Thursday, November 10, 2005
Farm Issues Bust Trade Talks
The hope of a global trade pack this year collapsed due to the refusal of the Europeans to significantly lower tariffs on farm products. Since poor countries are excluded from agricultural markets in rich countries, they are not willing to let in the excess banks, insurance and lawyers from rich countries.
The French are the primary culprits in this lose-lose situation, as they use a different means to much the same end as does the US. France collects taxes on imported food, raising the cost of the products in that country. This raises the income of farmers. The receipt of the tariffs lowers the taxes that would otherwise be required in France. At the same time, since lower income people spend a greater portion of their income on food than do the rich, a lower percentage of the overall tax burden is borne by the rich. In the US we do this by direct payments to farmers and cutting taxes on the rich. So while we are all trying to accomplish the same thing, the French approach is much more obvious to poor countries and causes trouble. Au Contraire, it is less obvious to the poor people in France, confining rioting to other causes.
It is hard for us to understand why the French are so bull headed about doing things our way. Why just on Tuesday the Bush administration succeed in pressuring China to limit its clothing exports to the US. C'est la vie'
The French are the primary culprits in this lose-lose situation, as they use a different means to much the same end as does the US. France collects taxes on imported food, raising the cost of the products in that country. This raises the income of farmers. The receipt of the tariffs lowers the taxes that would otherwise be required in France. At the same time, since lower income people spend a greater portion of their income on food than do the rich, a lower percentage of the overall tax burden is borne by the rich. In the US we do this by direct payments to farmers and cutting taxes on the rich. So while we are all trying to accomplish the same thing, the French approach is much more obvious to poor countries and causes trouble. Au Contraire, it is less obvious to the poor people in France, confining rioting to other causes.
It is hard for us to understand why the French are so bull headed about doing things our way. Why just on Tuesday the Bush administration succeed in pressuring China to limit its clothing exports to the US. C'est la vie'
