Tuesday, November 26, 2002

Instapundit points out some good news on trade .

The US will on Tuesday unveil a bold proposal to eliminate tariffs on manufactured goods, calling for countries in the World Trade Organisation to sweep away all duties no later than 2015. . . .

This is indeed good news. And the benefits are potentially large. But this is the easy stuff. The ideological war on free trade for industrial goods has been won, and it is a matter of wiping out a few relatively small but occasionally powerful vested interests. This is almost entirely a rich world thing, and the beneficiaries of this are largely in the rich world. (The poor world will benefit for this, but less so. There is a mention of clothing (which hopefully means textiles in all forms - not just finished clothing) in the article, which is good, however).

Jowever, the important battle at this point is on agricultural goods, and they are not mentioned anywhere in the article, probably because both the US and Europe have been moving backwards lately. The simplest thing is that the rich world could do to improve the lot of the poor world would be to abolish all agricultural subsidies and create a completely free market in food and other agricultural products. The benefits of this would be immense, and almost immediate. However, the ideological case for this one has not been won. Huge bodies of western opinion are convinced that agricultural subsidies and protection are a good thing, and our governments are both too stupid and too in hock to vested interests to make the case for free markets. And as I was arguing yesterday, the enviro-green movement aids and abets the protectionists. I rant about this subject a lot, but it is unbelievably important.

Update: Brink Lindsey has some thoughts on the subject, essentially that is is a statement of good intent from the Bush Administration, and that we should be pleased. However, the US textiles industry will fight hard against it, and this is not nearly as good as it sounds if such things as anti-dumping laws remain in place.

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