Putting Rocks in Your Harbour

Reactionary protectionism is akin to saying that because I have put rocks in my harbour, you will put rocks in your own. This is essentially what Brazil has said. There's nothing legitimate or beneficial to Americans in general about the US government subsidizing American cotton farmers (though the cotton farmers like it of course), but this helps not hinders Brazilians. If American taxpayers want to be so generous as to pay to produce the cotton that Brazilians buy, why should they object? Why anything but rejoice at their good fortune?

Brazilian cotton farmers, of course, may be unable to compete with the government subsidized American farmers. Placing a tax on the American goods that Brazilians buy, making life more expensive for Brazilians, is not the answer. Brazilian cotton farmers will not be happy, but ultimately it benefits Brazil for it to have a cheaper source of cotton and for the labour and resources previously dedicated to cotton production to be freed, now able to be employed for more productive purposes.

3 Comments:

Wolfman said...

Fascinating, but, inevitably I lose interest. Brazil wants things to be 'fair.' The World Trade Organization wants things to be 'just.' The Cotton subsidy is 'illegal.' Life's not Fair, Brazil. I am a farmer myself, and watched as NAFTA dismantled our nations ability to collect tariffs. I personally don't care if Brazil taxes the crap out of our cotton, as it can only tax what is going IN to Brazil. Go ahead, take your toys and go home. I'd personally like to see more American products being used in America, rather than selling our cotton to Brazil and subsequently buying all our clothing from Cambodia...

Mark Wadsworth said...

Exactly. US subsidies must be a net benefit, however small, to any country that buys US cotton.

DirtCrashr said...

After this monstrous Healthcare Bill and out-of-control spending, can we afford to contuinue the subsidy?
If they don't like the cotton support, I wonder what the Brazilians think of our sugar-subsidies?