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6.13.2007

FARM SUBSIDIES: NOW IT'S CANADA WHO'S COMPLAINING



Previous posts in this site quoted Brazil's, India's and The Philippine's strong opposition to US farm subsidies. At present, Canada has joined the fray by asking the World Trade Organization to act and press the US in regard to the issue of farm subsidies.
"The debate over farm support is sensitive in both Canada and the US and neither is without sin in this regard. The supports and subsidies are designed to protect both the export potential for this sector and to preserve the rural communities that are so important to both nations. The Canadian position has been that US supports have blocked a great deal of legitimate trade in corn, wheat and other staples and they are fearful that their own export potential is being compromised."
For the US, farm subsidies preserve its important rural communities. However, what I cannot understand is the irony of the US posing as the poster boy of free trade while heavily subsiding its local industries not only to protect it against cheap and better imports but to also enhance its export competitiveness.

Isn't that dumping? In my simple mind, dumping is pricing an export item below its normal level of profitability. The intention is to bankrupt other countries local economy in order to monopolize the supply of a particular product.

Related Posts:

DOHA round. GMA. Shinzo Abe. Comfort Women.

Notes on the upcoming trade talks

DOHA Round Updates & Preferential Tariffs in Practice.

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