Free trade thoughts

Just read an article in America by Cesar Ferrari, a former managing director of the Bank of Peru, regarding the unfair agricultural trade practices of the US and EU. The farm boy side of me doesn’t agree with all of his remarks, nor does the MBA side. But he does have some good points about free trade and economic justice.

His central argument is that since most of the workforce in Latin American countries is on small, family farms then being able to trade farm products in a free/fair market would bring great benefits to those working poor. And the US farm subsidies get in the way by creating unfair competition. He has a statistic that says 10% of the US farms account for 70% of the production. And those 10% of the farms receive nearly two-thirds of all the subsidies. Big corporate farms and their political lobbyists make sure the subsidies continue. The total farm subsidy for all the OECD (Organization for Economic Cooperation & Development) countries is $300 billion per year. That’s 3.5 times the Colombian GDP, and six times the Peruvian GDP.

I don’t see any need for large corporate farms to get subsidies. That truly is unfair. I’m not sure if farmers should get price/production subsidies at all, and I'm not sure they work well anyway. The farmers I knew would have rather had changes in property tax and inheritance tax laws. When you have to farm a few thousand acres to get by, that adds up to a lot of property tax. And when passing it on to your kids you can get stuck for a hefty inheritance tax. Do farmers in developing countries have property and inheritance taxes?

US farms are incredibly productive, probably much more so than those in developing nations. Do we want to create an incentive for farmers in developing nations to cut down the forest around them and enlarge their farms? That’s what we did in much of the US, generations ago. By making farm exports the central force of an economy, it’s natural that the total farmed acreage will grow, creating the drive to convert native habitats into tillable fields. Is that good environmental stewardship?

This discussion on free trade in agriculture reminds me of free trade in professional services – i.e. offshore labor. We complain about professional jobs in the US being moved to cheaper locations in India and China. There are cries for legislation to prevent the outsourcing of US jobs. Essentially, some people want to create barriers to free trade in outsourcing US jobs, and others talk about eliminating those barriers for agricultural products. I suppose it all gets decided by the group that has the strongest political lobbyist.

Social justice is a tricky thing. What’s good for one group might not be good for another. Free trade may have environmental consequences. Christians are called to promote & practice social justice for all, not only for ourselves; and we are called to be good stewards of God’s creation. 'Living the gospel' requires us to do both.

Comments

[jcecil3]

Greetings Steve.

These are good thoughts. I think you raise the right questions. Social justice is complicated, especially in a global economy.

The problem with the tax reduction solution is that we're talking some major funding of federal programs. On the other hand, maybe if the taxes were lower, the loss of revenue could be offset by reducing or eliminating the subsidies.

Yet, you also rightly raise the issue of what fair trade would do to the environment in developing nations. Consider this though....I read somewhere that there are actually more trees int he United States today than in colonial times. Apparently, trees survive better when we cut some of them down. Left to nature, they grow too close togetehr and choke each other.

Peace!

[Steve Bogner]

I bet that the money saved by eliminating subsidies for corporate farms would offset inheritance & property taxes for family farmers. I saw somewhere that 'death taxes' in total are about 1.5% of government receipts, so reducing them for farmers would be only a portion of a (relatively) small number anyway.

But anyway, even if some politician did champion this sort of tax change, it would likely get really mangled on its way through Congress. And a lot of these taxes are at a state level too, so multiply that by 50...

[Karen Haluza]

I think a lot about social justice. It's so difficult know what to do. As you note, the unintended consequences of a seemingly beneveolent policy change can create chaos.

[Jim]

"Christians are called to promote & practice social justice for all, not only for ourselves; and we are called to be good stewards of God’s creation. 'Living the gospel' requires us to do both.".....While I'm not so sure that there isn't some truth to what you say here, Steve, I'm not so sure that I agree. It's an area where I think the Church often tends to think its mission lies, but I fail to grasp it from the Scripture. We are, I think, to be the "leaven within the loaf", the "rose within the garden". When we attempt to "politicize" the issue, it gets lost in the muck. In other words, I believe in prayer, not a "christian" lobby...........

[Steve Bogner]

Hi Jim - I've always seen social justice as a very scriptural thing. Jesus told us to love each other, and he was constantly acting in ways that stressed the importance human dignity. If we follow that example, then we have to be concerned with the welfare of others. And stewardship of God's creation started with the story of creation in Genesis. I'm no scripture scholar, but I think there are a few scriptures to back this up.

The acts of caring for others and for the environment are, I believe, part of the Christian mission. And those acts will sometimes put us at odds with government policies. In my opinion, living as a Christian in the world means we are inextricably involved in politics.

[Jim]

Many, if not most, believe as you do, Steve. It could well be me who is astray in his thinking. I do know that God can put burdens on our heart and send us anywhere. The important thing is keeping His voice "centered" in our life as we follow what we believe. Peace, my friend; and congrats on the win over Louisville..........

[Tapart News Advocate]

Pope Leo stressed human dignity and social justice in Rerum Novarum. It implied workers had a right to come together as an unit to negotiate their workday. In recent years, the essence of Rerum Novarum was diluted with a change regarding human dignity in the workday. Free Trade caused this dilution by a new interpretation of trade to include the
moving of factories, production and now outsourcing jobs to the cheapest labor markets of the world. The geopolitical balance was upset. Local value added economies from raw product to retail were attacked. The economic systems that provided a good living for families was lost. The USA went through the most massive dislocation of jobs in its history. In the past it was the shop foremen who took the young off the streets and taught them a skill. In turn the young made enough money to get married, raise a family and buy a home. Today millions find this impossible to do. An uncontrolled free market expanded outside the control of the workers. Now international organizations like the WTO and the World Banks control the workday without the consent of the workers involved. The workers have lost their voice in their destinies.
Prior to Globalism and Free Trade, local value added economies were promoted and the aim was to duplicate the process across the world. Instead, workers became the real commodities in this so called Free Trade. The workers are put on a world trading block to compete with the lowest common denominators down to wage slave labor and even child labor. The working poor class was created in the USA who find it more and more difficult to even afford the cheaper imports. At the same time the destitute workers outside the USA can not afford to buy the very things they make let alone have anything left over to buy anything the USA may have left to sell. And now Globalism as the extension of Free Trade is breeding wars and terror.
See Tapart News and Art that Talks at
http://yestpart.bizland.com/taparnews
featuring The Cross 9/11 Tangle of Terror art by Ray Tapajna asking who will now untangle the terror Globalism and Free Trade have bred.
Read story and view the American Dream is Burning at http://tapsnewstory.filetap.com or http://arklineart.fotopages.com displaying all the thought provoking topical art and editorial cartoons by Ray Tapajna. At Tapart News see excellent essay America in Terror by Chuck Harder. And note the Clinton Years - The American Dream Reversed artwork.