The U.S., Europe, and Japan spend $300 billion a year to subsidize farmers. These subsidies, by distorting international markets, crush the cotton growers of Pakistan, the rice farmers of Indonesia, and millions of other people throughout the Third World. They destabilize some of the very nations the U.S. needs in the fight against Islamic fundamentalism and al Queda terrorism. That's why the recent World Trade Organization agreement that promises to curb export subsidies for agriculture is a very welcome step. Hats off to U.S. Trade Representative Robert B. Zoellick and European Union Trade Commissioner Pascal Lamy for restoring credibility to the principle of free trade and for giving the farmers of developing countries the break they deserve to participate fairly in the global economy.
Of course, the real work remains to be done. No date has yet been set for nations to remove their export subsidies. Countries are also supposed to start cutting their production subsidies, but no date has been set for that, either. The WTO has already ruled that the U.S. should cut its subsidies for cotton by 20%, and Washington says it will comply. But there are few details of further cuts on other agricultural products. In return for agreeing to cut subsidies, Zoellick won a pledge that American farmers would be granted greater access to high-tariff markets. That too remains to be seen.
The next round of trade talks will be the toughest. The French are already making noises that undermine the latest agreement. The Indians remain suspicious of U.S. intentions. And support for free trade in the U.S. isn't solid, especially among Democrats. But for the first time in decades, a more level playing field for agriculture appears possible.