Author Archive
The Hypocrisy of “Well-Fed Activists”
Speaking at a food security conference in Milan, Nestlé chairman Peter Brabeck-Letmathe today criticized “well-fed activists” whose protests and lobbying activities have, in his opinion, held back the adoption of food technologies that could help the starving poor:
It is disheartening to see how easily a group of well-intentioned and well-fed activists can decide about new technologies at the expense of those who are starving.
Nestlé has been subject to intense criticism in recent years, primarily over its strategies to sell infant formula in developing countries, but I think Mr. Brabeck-Letmathe is spot-on here.
Penn & Teller made a similar, if more forcefully put, point in the last few seconds of this excellent video (warning: language may be offensive to some).
The Odd Couple
Well, here’s an interesting pair. Today’s Washington Post contains an op-ed on climate change and trade, written jointly by Fred Bergsten, director of the Peterson Institute of International Economics, and Lori Wallach, director of Global Trade Watch at Public Citizen.
The authors readily admit, quite early in the piece, that they are usually on opposing sides of the trade debate. The Peterson Institute scholars are well-known and well-respected advocates of freer international trade. Global Trade Watch, and Wallach in particular? Not so much. She has called NAFTA a “disastrous experiment” and has a special section on her website calling on people to Take Action! on trade (example: by hosting a house party to celebrate the tenth anniversary of ” the historic 1999 Seattle protest victory of people power over corporate rule.”)
Yet here they are, claiming to agree on “a suprising number of aspects of the climate change debate and on the related need to overhaul global trade negotiations.” I am still trying to make sense of the op-ed, because it lurches around a bit, and to work out exactly how deep the agreement of these strange bedfellows really is. But for now, let me comment briefly on what I think is the main thrust of their op-ed: a proposal for launching a new round of trade talks.
The authors point out that a new treaty on global warming would “require new trade rules in intellectual property, services, government procurement and product standards.” So, hey, why not combine that into trade talks?The Obama Round (as if Obama-worship has not gone far enough) “would include, as a centerpiece, addressing these potential commercial and climate trade-offs and updating the negotiating agenda.”
That, quite frankly, would be fatal for the World Trade Organization. Developing countries, now in the majority in the WTO, are in general very resistant to the idea of bringing extraneous issues into its agenda (witness constant struggles over linking trade to labor and environment issues, to name just two). More to the point, we already have a round in progress. The Doha round has been struggling over old-fashioned trade concerns like tariffs and subsidies (remember them?) since launching in 2001. The risks of overburdening the WTO agenda are, in my opinion, far greater than the possible benefits. It’s fairly clear to me why Wallach would advocate a new round full of poison pills, but not so clear why Bergsten would put his name to such a suggestion.
Filed under: Energy and Environment; Trade and Immigration
More Trade News
My colleague Dan Griswold pointed out yesterday some unfortunate editing in the Washington Post. Here are a couple of other trade-related items in the news recently:
I think often the United States has to lead,” Baucus said, noting that what lawmakers come up could be used as a model for other countries to copy.
So the U.S. would saddle its consumers with higher prices in exchange for little benefit environmentally and in the process risk retaliation and alienating countries who it insists are necessary for global cooperation on climate change?
Some leadership.
And it may well be that the Chinese have the jump on the United States here, in any case. They’re proposing to introduce a carbon tax of their own, to prevent double-taxation in the form of carbon tariffs by the developed countries (banned under WTO rules) and to keep the carbon tax revenue — collected, remember, from U.S. consumers! — for themselves, all while seeming to play nice on climate change. I bet those who proposed carbon tariffs are sorry they spoke out now. (HT: Scott Lincicome)
Filed under: Energy and Environment; Trade and Immigration
Correction: The CoC Does Not Endorse Carbon Tariffs
Following on from my earlier post, I was delighted to receive a call from Bradley Peck at the U.S. Chamber of Commerce just now, clarifying that they do not in fact endorse the idea of carbon tariffs. Here’s a blog entry, posted a few minutes ago on the Chamber’s blog, clarifying their position.
