Download As Accusations Fly, Poor Nations Suffer

As Accusations Fly, Poor Nations Suffer
By Clyde Prestowitz
The Washington Post
Sunday, June 8, 2003; Page B02
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Why do you see the speck in your brother's eye, but do not notice the log in your own eye?
Matthew 7:3
In the wake of Sept. 11 and the bitter international debate over the war in Iraq, Americans wondering
why much of the world sees the United States as a kind of rogue nation have cited foreign envy of
U.S. success and foreign hatred of American freedom. While these might be factors, what irks
foreigners most is not our values or our achievements. Rather it is the fact that what we do is often at
odds with what we preach.
Take President Bush's recent Coast Guard Academy commencement address. In it, he charged that
the refusal of the European Union to certify imports of new U.S. strains of genetically modified crops
had perpetuated famine in Africa. He alleged that the EU had a moratorium on such crops, thus
discouraging African nations from adopting, and benefiting, from them. The speech followed the
filing of a formal U.S. complaint on the matter with the World Trade Organization (WTO).
While there is no doubt that EU agriculture policies badly need reform, one of the main causes of
hunger and poverty in Africa lies much closer to home -- U.S. subsidies for our own farmers.
Cotton is a prime example. In the West African countries of the Niger River's northern delta, cotton is
the main cash crop, and cotton farming provides employment to more than 2 million people and
sustenance to several times that number. But with world cotton prices down 10 percent from last
year's 30-year low, people can barely survive. Extended families of 20 to 30 are trying to live on
annual earnings of less than $2,000. Schooling and even minimal health care have become
unaffordable luxuries. As a result, many families are leaving for the crowded Muslim quarters of
Europe's large cities while fundamentalist Islamic clerics from the Middle East are coming to West
Africa and finding more and more listeners. Fearing this trend, the United States has begun to
promote aid and open trade. In Mali, for example, it now spends about $40 million a year on
educational, health and development programs. But this doesn't come close to offsetting the twothirds drop in cotton prices since 1995.
Meanwhile, half a world away in the Mississippi Delta, American growers are thriving. At first
glance, the reason seems obvious. In Mali, farmers hitch their one-bladed plows to oxen and take two
weeks to till 10- to 20-acre plots from which the cotton is eventually picked by hand. In contrast, the
Mississippi Delta growers tend giant spreads of 10,000 acres or more in air-conditioned tractors using
global positioning satellite systems to determine the proper amount of fertilizer to apply to sprouting
seedlings. No wonder U.S. cotton growers have an average net household worth of nearly $1 million.
Sad though it may be, it would seem that oxen and plows on tiny plots are just no match for tractors
and satellite systems on huge spreads.
In fact, however, the U.S. growers are the higher-cost producers. All that high-tech equipment is
expensive. Delta land is irrigated, and the seed is priced at a premium because it is genetically
modified to resist pests. Then there are expensive fertilizers and defoliants. In all, it costs 82 cents to
produce a pound of cotton in Mississippi versus only 23 cents a pound in Mali. So why are the
Americans expanding their acreage while the Malians fight to survive? In a word: subsidies. A few
days before the oxen were roped to plows in Mali last year, Bush signed into law a piece of
legislation that greatly increased last year's $3.4 billion in subsidies to America's 25,000 cotton
farmers. This year, some of these farm families can expect to receive nearly $1 million just in
subsidies. Thus, the U.S. government is subsidizing American farmers to produce more and more
cotton that will further depress world prices and further impoverish families in West Africa -precisely what the president accused the Europeans of doing.
African cotton farmers aren't the only victims of U.S. agricultural policies. The North American Free
Trade Agreement (NAFTA) was signed in an effort to stimulate Mexican economic growth and
thereby stem illegal immigration. But exports for one of Mexico's main crops, sugar, are severely
restricted by U.S. quotas that limit imports from Mexico to only 7,258 metric tons of raw sugar. Thus,
while American consumers pay four times the world price for their sugar, Mexican sugar farmers,
like West African cotton growers, face penury and hunger. At the same time, heavily subsidized U.S.
corn exports threaten to drive Mexican campesinos off their land and into the dangerously hot trucks
of the smugglers who ship illegal immigrants across the U.S. border. The case of Brazil provides
further examples. The largest country in Latin America, Brazil has been struggling to achieve
economic growth and to overcome the legacy of mismanagement left by authoritarian governments. It
has democratized, liberalized, deregulated, and adopted prudent economic and monetary policies in
accord with Washington's demands. The United States has a big stake in Brazil's eventual success and
has been proposing to help by including Brazil in negotiations for a Free Trade Area of the Americas.
At the same time, however, U.S. agricultural subsidies and quotas on imports of citrus fruits restrict
trade in about two-thirds of the products Brazil might be able to sell in the U.S. market.
Then there is the issue of implementing international trade rules. In the formal complaint it just filed,
the United States is asking the WTO to impose penalties on the EU for maintaining the alleged
moratorium on import permits for genetically modified crops in violation of WTO rules. While the
U.S. charges are legally correct and justified, Europeans marvel at the chutzpah that allows the
United States to file WTO complaints while failing to implement WTO rulings against objectionable
American practices. For example, the United States has long had a program allowing special tax
treatment on profits from certain kinds of exports. In response to EU complaints, the WTO has twice
found this treatment in violation of WTO rules and directed the United States to alter the practice.
Yet, to date, the practice has not been changed. Europeans find this particularly maddening because
they are making efforts to fix their moratorium problem. Indeed, EU Trade Commissioner Pascal
Lamy told me in a recent meeting that new import permits will probably be issued by year's end. Yet
Europeans see little reciprocation on the U.S. side.
Mexicans also scratch their heads in response to U.S. complaints about the Europeans. Under
NAFTA, Mexican truckers were supposed to be able to drive freely anywhere in the United States.
But after 10 years, they still are prevented from doing so. The NAFTA dispute settlement panel has
found the United States in breach of its obligations under the treaty and has urged it to come into
compliance. Instead, fears (whether rational or not) in border states of unsafe or inadequately
inspected Mexican vehicles have caused U.S. authorities to drag their feet in a European-like shuffle.
It is these sorts of American inconsistencies and double standards, far more than envy of our success
or hatred of our freedoms, that cause alienation from America and that make the United States appear
to many abroad as a rogue nation.
Clyde Prestowitz was counselor to the secretary of Commerce in the Reagan administration. His
book "Rogue Nation: American Unilateralism and the Failure of Good Intentions" has just been
published by Basic Books.