Trade and Development Blog

Chapter 10 of the book analyzes agricultural trade subsidies.  In general trade agreements under the WTO do not raise as many objections to production subsidies as they do to export subsidies (why?).  So which is this?  From today's Financial TImes  The US pumps out a record 37m gallons of ethanol a day, easily surpassing rival Brazil’s sugar-based industry in output. Producers are running out of places to put this ethanol. The US government mandates 12bn gallons in the fuel supply this year, but a decline in American driving and a 10 per cent cap on how much can be blended into motor fuel has created a glut. “The domestic market here in the US is essentially saturated. We are looking for a home for the surplus,” says Geoff Cooper at the Renewable Fuels Association, a US trade group. That home is increasingly abroad. US ethanol exports are more than double those of a year ago, totalling 251m gallons in the nine months through September, government trade data show. ...

NPR's Planet Money  has posted a great new audible podcast and blog entry on The Cotton Wars  about US subsidies to Cotton farmers.   It's a journalistic investigation and a great introduction to the political economy of the issues and how trade agreements and WTO enforcement (or lack thereof) occurs in practice. The narrative follows the history behind a number of recent successful complaints that Brazil (a major cotton producer in their own right) has filed against and appeals to the World Trade Organization claiming that the United States is violating it's own previous trade treaty commitments because of the ways it implements these subsidies. Colorful characters on both sides of the debate are interviewed.  We will spend a considerable amount of time looking at the topic of Agricultural Export Subsidies, which is one of the main topics in Chapter 10 of the textbook. International organizations such as Oxfam claim  that US cotton subsidies do mo...