DOHA tariff collapse costly to agriculture

Apparently the so-called DOHA round of world trade negotiations have collapsed, mostly because the booming countries of China and India have declined to go along.

The main goal was to eliminate rich government subsidies and tariffs that protected agricultural goods, opening new markets to those like the U.S., that had great production capacity and could market the crops overseas. Just like in the U.S., agriculture is a relatively minor part of the economy in many nations, and the best way to keep farmers from erupting is to buy them off with subsidies and tariffs on foreign goods.

This is economically inefficient, and actually quite costly to the free flow of goods among countries. Agricultural products are among the most traded--and needed--in the world economy. For the United States, ag products are among the most eminently exportable and profitable items for the world market.

Where limited negotiatiions have succeeded in eliminating trade barriers, great profits have been made in exporting U.S. wheat, beef, citrus, pork, poultry and other commodities. This can also have the effect of lowering food prices for U.S. consumers, as some of farmer's income needs are met overseas.

Political rivalries and domestic politics keep countries from being able to lower trade barriers, and that's what sank the DOHA round of trade talks. India and China may be booming now, but the day will come when things cool off, as they inevitably do, and they suddenly need to import commodities from other countries.

That's when they may rue the day they let the DOHA talks collapse.