NY Times on free trade

The NY Times has another nice editorial on the dire consequences of protectionist policies for farmers in the developing world.

In a fully liberalized global marketplace, Mr. Duez knows that Europe would produce no sugar whatsoever. It would be far cheaper to import the sweetener from tropical climates that Europeans once colonized precisely because they were rich in things like sugar cane. Poor countries where sugar is one of the few crops capable of bringing in money on the international market would be deliriously happy if that occurred. But in a perverse reversal of traditional trade patterns, Europe ranks among the world's leading sugar exporters. To protect its sugar growers, the European Union mandates that farmers like Mr. Duez get paid 50 euros per ton of harvested sugar beets, or five times the world market price, up to an allotted quota. Mr. Duez runs a well-diversified farm, but the 1,600 tons of sugar beets he sells every year at an inflated price is by far his most profitable crop. [...]

Mr. Duez's good fortune, in other words, comes at the expense of farmers in countries like Mozambique, Brazil and Guatemala, who are being denied their chance to reap the benefits of globalization.

Of course, as the third world remains in poverty due at least partly to these subsidies, more foreign aid is proposed as the solution - another case of intervention creating the need for more intervention.

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