Trading up

0 Comments | Gazette, The (Colorado Springs), Jul 31, 2006

One of the best things about living in the United States is that consumers can walk into stores and find food products and manufactured goods from all over the world. The things we buy make each American a United Nations of consumerism. Our clothes come from many countries around the world, our automobiles might be made in nations that had few exports only a generation ago and our refrigerators are packed with fresh produce from the southern hemisphere in the middle of winter. This is all possible thanks to international trade.

Globalism got a bad rap during the 2004 presidential campaign as Democrats attempted to pin the sluggish economy on the Bush administration's lack of response to the outsourcing of so-called American jobs to other nations. Although thousands of jobs that used to be done in this nation are now being done overseas, the problem isn't as bad as partisan operatives would have us believe, and in any case, the consumer is the ultimate beneficiary. That's the idea behind free and open trade with other nations. With that in mind, the collapse last week of the most recent talks in what is called the Doha Round of trade negotiations was bad news for consumers and producers around the world.

The Doha Round of talks is named for Doha, Qatar, where these negotiations began in 2001. The talks are intended to increase international trade, especially between industrialized nations and emerging economies. Key to such openness is reducing, or doing away with entirely, tariffs, duties and other restrictions to the free flow of goods across borders. Theoretically, in trade negotiations, each nation seeks the best deal for their producers and consumers. The reality is that most negotiators are more concerned with protecting their manufacturing and agriculture bases than they are in opening their markets. That's what derailed the talks in Geneva last week.

Developing nations accused the United States, the European Union and Japan of clinging to agricultural subsidies to protect their farmers at the expense of growers in the Third World. Such subsidies artificially lower the price of food products and make it nearly impossible for farmers in developing countries to compete. If you think those farmers are small potatoes, think again. A bloc of those nations in the Doha negotiations is led by the so-called G4 nations - - China, India, Brazil and South Africa. Between them, G4 nations have 72 percent of the world's farmers and account for approximately 2/3 of global agricultural output, according to some sources. They are a force to be reckoned with in international negotiations. And on the subject of subsidies, they're right.

Subsidies are a stealthy transfer of buying power from taxpayers to producers. The largest portion of farm subsidies don't go to small, family farms, but to agricultural giants such as Archer Daniels Midland.

Farm subsidies distort global markets by artificially lowering the price of agricultural exports. Those lower prices make it more difficult for farmers in nations whose taxpayers don't pay part of the production costs to compete in the global marketplace. That stifles their economic growth.

In addition to retarding emerging economies, subsidies and protectionist tariffs tarnish our name in those countries. The U.S. is often seen as an economic bully that uses its massive buying power to force its will on smaller nations. That doesn't exactly endear us to the people in those countries.

The Bush administration would do well to lower trade barriers and end subsidies that distort global markets. Those would be good first steps toward increasing trade and making friends around the world. And both would be good for American consumers.

These days, trains rob people

Depending on who you listen to, the Winchester rifle or the Colt revolver is "the gun that won the West." Although both played a major role in taming our wild and wooly frontier, any history of the West wouldn't be complete without acknowledging the role played by the railroads in moving people and goods. Before interstate highways and relatively inexpensive airline tickets, trains were the lifeline of the nation. Railroads have a special place in the hearts of many people in this country, so it's not surprising that many people, especially in Washington, are willing to continue to shovel money at Amtrak, the nation's passenger rail service. In a reverse of the story line of many Western movies, now trains are robbing people.

When Amtrak was formed by Congress more than 30 years ago, the plan was for it to become independent of operating subsidies by the end of 2002. Nearly four years after that date, the goal is as elusive as peace in the Middle East. Rather than becoming independent, Amtrak continues to pick taxpayers' pockets to the tune of $1.4 billion in the next fiscal year, under a transportation bill approved in the Senate Appropriations Committee on July 20. That's $500 million more than this year's subsidy.

Rather than continue to pour money down the seemingly bottomless pit that is Amtrak, we'd prefer to see the feds divest themselves of this white elephant on rails. It's not that we have anything against train travel, but we don't see how it's the business of the federal government to run a passenger rail system. A better idea would be to spin off regional rail lines that could be self-sufficient and more responsive to the needs of the populations they serve. If any government subsidies were still required, they could be approved by local taxpayers in the areas served. Those folks are better equipped to know how necessary passenger rail service is in their areas. It's time to derail Amtrak's annual raids on the federal Treasury.