Monday, June 21, 2010

My (and Your) Tax Dollars to Subsidize Brazilian Cotton Farmers Indefinitely

Great* news!  Because of an agreement reached last week between the United States and Brazil, American citizens will continue to be forced to provide hundreds of millions of tax dollars in hush money"technical assistance" to Brazilian cotton farmers!  Granted, the new agreement also delays the imposition of about $1 billion in Brazilian retaliatory sanctions against American exports due to US refusal to implement multiple adverse WTO rulings against the US cotton subsidy program.  But considering the undeniable fact that such a move was in both country's commercial interests (the sanctions would punish Brazilian consumers and American exporters alike), the big news here is the embarrassing fact that the agreement continues the aforementioned Brazilian briberycompensation.  Cato's Sallie James does a good job summing up this debacle as follows:

Notwithstanding the efforts of four brave congressmen, the belated concession to reality by House Agriculture Committee Chairman Collin Peterson, and the misgivings of trade analysts including myself, it appears that the “temporary” deal struck by Brazil and the United States in April to ward off Brazil’s retaliation for WTO-illegal U.S. cotton supports is here to stay....
You will recall that the deal includes about $147 million worth of taxpayers’ money given to Brazilian cotton farmers in the form of “technical assistance,” just so we can continue our own insane cotton support programs without fear of U.S. exporters (including holders of patents and copyrights) being hit by retaliatory trade barriers and unpunished piracy.
Brazil in some senses has the right idea, of course. They recognize, correctly, that retaliation in the form of increased tariffs on American imports only hurts their own consumers, hence their stated desire for “negotiation and reform” instead of sanctions.  But they sure do have a lot of faith in the willingness of Congress to enact reform without serious pressure from, among others, aggrieved trade partners.
I hope their faith and saint-like patience is rewarded. In the meantime, we have (at least) two more years of subsidizing Brazilan farmers in addition to our own.
What a mess.  But I would disagree with Sallie on one thing: I don't think that the trade-savvy Brazilians have any delusions about the "willingness" of Congress to enact ag subsidy reforms, with or without foreign pressure.  Instead, I think the Brazilians realize perfectly well that (a) this Congress certainly isn't going to do anything about the US cotton program, (b) a billion dollars in trade sanctions will do nothing but harm their struggling economy; and (c) their threat of sanctions loses value the longer it's dangled out there (and it's been dangling for a while now).  So they're going to keep their (remaining) powder dry until (a) the global economy improves and (b) a new Congress takes over in 2011 that will probably be more, umm, "budget-conscious" and will very, very likely be without one of "King Cotton's" biggest champions - Senate Agriculture Committee Chair Blanche Lincoln (D-AR), whose chances of getting re-elected in 2010 are currently hovering between slim and none.  So the Brazilians' move last week might not reflect pie-in-the-sky idealism, but instead some good ol' fashioned DC cynicism.

But regardless of Brazil's motivations, one thing is very clear here: the US government's unwillingness to reform its insane, illegal agricultural subsidy programs means that, for the foreseeable future, American taxpayers will be forced to not only throw billions of their hard-earned dollars at American agribusiness, but also dish out millions in bribes to Brazil's cotton farmers.

Is it any wonder why a clear majority of the American people have finally had enough?

* "Great" may or may not actually mean "crappy."

No comments: