Free v’s Subsidised US TradeThursday, Jan 17, 2002
Helen Clark is planning a visit to the US. A trip that will include an attempt to advance a free trade
agreement between the US and NZ.
However it seems unlikely that any agreement will include free trade in agricultural products which
really makes any hope for an equitable trading agreement with the US an unlikely happening.
The US farm lobby sees a NZ – US trade agreement that included agriculture as a threat to America remaining
self sufficient in food – because it would end a program that has rewarded high cost US agriculture
producers at the expense of low cost international food producers such as NZ.
But even more concerning is this weeks reported speech by President Bush when speaking to a US farming
group who stated that “If you're the best in the world at what you do - which we are in farming
- then it seems like to me we ought to encourage that product to be sold not only here in America,
but level the playing field so it can be sold all across the world."
His speech then went on to say that the new Farm Bill passed by the US House of Representatives, proposes
to revive and enlarge the US Governments power to subsidise farm exports. He promised to agree
to a farm bill that provides "generous" farm subsidies and confirmed that the House bill proposes
a subsidy increase of about $US70 billion over 10 years, taking total payments to a record high
What a dreadful warning this is to the future of NZ’s international agricultural trade.
Its one thing to tolerate the obsequious claims of US politicians that they are balancing the interests
of their farmers economic well being against their wish to improve and support international trade
in the interests of world peace and harmony.
But for the US to re-implement a planned strategy of subsidisation of its international trade in farm
produce, after posturing that its wish was for the lowering of trade barriers, is the application
of destructive economic power at its very petulant worst.
If the US must subsidise its farmers then it is surely a responsibility for such an economically powerful
nation to keep the effects of that subsidisation within its own borders.
The US may feel it is right now at war with a shadowy enemy but the new face it is showing to its friends
is causing alarm and unease and suggests that the US needs a better eye and steadier hand on
the drafting gate when sorting friend from foe.