Monday, January 03, 2005

Iowa Can't Grow Pineapples

The Des Moines Register ran a report yesterday about a group of Iowa farmers who visited Central America recently. The farmers used the trip to speak out against free-trade agreements, saying—get this—free trade will hurt these farmers because they’ll be swamped with cheap American crops.

There’s so many things wrong with that, let’s take a breath so we can address them one by one.

Let’s start with the little bit of sanity in the piece. Dean Kleckner, chairman of Truth About Trade and Technology, rightly pointed out that the US and Central America don’t grow the same things. Simple geography reminds us that Iowa climate and Panama climate are very different. Bananas don’t grow well in the Midwest—it’s too damn cold.

Even for the crops both regions are producing (which are few and far between), it’s a good sign if these people are rendered unemployed. If one economy sacrifices less than another economy to make the same thing, then the first economy should make that thing and the other economy should do something else. Specialization, discovered through comparative advantage, explains why trade is beneficial for economies in general.

For some American farmers, that’s clearly little comfort. For them I propose the following: if you want to secure the livelihoods of your Central American colleagues, then why not refuse the billions of dollars of farm subsidies the US government sends you every year? After all, it’s this politically awarded revenue that makes it impossible for the poor Central American farmers to compete with their American counterparts. Why go through the effort to stop free trade…it’s so much easier to refuse the money.

Yeah, somehow I thought that would shut you up.

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