Filed under: Energy and Environment; Trade and Immigration
Chamber of Commerce Endorses Carbon Tariffs?
Even though the climate change summit in Copenhagen next month is likely to yield very little, domestic shenanigans continue. The Senate Committee on Environment and Public Works passed a bill on Thursday amid controversy, and the farmers’ friends in the Senate (notably Sen. Debbie Stabenow, D. Mich) are looking to send goodies their way by filing an amendment that would pay farmers for not cutting down trees, not farming, and will likely see states such as — well, how about that! — Michigan “cashing in” (see here).
Meanwhile, those concerned about the cost of climate change regulations may have lost an ally. Often, but not always, one can depend on the U.S. Chamber of Commerce to defend free enterprise, or at least free trade. On climate change, however, they are a little more ambiguous. If anything, they appear to be getting more sympathetic to climate change legislation. Nothing to do with membership defections, they assure us, just good business practice. Maybe it is. I’m not a member of the Chamber so their strategy is not really any of my business.
What concerns me is the apparent shift in their position toward so-called carbon tariffs (also called “border adjustment measures,” and often spoken of in terms of “international competitiveness,” “negotiating leverage” and other terms that should raise the alarm). My friend, and former Catoite, Scott Lincicome does an excellent job here of parsing through the Chamber’s recent public letter in support of the Kerry-Graham “framework” (outlined in this New York Times op-ed) and their strange silence on the framework’s inclusion of the need for carbon tariffs, so I won’t repeat his analysis here. Suffice to say, their non-comment on the issue of carbon tariffs is worrying. As Scott points out, they appear to endorse the concept, if in a coded manner.
Back in June, the Chamber explicitly opposed Waxman-Markey, in part because “It would also impose carbon tariffs on goods imported into the U.S., a move that would almost certainly spur retaliation from global trading partners.” (See here.) I would feel a lot more comfortable if a similarly explicit statement had been repeated in their letter.
Filed under: Energy and Environment; Trade and Immigration
If At First You Don’t Succeed
Mexican sugar growers want “in” on the cozy little arrangement that domestic sugar growers have here in the United States. They have formed an alliance with the U.S sugar lobby to recommend that the U.S. and Mexican governments work to “avoid importing sugar from other countries to help boost the market between the neighbours” (full article here [$]).
This proposal is not new, of course, having previously been suggested to lawmakers’ during the 2008 farm bill debate (see here). The “recommendation” was rebuffed at that time, but these people are nothing if not tenacious.
In what surely must be a contender for the “Understatement of the Year” award, the article ends with this: ” Sweetener users and free trade advocates are likely to find the recommendations controversial”. Someone at CongressDaily has a sense of humor.
More Dairy Shenanigans — and It’s Not Over Yet
Dairy farmers were allocated $350 million in extra assistance recently (as if the billions we artificially funnel to them every year are not enough) because of plummeting prices. The assistance will come mostly in the form of cash, although the federal government will also buy more dairy products for nutrition programs, and at increased prices. (Not to be outdone, hog farmers are asking for the same.) An article from Wednesday’s edition of the Wall Street Journal Online has the details.
In a rare fit of candor, one dairy farmer group admits that the emergency money, and the decades-old programs, are not enough:
The National Family Farm Coalition, a Washington-based farm-advocacy group, is asking for an overhaul of the milk-pricing system, which is based on a complex Depression-era regime administered by the federal government.
So far I’m with them, but then they lose me with this:
The coalition supports an idea that would keep prices stable by creating an oversight entity to manage the amount of milk a farmer can produce.
“While we appreciate this money, it won’t be enough though to keep farms from going broke,” the coalition said in a statement.
Ah, milk quotas. Good idea. And we can learn from the Europeans about how to pull that trick off.
Seriously? We need a new “oversight entity” to actually “manage the amount of milk a farmer can produce”? Talk about fatal conceit. That’s fatal insanity to think that a centralized agency can manage milk production on a farm-level basis.
