Author Archives: jdingel

Clinton's comments

Kim Elliott says that Hillary Clinton is alienating poor countries:

But in questioning the worth of reviving the Doha Round, as she did in an interview with the Financial Times, Clinton overreacts and comes across as isolationist and completely oblivious to the consequences for the poorer countries in the world. It is correct, as Clinton implies, that the economic benefits of Doha overall would be modest. The US market is already relatively open so the effects here would be small. But they could be important for some low-income countries that pay the highest tariffs remaining in the US schedule. Those tariffs, on less expensive clothing, footwear, and other products, are also regressive in their effects on US consumers, hitting the poorest at home the hardest. Perhaps most important, failure of the Doha Round could undermine support for the multilateral, rules-based system that is the only thing protecting smaller, poorer countries from predatory trade practices by the powerful.

Dan Drezner points out that Clinton isn’t making Peter Mandelson happy either.

Clinton's comments

Kim Elliott says that Hillary Clinton is alienating poor countries:

But in questioning the worth of reviving the Doha Round, as she did in an interview with the Financial Times, Clinton overreacts and comes across as isolationist and completely oblivious to the consequences for the poorer countries in the world. It is correct, as Clinton implies, that the economic benefits of Doha overall would be modest. The US market is already relatively open so the effects here would be small. But they could be important for some low-income countries that pay the highest tariffs remaining in the US schedule. Those tariffs, on less expensive clothing, footwear, and other products, are also regressive in their effects on US consumers, hitting the poorest at home the hardest. Perhaps most important, failure of the Doha Round could undermine support for the multilateral, rules-based system that is the only thing protecting smaller, poorer countries from predatory trade practices by the powerful.

Dan Drezner points out that Clinton isn’t making Peter Mandelson happy either.

Why are people desperate to defend NAFTA?

Inexplicably, Reason repeatedly prints bad arguments in defense of NAFTA. This time it’s the Chicago Tribune‘s Steve Chapman saying that NAFTA boosted workers’ earnings:

Ordinary workers, contrary to myth, benefited from NAFTA. In the decade before it took effect, according to the Bureau of Labor Statistics, average hourly earnings (adjusted for inflation) fell by 5 percent. In the decade after, they rose by 10 percent.

Nonsense. You’d have to control for other factors to make such a comparison meaningful. Such as 1990s labor productivity growth, which was “the defining economic event of the past decade” (pdf).

While Chapman’s piece does contain some respectable economic reasoning, the inclusion of such a glaringly bad argument undermines its credibility. Why are the folks at Reason so eager to defend NAFTA?

Romney defends US ag subsidies

Mitt Romney in a GOP debate, via Hit & Run:

We’re competing with European and Brazilian and other farmers, and we’re competing in a marketplace where they are heavily subsidized, at great disadvantage for our farmers. And so, if we’re going to change our support structure, we want to make sure that they change their support structure.

And we do this together, as opposed to unilaterally saying: We’re going to put our farmers in a tough position and have the farmers in the rest of the world continue to be subsidized.

Unfortunately for Mitt, European farm subsidies have been largely decoupled from production since 2003, so they aren’t triggering a surge in output or a flood of imports. Moreover, the European Union is due to reform its Common Agricultural Policy in 2008-09:

The European Commission unveiled plans Tuesday to shake up Europe’s farm subsidies in a bid to make costly hand-outs more relevant to the modern world as the sector enjoys the strongest boom in generations.

While past reforms have geared the European Union’s Common Agriculture Policy (CAP) towards reining in production, farmers are now struggling to keep up with surging demand fuelled by explosive growth in China and India.

Kicking off a six-month review of the CAP, the EU’s executive arm floated the idea of capping hand-outs to the biggest farms, phasing out milk quotas, scrapping rules on keeping land fallow and guaranteed minimum cereals prices.

Based on the findings of the review, the Commission is to come forward with reform proposals in May that would both modernise and simplify Europe’s support of its farms. [AFP]

So while Europeans seem to progress, US policy is getting worse. Moreover, I’ve never heard of Brazilian farmers receiving subsidies. Shame on Mr Romney for blaming others when the United States is the laggard.