Lately, in my political science class, we have been discussing globalization and the WTO. Lately, we’ve been speaking about the barriers to trade that the WTO is working on bringing down, such as tariffs and subsidies. One note is that though they do speak out against American and European farm subsidies, and do some sanctioning against them, it’s generally not enough to get countries that can absorb the blow of the sanctions to stop doing this. Though I myself am a liberal politically, my fiscal policy tends towards neoliberal in most cases, and thus, I think of free trade as basically a good thing. My question is, “Should the WTO take further action against subsidies in first world countries.”
My answer would be yes, and the idea for possible sanctions would be to allow all countries to set tariffs to make up for the subsidies or make their own farmers competitive with the first world against all first world countries that subsidize their crops. I think that one of the biggest advantages the third world has in the free market is the lower cost of labor, and thus lower cost of their final products relative to those from the first world. Farm subsidies distort this, and allow first world countries to set their prices at below cost, prices that third world countries, which often can’t afford or are not allowed to set their own subsidies (due to the IMF) cannot compete with, which destroys local industry and further disrupts their trade. I think that even within the country, these subsidies can be a bad thing as they end up forcing consumers to pay for higher prices, and can often insulate companies from the free market. I also do not believe that the majority of these subsidies go to people whom would benefit most from the actual cash, instead going to rather larger corporations for whom it’s just further pork. I think the money would be much better spent (in my liberal opinion) on education, welfare, science grants, police forces, or public art projects, but even if the money was simply not taxed at all (which conservatives would probably prefer), it would be a large benefit all around.
So, what are the opinions of the GD crowd?