An Overdue Acknowledgement that Stuff Costs Money
The Institute of Medicine issued a report today calling on whole scale changes to the National School Lunch and National School Breakfast programs (although nowhere does it question why we even have national nutrition programs, which surely properly belong to the states and/or school districts. But I digress). The changes all sound sensible enough: setting calorie limits for meals, increasing the amount of whole grains, fruit and vegetables in school meals, and reducing fat and sodium.
But here’s the clincher: the recommendations would cost money!
The panel acknowledged that its recommendations would increase costs and called for a higher federal reimbursement to school districts, capital investments and money to train cafeteria workers to make the changes. Food costs for breakfasts could rise as much as 9%, and for lunches as much as 25%, if all the recommendations were enacted, the committee said. (source: LA Times)
We should be grateful that the authors at least acknowledge the budgetary impacts of their recommendations. So often it is assumed that school nutrition programs can and should be changed regardless of the costs to taxpayers. Last week I taped a television debate show called Two Way Street (the show is scheduled to air in January, so check your local listings!) with a woman called Ann Cooper, the “Renegade Lunch Lady” (here’s Ann’s website). Ann is on a mission to “change the way our children are eating”. Her intentions are good, and I certainly agree with her that our woeful agriculture policies are skewing incentives towards certain food groups and away from fruit and vegetables.
Having said that, Ann’s experience with school cafeterias was, from what I can gather, gained in East Hampton, NY and Berkeley, CA. Hardly representative samples of consumers across America (although she has reportedly worked in Harlem and New York City, also). So often “success” in these sorts of places is seen as a scalable blueprint for the rest of the country. Indeed, Ann used her time on the show to encourage viewers to contact their member of Congress and urge increased Federal funding for nutrition programs.
On the contrary, I would argue that people instead encourage their congresscritters to devolve their ill-gotten power over school nutrition programs back to the local school districts, where they can make the best assessment of the costs and benefits of different plans, given local needs and resources.
Filed under: Education and Child Policy; Health, Welfare & Entitlements
Your Choices Are Unacceptable
Through my work on agriculture, I get occasional media calls on obesity and the agri-industrial complex supposedly behind it. On Sunday, for example, I gave an interview on NPR about the USDA’s push for — and subsidisation of — farmers markets and “eating locally” as the solution to poor nutrition. (This a recurrent theme of the Obama administration: Michelle Obama has made people’s food habits her business, growing a White House Garden and driving in a convoy of 36 vehicles to the H Street farmers’ market in a photo-op to promote it. The USDA even has a “People’s Garden“.)
So an article in today’s New York Times caught my eye. According to a recent study, the push for calorie postings in restaurants has had no affect on people’s eating habits in certain low-income areas of New York City. People’s choices are, apparently, pretty impermeable to the information that nutrition and public health advocates assured us was the key to better choices.
You would be forgiven for thinking that was the end of the matter and we could go on eating what we like unharassed. Think again:
“I think it does show us that labels are not enough,” Brian Elbel, an assistant professor at the New York University School of Medicine and the lead author of the study, said in an interview.
I hope I’m not coming across as hyperbolic, but I find it difficult to believe that healthy eating advocates will be content to accept that people are making choices, unpalatable though they may be to the ”slow food” movement, based on the benefits and costs of the alternatives available to them. If people won’t voluntarily submit to the food police — even when information is available — then I suspect calls for regulation will soon follow.
(HT: Radley Balko)
Filed under: Health, Welfare & Entitlements; Regulatory Studies
A Novel Interpretation of “Green Tariffs”
Here’s a nice follow up to my blog post on Tuesday: firms importing solar panels to the United States face a $70 million bill because of unpaid duties.
It seems to me that a government truly concerned about global warming–putting aside the merits of that position–would want to encourage the adoption of solar panels, including by keeping them as cheap as possible. Nor, I would have thought, is this the time to add more fuel to the fire that is starting to characterize the U.S. trade relationship with China. There’s plenty enough fuel for that already.
