Sunday, August 24, 2003

WTO and agriculture and protectionism in developed countries

Pragmatic Indian politician and former central minister of Commerce and law at various times, P Chidambaram writes in the Indian Express about alliance making and trade negotiations. He talks about agricultural support / subsidies in the US and the EU.

An obvious yet difficult to change fact is that the Western countries' subsidies and high tariffs in agriculture makes for very poor economic logic. Western farmers produce at higher costs yet sell at lower prices because fo government support - and continue to do so because of that very support. So you not only distort the present market, you distort the investments and future plans of economic agents in a way that benefits few (Western farmers) and costs many (poor farmers in the developing countries, & the Western consumers). An interesting contrast is the status of the sectors where developed countries do have comparative advantages. IPR laws, drugs and insurance anyone? See the Guardian's blog about abolishing agricultural subsidies kickaas for some interesting readings.


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