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Buying into free trade

December 09, 2005

IT'S NOT EASY TO CONDUCT a phone survey. Not only does the typical respondent treat you like a telemarketer, you sometimes have to ask questions on obscure topics that many of the people you're interviewing haven't given much thought to -- such as agricultural subsidies.

Looking at the results of a recent survey of Europeans and Americans on agricultural trade, one can practically hear the head-scratching at the other end of the line. Although decisions on trade pacts made by the World Trade Organization next week in Hong Kong could have a dramatic effect on world prosperity, the topic is hardly at the top of the priority list for the media, most politicians or their constituents.

Those surveyed by the German Marshall Fund of the United States, a nonprofit group that seeks to boost understanding between Europe and the U.S., broadly support free trade -- yet at the same time, they clearly mistrust it. While 79% of Americans surveyed said freer trade helps boost prosperity, and the same percentage agreed that it makes the world more stable, 57% thought that it would cost jobs at home, and 58% favored protecting those jobs by raising tariffs. This betrays a misunderstanding of both the meaning of free trade and its benefits.

Fueling the perception of job losses is the fact that some people invariably lose when free-trade pacts are signed. And the farmer forced out of business by competitors from South America is more visible than the 10 other businesses created by a rising economy. Few economists or international development experts, however, doubt that the gains outweigh the losses. Reliable estimates show that the removal of tariffs, subsidies and other domestic supports would raise global economic output and income by hundreds of billions of dollars a year over the next decade or so. Most of that increase would occur in developed nations such as the United States.

On Sunday, Times staff writer Evelyn Iritani took a detailed look at how cuts in agricultural tariffs and subsidies around the world might affect farmers in California. Although California growers took in $5.3 billion in subsidies from 1995 to 2004, the money went to a small subset, many growing crops such as rice that require large amounts of water, fertilizer and land. More than 90% of California farmers receive little or no government assistance and would benefit from open markets in Europe and Asia. Further, even some subsidized rice growers said they would favor an end to the payments if it meant countries such as Japan would open their markets.

The Hong Kong meeting that starts Tuesday was supposed to be the culmination of the Doha round of trade talks, which started in 2001 with the goal of boosting Third World economies by cutting farm tariffs and subsidies. The United States has proposed some fairly aggressive reforms, but Europe is far behind, and few expect a major deal. That would be harmful not just for developing nations but for the people of the U.S. and the very European countries involved in negotiations. So it isn't just Americans who are unclear on the concept of free trade.

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