Filed under: Energy and Environment; General; Trade and Immigration
Finally, a Pro-Trade Proposal on Climate Change
One of the main recommendations in my recent paper on climate change and trade was to reduce trade barriers on “environmental goods and services.” Trade liberalization in this area is slated for special attention in the Doha round of multilateral trade negotiations, but progress there is decidedly unimpressive.
I’m under no illusion that this development had anything to do with my recommendations, but it seems that the 30 member countries of the Organization for Economic Cooperation and Development are attempting a trade deal amongst themselves and China to expedite tariff reductions in “climate friendly” goods (more here). Apparently it is designed to be an incentive to get Beijing on board for a global climate deal, but of course American consumers and businesses would gain from cheaper and better access to green technology, too.
I would, of course, prefer that U.S. lawmakers see the value in reducing tariffs on all goods without waiting for the other OECD members to catch on, but surely this development is better than the alternative.
Filed under: Energy and Environment; Trade and Immigration
Breaking: Economics 101 Still in Effect
Dairy farmers are working lobbying hard to ensure they get their hands on more of your money. Apparently, changes made last year to the Milk Income Loss Contract — mainly to take account of rising feed costs — were not enough to stem the losses.
The Senate recently voted to give the USDA an extra $350 million for dairy farmers’ support. The House left dairy support out of its appropriations bill, so the two chambers are working on the compromise now (prediction: the taxpayer will get screwed).
Here’s an ironic quote from a Brownfield news post yesterday (linked to above). It’s Missouri Dairy Association Chairman Larry Purdom on how to bring prices back up:
“Our feeling is that if [USDA] would buy some cheese and product that’s in storage…hanging over our heads, depressing prices,” Purdom tells Brownfield from his farm at Purdy, Missouri, “we feel like the prices would start moving on their own if we didn’t have this surplus.”
More on U.S. dairy policy here.
Filed under: Tax and Budget Policy; Trade and Immigration
An Australian Perspective on Joe Wilson
Will you allow a foreigner to comment on something that has intrigued her about this great country?
All this hand-wringing and then censure (not to mention impeachment talk) over Rep. Joe Wilson’s admittedly rude intervention at President Obama’s speech last week has me baffled. Partly, it is because I come from a land that is governed by a parliamentary system, where Question Time is a much-loved institution. The offense (manufactured, perhaps) that Representative Wilson’s comment has caused is almost laughable when I think about some of the insults that have been hurled in both directions in Australia’s parliament. Here’s a collection of quotes from former Australian Prime Minister Paul Keating just for starters (warning: offensive language). Here is a Brit’s take on why American politicians are “a bunch of wimps.”
Mainly, though, I am surprised that questioning of power is not more valued in America. To be sure, the President of the United States is not answerable to Congress in the same way that Ministers (including Prime Ministers) are to a Westminster-system parliament, but I would have thought that questioning the president would be well within the bounds of a nation conceived in liberty and on the understanding that all men are created equal. You got rid of infallible kings in 1776, remember?
I get why the Democrats are making political hay out of Representative Wilson’s outburst, even if I think they are hypocrites for suddenly finding religion on civility, given their own history. And I thoroughly reject, by the way, the notion that much of the criticism directed towards Obama is based on racism, even if this sort of talk gives unfortunate credence to the claims. But those same Dems who are shocked (shocked!) by Joe Wilson’s behavior are right now allowing a tax cheat to pull the nation’s purse strings.
This focus on style — who says what, how they say it, what their motivations might be — over the substance of what the congressional and administrative branches of government are doing is tremendously disappointing. I have heard far more censorious talk about Joe Wilson’s character and the propriety (or lack thereof) of what he did than of the point he was making. Meanwhile, the Dems are keeping “internal” investigations of Charlie Rangel’s ethical violations very quiet indeed.
