Ross Clark

Donald Trump is right: Western food markets are protectionist

Donald Trump is right: Western food markets are protectionist
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In Donald Trump’s dealings with Kim Jong-un it is possible to decipher a strategy of creative destruction: stir things up, so that relations cannot seem to get any worse – and then get down to doing business. Might the same process also be in operation in Trump’s trade war with his G7 allies?

The President’s tweet about Justin Trudeau being ‘dishonest and weak’ was undoubtedly rude and, as some like to put it, ‘against the norms’ of international diplomacy. Yet the beauty of it was in the last line: “ Our Tariffs are in response to his of 270% on dairy!”. Trump has pissed in the soup, and in doing so has managed to raise an issue which none of the other terribly polite G7 leaders would dare do: to question the rampant protectionism which developed countries continue to apply to agricultural goods. It is absurd for G7 leaders to bleat against 25 per cent tariffs on steel, call that a trade war, when they themselves refuse even to contemplate the removal of tariffs on food which can reach many times that.

The developed world seems to have agreed a policy which is deeply hypocritical and which will ultimately prove unsustainable. We preach free trade, to the point of twisting the arms of developing countries to open their markets to our manufactured goods – and yet at the same time we erect high barriers against imports of agricultural goods. For many poor countries it is a huge impediment to their development – food production is where they have the comparative advantage, the one industry which they could quickly grow in order to boost exports. Instead of embracing free trade in food, which would have a far more powerful effect on the incomes of the world’s poor than any billions spent on aid, we try to close it down in order to protect the interests of our own farmers and landowners.

It might be too much to hope that Donald Trump has a carefully-honed strategy to open western food markets to free trade. It may be that his is simply rude and that is that. But whether by design or accident he has forced the subject onto the table. Neither Justin Trudeau nor any other leader of a developed nation will from now on be able to accuse any country of blocking free trade without being challenged on their own protectionist instincts over food. Trump’s remarks might not have gone down well in Canada or Europe, but they will be applauded in poorer parts of the world.