- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Free Trade Fact of the Day

Posted By Conn Carroll On June 18, 2008 @ 9:55 am In International | Comments Disabled

We know liberals in Congress no longer believe in free trade [1], but what about the world’s self described Marxists? If PoliticalAffairs.net [2], the destination for “Marxist thought online”, is any indication, Marxists are no fan of free trade and blame it for the world’s food crisis:

For decades, neo-liberal trade liberalisation and structural adjustment policies have been imposed on poor countries by the World Bank and the IMF. … These countries have been forced to open their markets to global agribusiness and subsidised food exported from rich countries. In that process, fertile lands have been diverted away from serving local food markets to producing global commodities or off-season and high-value crops for western supermarkets, turning many poor countries into net importers of food.

But as Thompson Ayodele, Executive Director of the Initiative for Public Policy Analysis in Lagos, it is not free trade, but protectionism that is to blame for poor food production in Africa [3]:

Nigeria at different times has banned the importation of various staples including wheat, rice, maize and vegetable oil. Such restrictions may indeed protect local industry for a short time, but it punishes consumers immediately and discourages production in the long run. Protectionism from competition and innovation allows local producers to hike up prices on lower-quality goods. Relaxing these restrictive trade practices will increase the availability of food and a fall in prices.

Unless crop yields increase, the reserves will in a short time be depleted. While importing staple foods could complement the present shortfall, many countries have counter-productive bans or restrictions on the export of such items. Aside from the fact that these do not actually stimulate local production, it protects it from competition. Lack of competition undermines innovation, raises prices and damages quality.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/06/18/806/

URLs in this post:

[1] liberals in Congress no longer believe in free trade: http://www.foundry.org/2008/06/05/free-trade-fact-of-the-day-63/

[2] PoliticalAffairs.net: http://www.politicalaffairs.net/article/articleview/7033/1/340/

[3] protectionism that is to blame for poor food production in Africa: http://www.newtimes.co.rw/index.php?issue=13535&article=6451

Copyright © 2011 The Heritage Foundation. All rights reserved.