The US likes to think that if poor countries simply open up their markets, greater prosperity will follow. Unfortunately, where agriculture is concerned, this is mere rhetoric. The US pays only lip service to free market principles, favoring Washington lobbyists and campaign contributors who demand just the opposite. Indeed, it is the US' own agricultural subsidies that helped kill, at least for now, the so-called Doha Development Round of trade negotiations that were supposed to give poor countries new opportunities to enhance their growth.
Subsidies hurt developing country farmers because they lead to higher output -- and lower global prices. The Bush administration, supposedly committed to free markets around the world, has actually almost doubled the level of agricultural subsidies in the US.
Cotton illustrates the problem. Without subsidies, it would not pay for the US to produce much cotton; with them, the US is the world's largest cotton exporter. Some 25,000 rich US cotton farmers divide US$3 billion to US$4 billion in subsidies among themselves -- with most of the money going to a small fraction of the recipients.
The increased supply, meanwhile, depresses cotton prices, hurting some 10 million farmers in sub-Saharan Africa alone.
Seldom have so few done so much damage to so many. That damage is all the greater when we consider how the US' trade subsidies contributed to the demise of the Doha Round.
Rather than offering to do away with its cotton subsidies, the US offered to open up its markets to cotton imports -- an essentially meaningless public-relations move that quickly backfired. Owing to its huge subsidies, the US exports cotton, and it would import little even if formal barriers were removed.
Thus, recent trade negotiations have a surreal air about them, because, whatever their outcome, ultimately cotton subsidies will have to go.
Brazil, frustrated with the US' intransigence, brought a case against US cotton subsidies before the WTO, which ruled as almost any economist would: the subsidies distort world trade and are therefore prohibited.
Faced with the WTO order, the US will try to comply with the letter of the law and avoid its spirit, making changes in the subsidy program to ensure "technical" compliance. But these attempts will almost surely fail; in the end -- though it may take years -- cotton subsidies will be eliminated.
Of course, the EU's subsidies are far larger, but, in contrast to the US, Europe has made some effort to reduce them, especially export subsidies. While export subsidies appear more obviously "trade distorting," the US' cotton and other subsidies are in fact almost as bad. When subsidies lead to increased production with little increase in consumption, as is typical with agricultural commodities, higher output translates directly into higher exports, which translate directly into lower prices for producers, lower incomes for farmers, and more poverty in the Third World, including millions of cotton farmers eking out subsistence incomes in semi-arid conditions.
The US and other advanced countries are the real losers from the demise of the Doha Round. Had the Bush administration fulfilled its commitments, US taxpayers would have benefited from the elimination of huge agricultural subsidies -- a real boon in this era of yawning budget deficits. Americans would have been better off as consumers, too, with increased access to a variety of low-cost goods from poor countries.
Likewise, migration pressure would have been reduced, because it is the huge disparity in incomes more than anything else that leads people to leave their homes and families to immigrate to the US. A fair trade regime would have helped reduce that disparity.
Citizens throughout the rich developed world all stand to benefit from a more prosperous globe -- especially a world in which there is less poverty, with fewer people facing despair. For we all suffer from the political instability to which such despair gives rise.
But it is the US that perhaps now stands to gain the most by reviving the Doha talks with a more credible and generous offer. The US' influence in the world has suffered greatly in the last few years; the Bush administration's hypocritical use of free-market rhetoric while pursuing protectionist policies has made matters worse.
US national interests thus dictate a change of policy. But there is also another powerful rationale for doing so: treating fairly those who are poorer and less powerful is the morally right thing to do.
Joseph Stiglitz is a Nobel laureate in economics.
Copyright: Project Syndicate
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.
Since the Russian invasion of Ukraine in February 2022, people have been asking if Taiwan is the next Ukraine. At a G7 meeting of national leaders in January, Japanese Prime Minister Fumio Kishida warned that Taiwan “could be the next Ukraine” if Chinese aggression is not checked. NATO Secretary-General Jens Stoltenberg has said that if Russia is not defeated, then “today, it’s Ukraine, tomorrow it can be Taiwan.” China does not like this rhetoric. Its diplomats ask people to stop saying “Ukraine today, Taiwan tomorrow.” However, the rhetoric and stated ambition of Chinese President Xi Jinping (習近平) on Taiwan shows strong parallels with