We can subsidize exports, which serves to maintain higher prices in USA, but at the same time we are less competitive in the export markets. People manage their businesses based on market realities. With no subsidies, a new set of market realities would manifest, and businesses would adjust accordingly. USA's advantage in agriculture is buried under subsidies, regulations and market distortions.
Chinese agricultural exports began to surge after 1999, with shipments increasing in value from $10.3 billion in 1999 to an estimated $28 billion in 2010. This $18 billion increase is impressive, but as global agricultural trade was also on the rise over this period, perhaps more important was the increase in market share. Chinese exports accounted for 4.5 percent of global agricultural trade in 1999, but climbed to 5 percent in 2009. Meanwhile, over the same period, U.S. export share fell from 22 percent to 18 percent. Although other exporters, particularly Brazil and Argentina, played a larger role in the fall of U.S. share, the growth of Chinese exports likely contributed to the drop, particularly in certain markets for consumer-oriented HVPs.
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| http://www.fas.usda.gov/info/IATR/China_Export_020311.asp Feel free to forward this by email to three of your friends. |
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