May 28, 2010
Let me submit to you a situation, and you can think about whether it is real or something that I just dreamed up.
As I’m sure you are aware, the U.S. is a member of the World Trade Organization and as such is required to live by certain trading rules. The WTO has found that our Cotton Program subsidies are in violation of those rules. We lost our last appeal to the WTO and now our punishment is to see tariffs imposed on $1 billion worth of products that we sell to Brazil. Products including autos, wheat, fruits, electronics, and on and on. This is not a pretty picture.
So, the Obama Administration sits down with Brazil to negotiate a solution. And we offer to give the Brazilian cotton farmers $147 million. Yes, the U.S. taxpayers have agreed to pay the Brazilian cotton farmers $147 million.
That means you and I are bribing the Brazilian government to not impose their tariffs.
Now, I said in the beginning that I might be just making this up, but I’m not. It is true. And to add one more point, the Brazilian government is only willing to postpone their sanctions for 60 days while they decide if our bribe is adequate.
Here is what I say – if our Cotton Program is out of compliance with the WTO, fix it.
Senator Lugar of Indiana has it right. He is prepared to introduce legislation to fix the problem. I don’t think we will fix it. We just throw money at everything as if we had a lot of extra cash. Of course, silly me, I should have realized this is an election year. Cutting cotton subsidies would be politically painful. All the Congress and the administration want to do is spend money.
Ducking our trade responsibilities is not new. We don’t allow Mexican trucks to haul cargo into the U.S., even though the North American Free Trade Agreement gives them that right. Now, we suffer trade retaliation from Mexico because we can’t follow the rules. Maybe we can figure a way to bribe Mexico also.
In closing, I would encourage you to access my Web site, which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
Until next week, I am John Block in Washington.