Quite frankly, I’m far more interested in those than I am in Joe Wilson’s rudeness.
Tuesday Afternoon Hypocrisy
An article today in Congress Daily [$] made me laugh out loud. In a “Geez, these people have some nerve” kind of way.
A bunch of politicians have written to Obama, saying that Airbus should be disqualified from the current bidding process for the Air Force refueling tanker contract on the grounds that the World Trade Organization has reportedly (the final ruling is not yet out) ruled EU subsidies to Airbus illegal. Here’s part of their letter:
Buying Airbus tankers would reward European governments with Department of Defense dollars at the same time that the U.S. Trade Representative is trying to punish European governments for flouting international laws… American taxpayers must not be forced to foot the bill for products which benefited from illegal subsidies.
As I wrote to my colleagues when the news came over email, I wonder if those same politicians (authors, by the way, of the auto bailout and cash-for-clunkers) will be as indignant about subsidized companies if/when Boeing’s subsidies, currently being examined in a counter-challenge at the WTO, are ruled illegal. And how about all those illegal cotton subsidies that the United States doles out? Should taxpayers be footing the bill for storing cotton (scroll down, under “Commodity Certificates”)?
In any case, while I feel sorry for the taxpayers who pay for them, foreign subsidies are a gift to the U.S. consumer. The bill that American taxpayers are being “forced to foot” is smaller than it otherwise would be because of the corporate welfare flowing to Airbus. (Note to the libertarian purity police: I’m not advocating for corporate welfare here, just noting the other side of the economic ledger).
Filed under: Tax and Budget Policy; Trade and Immigration
A Harsh Climate for Trade
Although it has very much taken a back-seat to health care, and a press report [$] today say it could be bumped down yet another notch on the administration’s hierarchy of goals, climate change is shaping up to be a major battle if the others don’t prove to be prohibitively exhausting. So today I am weighing in on the debate by releasing my new paper on the dangers of using trade measures as a tool of climate policy.
The Democrats were keen to pass a climate change bill in advance of the December meeting in Copenhagen designed to agree on a successor regime to the Kyoto protocol, which expires in 2012. However, opposition from a number of quarters and the fear of health-care-town-halls-mark-II has cooled their heels. Senate leaders have pushed back the deadline for passing bills out of committees a number of times.
The reason why climate change legislation has become so controversial is that businesses and consumers are, quite understandably, fearful about any policies that threaten to increase their costs. I’ll leave it to others to blog about the effect of emissions-reductions policies on jobs and profits, but even the fear of losses has led to calls for special deals for “vulnerable industries”, in the form of free emission permits and/or protection from imports that are sourced from countries that purportedly take insufficient steps to limit emissions.
H.R. 2454, the so called Waxman-Markey bill passed by the House in June, contains both free permits and provisions for carbon tariffs. I’ve blogged before about the efforts of trade-skeptic senators to introduce the same kinds of protections in the senate bill. To that end, Sen. Sherrod Brown (D, OH) is reportedly meeting with Sen. Barbara Boxer, Chairwoman of the Senate Environment and Public Works Committee next week about trade protections for manufacturing industries. As my paper makes clear, I think these efforts are misguidedly ineffective at best, and harmful at worst.
I’m looking forward to discussing these issues in more detail tomorrow at a Hill briefing in Washington DC. Registration for the event was closed very early because of overwhelming demand, but you can watch the event when the video becomes available on the Cato website.
Filed under: Energy and Environment; Trade and Immigration
More on Sugar’s Sweet Deal
Following my and Dan’s blog posts last week on the continuing lining of Big Sugar’s pockets at consumers’ expense, the Washington Post and Wall Street Journal have written editorials on the scam. I commend both of them to you, although I could have done without the WaPo’s moralizing on the “social benefits” of high sugar prices.
Sweet, and Yet Very, Very Sour
My colleagues have blogged before about the recent sugar “market” woes. There was some hope that the USDA, which manages sugar imports very carefully to maintain U.S. prices up to three times higher than world prices, would relax the sugar quotas this year and give sugar users some well-deserved and long overdue relief.
