Good news and bad news

Good news from Baghdad and bad news from Hong Kong

Dateline 21 December 2005

Good news . . .

There have been several key steps forward in Iraq. The transfer of sovereignty last year; the first elections in January; the constitutional referendum in October; and now the new elections.

Sunni political parties boycotted the first elections and terrorists tried to disrupt them. This time Sunnis participated enthusiastically. Some seventy percent of Iraqi adults seem to have voted. That is much higher than a typical US Presidential election – only 49% in 2000, rising to nearer 60% in 2004. But Iraq’s election was not for a President, but for Parliament. In countries with both types of election presidential polls typically have a higher turnout than parliamentary. Seventy percent is around DOUBLE the turnout in America’s off year congressional elections. So let’s have no more talk about an ‘insurgency’ or the US losing the war.

More than 10 million Iraqis participated in the constitutional process. There are only a few thousand terrorists. The Coalition is winning, and polls show 70% of Iraqis are optimistic about the immediate future. George W Bush, Tony Blair, and Jacques Chirac would all kill for optimism like that.

. . . and bad news

Meanwhile, in Hong Kong, even more critical issues are being debated. Rich countries and poor countries are clashing again at the World Trade Organization. Such disagreements are frequent, which is odd, because all countries, rich and poor, would benefit from freer trade.

There are two traditional areas of disagreement. Rich countries want poorer countries to clamp down on the theft of intellectual property and poor countries want an end to rich country subsidies for farming areas. Both are right.

The key divide at this particular meeting is over agriculture. The most critical issue is the demand that rich countries end export subsidies. This is indeed the worst abuse. Export subsidies destroy farming in poor countries. And let’s remember, poverty in most of the world is not a matter of having a smaller TV than your neighbors – it is a matter of living or dying.

Rich countries too suffer from farming subsidies. Food is more expensive in America than it needs to be. And just as on the global level, expensive food hits low income Americans much harder than the wealthy.

A proper free market approach to agricultural trade would go much further than even that demanded by the militant Brazilian delegation. Rich countries should abandon not only export subsidies but also domestic price support mechanisms such as tariffs and ethanol subsidies.

Free trade in food and textiles is essential if poor countries are ever to become rich. Just as when America was settled with homesteads, ranches and plantations, poor countries need to be able to develop an economic base before they can industrialize. These are the first steps of development. By offering Africa, Asia and Latin America free trade in services and manufactured goods but not food or textiles we are offering them a ladder with the first two rungs sawn off. And it hurts consumers in the west too.

George W Bush tried to claim the moral high ground by offering the European Union a deal – America will abolish agricultural subsidies if Europe does. But he made the offer knowing full well that Europe would say no. Worse, in office he has actually increased subsidies, making things worse for America and poor world alike. America doesn’t need a deal from Europe or Japan and can unilaterally abandon farm subsidies.

Agricultural protection is a left over from the ideas of the eighteenth century. It is long past time we disowned them.

Copyright © Quentin Langley 21 December 2005

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