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Trade Restrictions Show Hypocrisy

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A lesson in government hypocrisy — as if one were needed these days — is to be found in the agricultural policies of the rich nations of the world, including the United States.

The U.S. government incessantly proclaims its desire to help the world’s poor. Empty words. Sure, the politicians force the suffering American taxpayers to provide foreign aid to the developing countries’ governments. But what’s good for a government is usually not good for those who live under it. Meanwhile, the people of those nations are held down by a constellation of U.S. (and European) tariffs and quotas that stifle their ability to improve their own conditions.

Once again government thwarts social cooperation, which is the essence of the division of labor and economic exchange. American consumers would love to buy low-priced clothing, shoes, and agricultural products from abroad. Producers in the developing world would love to sell them those things. But these exchanges never come to fruition. Why? Because the U.S. government forbids it. And why does it do that? Because domestic producers and farmers have the political pull. Thus, tariffs raise the price of low-cost foreign products so that they are less attractive to Americans than domestic alternatives. And import quotas suppress supply, forcing Americans to pay more for fewer goods.

This is a double abomination. It makes a mockery of all those pledges to help lift the world’s poor out of poverty. U.S. policy consists of throwing a few crumbs (forced from the taxpayers) while stifling self-help through economic enterprise. Moreover, it exposes the hypocrisy of all those politicians who say they want to end poverty at home. If they really wanted to do that, they would work to sweep away the laws that artificially raise the price of clothing and food. If people in America had access to foreign-made products at free-market prices, they’d find it much easier to care for their children. So why don’t we hear our misleaders calling for free trade — for the children? The answer is simple: they don’t want to lose the votes of certain businessmen, unions, or farmers.

Because protectionism is rampant in the West, we should applaud China, India, Brazil, and the rest of the “Group of 21” for demanding that the industrialized world drop its trade restrictions on agricultural products and eliminate farm subsidies. The subsidies encourage Western farmers to overproduce and to dump their surpluses in the developing world, throttling local producers. The Group of 21 threatened to oppose new trade agreements during the recent meeting of the World Trade Organization in Cancun, Mexico, unless their demands were met.

As the Los Angeles Times put it, “The announcement amounts to a bold challenge to the hegemony of the United States and European Union in setting the world’s trade rules and agenda.” But observers are expecting the United States and European Union to put the screws to the developing nations in order to keep them from upsetting the meeting. One way to do that would be to threaten even higher tariffs and lower quotas.

If this doesn’t show the malevolence of the Western governments, what would? The farmers in the developing world simply want to sell their products to willing buyers. But because of the political connections of wealthy farmers in the United States and Europe, they are forbidden to do so.

The Washington Post offers a poignant example from Brazil. Because of the pull of the American sugar growers, the U.S. government imposes quotas on sugar from Latin America, with a 244 percent tariff on any excess. Brazil could produce twice as much sugar if Americans were free to buy it. Because of the protectionist wall, poor Brazilians who would be working in the sugar industry today can’t find jobs. And Americans have to pay far more than the world price for sugar. This is indecent.

Globalization is under attack from a motley crew of socialists and phony anarchists (who want governments to stifle trade). A defense of true globalization — unfettered free trade — cannot be made by hypocritical protectionist governments beholden to special interests. Free traders of the world unite. We have nothing to lose but our chains.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.