edu.
