Sunday, April 18, 2010

You can't make this stuff up

The federal government gives about $3 billion in subsidies to the 20,000 American cotton farmers each year. This subsidy hurts cotton farmers in other places like Brazil, so the Brazilian cotton farmers sued on the grounds that American cotton subsidies violate some sort of trade agreement. The WTO upheld the challenge.

So, what should the U.S. government do? The obvious answer is to stop subsidizing U.S. cotton farmers. But that's not the course of action that our beloved government has chosen. Instead, the U.S. government will subsidize Brazilian cotton growers in addition to American cotton growers.

The U.S. negotiators did agree to modify the complicated export-guarantee program to make it less of an export-subsidy program. They also agreed to ease restrictions on Brazilian beef that have been justified as an effort to protect Americans from foot-and-mouth disease — and criticized as an effort to protect U.S. cattlemen from competition. But the big-ticket item is the settlement's "technical assistance" fund of $147.3 million, prorated, for Brazilian cotton growers. That just happens to be the precise amount of the retaliation the WTO had approved for the improper cotton subsidies. According to the U.S. press release, the fund will be replenished every year "until passage of the next farm bill or a mutually agreed solution to the cotton dispute is reached." So the total cost will exceed the price tag of the infamous Alaskan bridge to nowhere, which was at least designed for Alaskans; the annual cost will far exceed the $100 million President Obama ordered his Cabinet to cut from the federal budget last year. [Emphasis mine]


PZGURU said...

I wish I could say I'm surprised, but this is just par for the course. Simply unbelievable. And what happens now when every other country sues the US? Why don't we sue other countries over what products they subsidize? The US is doomed if we continue on the path we are on, and continue to allow other countries, or these bogus "world courts" to interfere in our affairs.

Anonymous said...

What about cars? Other countries heavily subsidize their car costs.

Freemarket said...

So do we. GM ain't called 'Government Motors' for nothing.