August 1, 2004  ·  Tim Wu

For the developing world, farm subsidies are slow-motion weapons of mass destruction. Yesterday’s WTO agreement is the first multilateral deal in a decade that pledges reductions. If it holds, much could change — but it could also mean new pressures for adherence to international IP laws.

In 1994 developing countries made a deal at the WTO. In exchange for TRIPS (the Trade Related Intellectual Property Agreement), they were supposed to get major reductions in agricultural and textile subsidies.

It was a bad deal. The world got TRIPS, but it didn’t get much of the agricultural reform that was promised. Europe, the United States, and Japan have mostly moved backward on agriculture since 1994. The average European cow lives on $2.50 a day subsidy when 3 billion people live under $2 a day. The average Japanese cow, meanwhile, lives on a healthy $7.50 a day, rather like a college student.

But yesterday’s deal is a new hope. It agrees most prominently to reductions in cotton subsidies. We in the U.S. pay out $4 billion a year to 25,000 cotton farmers who then produce $3 billion a year in cotton. That’s $160,000 per farmer — we’d save alot of money by just opening a federal amusment park that employs everyone in the cotton industry.

But the question remains: this time, will the U.S., Europe and Japan have the political will to make the reductions we have agreed to?

Here’s the actual agreement, heavy in trade lingo.

  • Michael

    This sounds very good for us Aussies. Less foreign government competition for our primary producers. Woo!

  • Ron

    I wish I could share your optimism. In fact, agricultural subsidies are necessary. Right now the US gives them to large grain corporations to dump US grains on Third World countries who have been forced to ‘open their markets’ by WTO, NAFTA and such. US, EU and Japan will never stop subsidizing their agriculture. And they shouldn’t. m What they need to do is subsidize their organic farmers and local markets instead of agribusiness and fast food. And Third World needs to reclaim their sovereignty and return to protecting their food system from subsidied First World dumping. WTO has nothing to offer. Brasil scored a goal by winning on the cotton issue in the WTO grievance prcoess, that’s why US was willing to give this apparent ‘concession’ in return for more IP. But it won’t last, we’ll find some other way of subsidizing cotton exporters (not the farmers, of course).

  • prasad

    An article at claims that US and European negotiators hoodwinked the third world in this latest agreement by setting the ceilings on their subsidies higher than what they are actually giving out today. I wish I could get serious analysis of these agreements that analyses such loopholes.

  • Keith

    Electric cars have been thought of as one anewsr to our dependence on fossil fuel burning vehicles. Their main appeal is that they produce no air pollution at the point of use so provide a way of shifting emissions to less polluted areas.Unfortunately also out of sight are the environmental consequences of manufacturing and recycling the lead- acid batteries electric vehicles require to run on.A recent report in Science (Lave et al, vol. 268, p 993. May 1995) drew attention to the problem of lead batteries in electric cars: Smelting and recycling the lead for these batteries will result in substantial releases of lead to the environment . The researchers compared the power, efficiency and environmental effects of electric cars with petrol powered vehicles. Not only are electric cars comparatively slower and far more restricted in the distance they can travel but release more lead into the environment as well.The study showed that an electric car with batteries made from newly mined lead releases 60 times more lead than that of a car using leaded petrol. (Their example uses the relatively high 2.1 g/gallon leaded petrol used in the US in 1972 and in some Australian states up to the 1990).Although the lead discharged in lead smelting and reprocessing is generally less available to humans in the U.S. than that dispersed by leaded petrol cars driving where people are living (only one percent of U.S. petrol sold is leaded) there are still significant hazards. Lead processing facilities release lead into the air and waterways, and lead in solid waste leaches slowly into the environment.Electric car by Alexander Claud aged 10.Clearly electric cars, despite their good for the environment image create far more of a problem than leaded petrol cars. In addition If a large number of electric cars are produced, the demand for lead for batteries will surge, requiring more lead to be mined. (ibid, p.995)Manufacture needs to be halted until an alternative safer power source is found. This rules out current alternatives such as nickel-cadmium and nickel metal hydride batteries which are also highly toxic and far more expensive. Researchers speculate that sodium-sulphur and lithium-polymer technologies may eventually be used.

  • Chanda

    US drivers aruabgly drive further BECAUSE the gasoline price is (compared to other similarly wealthy nations) so much cheaper. Living farther from a city center is, therefore, a trade-off between higher property taxes and smaller living area (and possibly higher local sales taxes) in a city and lower property taxes, larger living area, and increased car expenses outside of a city. In other words, the cost of operating a car while living outside of a city were offset to a large extent by the benefits of living outside the city, and (so long as costs related to car-ownership remain low) provide greater benefits than living inside a city.Of course, this is a bit of a chicken and egg story, too: developers drive urban sprawl, which can be rationalized by the greater benefits (as described above), greater movement to the burbs, an increased cost of living in the near suburbs and a decreased cost of living in the far suburbs (aka exurbs). All this, though, is predicated on the low relative cost of transportation vs. living centrally.Now, we are in a landscape that is a product of such policies. So, yes, many US drivers also have greater distances to travel . However, not looking at how we got to this point really misses an important lesson.

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