Alas, it was not to be. According to Congress Daily, the USDA announced today [$] that there would be no increase in the import quota for the time being, and that their models saw no cause for alarm because of predicted increases in domestic production and Mexican imports (allowed special import status through NAFTA). And who cares about sugar users’ concerns when you have models?
The American Sugar Alliance says (sigh) that the announcement “makes perfect sense. Supplies are adequate and will soon be building. If any tightness were to emerge, it would not be until next summer. USDA will have adequate time next spring to boost supplies.”
Do you hear that, sugar consumers of America? The USDA is on the case. Now, I’ve got nothing personally against the folks at USDA. I know many of them personally and they are fine people, and smart economists, who are just following congressional orders. But, really, are we still, in 2009, in an at least nominally market-oriented economy, seriously attempting to micro-manage supply and demand of commodities?
Another Shot Fired in the Carbon Tariff Debate
I’ve written before about the “carbon tariff” debate, and will continue to do so as the Senate gears up to write a climate change bill. Indeed, I have a paper coming out in early September with a fuller analysis of the effects of slapping tariffs on countries in an effort to force them to sign up to international carbon-limiting agreements. [Spoiler alert: you'll be shocked to know that I conclude that using trade measures in climate change policy is possibly illegal under world trade rules, definitely costly to the U.S. economy, and more than likely counterproductive in the efforts to forge a climate agreement (for what that's worth).]
Seemingly unconcerned about the costs of green protectionism, ten Democratic senators crucial to the upcoming Senate vote (long-standing protectionists all, with the exception of newbie Al Franken) sent a letter to the White House yesterday, urging President Obama to rethink his (lukewarm) resistance to carbon tariffs. They argue that a dreaded “unlevel playing field” would result from saddling U.S. industries with higher carbon costs while, say, Chinese ones remain unencumbered.
You’ll have to wait for my paper for a full examination of those arguments, but in the meantime here’s some excellent analysis of the politics of it all by former Catoite, international trade lawyer, and friend of liberty Scott Lincicome. He assesses the scorecard as follows:
Pro carbon tariffs – Ten protectionist Senators, the US House of Representatives (in Waxman-Markey), France [link added], and Paul Krugman.
Anti carbon tariffs – the rest of the world.
Senator Harkin Laments Lack of Poverty
An AP story today contains a quote that caught my eye, an indication that apparently jet-gate hasn’t jaded me as much as I thought it had. In the context of rising enrollment in the federal food stamp program (now known as the Supplemental Nutrition Assistance Program, or SNAP) and private charity efforts to feed poorer Americans, Senate Agriculture Committee chairman Tom Harkin (D, IA) says this:
Ensuring that our kids have enough to eat during summer months is critically important, especially during these tough economic times… Unfortunately, despite repeated efforts, the number of children participating in federally reimbursed summer nutrition programs in 2008 was the same as it was 15 years ago. (emphasis added)
At first I thought maybe he was saying how unfortunate it was that there had not been progress in reducing the number of kids receiving nutrition assistance, which would be fair enough. But the context of the quote suggests that Senator Harkin would prefer that more kids receive federal food assistance.
Sometimes I get the impression that politicians want increased power over our lives.
Filed under: Education and Child Policy; Health, Welfare & Entitlements
French Folly
Following the dubious example set recently by U.S. legislators, French politicians have informally proposed slapping punitive tariffs on goods from countries who refuse to curb greenhouse gas emissions. The German State Secretary for the Environment has, quite rightly, called foul:
There are two problems — the WTO (World Trade Organization), and the signal would be that this is a new form of eco-imperialism,” Machnig said.
”We are closing our markets for their products, and I don’t think this is a very helpful signal for the international negotiations.”
I have a paper forthcoming on the carbon tariff issue, but in the meantime here’s a recent op-ed (written jointly with Pat Michaels) on climate change policy mis-steps.
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