Monday, March 8, 2010

USA Cotton Subsidies Provokes Brazil

Here again USA policies provoke retaliation.  I am against retaliation, but I understand it.  USA # 1 export is agriculture items, but most of it is highly subsidized which means we sell it for less than it costs to grow it overseas.  Brazilian cotton growers are tired of fighting this, so their government is retaliating.  Brazil ought  to buy the cheap stuff and distribute in Brazil allowing cotton fields to go fallow, until USA cries uncle at the economic loss.  Of course matters are more complex than that.  If Brazil allowed free trade, like say Hong Kong, this would work.  But when parts of the economy are managed, the whole edifice creaks if any part is challenged.


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