NationStates Jolt Archive

Something I read in the newspaper today...

Y'see, all of our orange growers here are having thousands and thousands of tonnes of oranges go to waste, rotting in fields, because there are very few corporations willing to buy the local product (despite us being self-sufficient in orange production); the bigger supermarket chains import them from elsewhere - mostly the USA, because they can get them cheaper (Duh. Well, it certainly isn't because US oranges taste better after being preserved and sent over here in a cargo container :p), and the farmers lack any ability to export them themselves - obviously.

However, on the flip side of the coin...our cherry growers can't find overseas markets, as foreign tarriff rates are too high (USA, New Zealand) or quotas are too low (China) for them to be sold at a competitive price or in significant numbers. These farmers are going to be forced to sell their produce at rock-bottom prices to local markets (They need $5 per kilogram to break even. They're guessing that they'll be sold at about $2/kg). Looks like i'll be eating a lot of cherries this year.

Anyway, In both instances, primary producers are being hurt by tarriffs...but on completely opposite sides of the coin, and a lot of food is being completely wasted, despite it being a good harvest year. Considering this, what is the best path to take?

(And obviously, these farmers selling up and changing career isn't an option. Nobody wants to buy orange or cherry plantations and the assorted farm machinery at the moment.)

I guess you finally realized how empty the US' position on free market and liberalization of trade is :rolleyes:

They're all for removing tariffs.. in OTHER countries, so they can dump their second-rate products on the foreign markets. But when it comes to removing tariffs to allow foreign products on THEIR market... that's another story entirely.

I guess you finally realized how empty the US' position on free market and liberalization of trade is :rolleyes:

They're all for removing tariffs.. in OTHER countries, so they can dump their second-rate products on the foreign markets. But when it comes to removing tariffs to allow foreign products on THEIR market... that's another story entirely.

Yeah, I noticed, and that's why I oppose the US-Australia "Free Trade" Agreement - not just primary products, but our pharmaceutical industry, automobile manufacturing, etc. will all be hurt.

It isn't *just* the USA, though. If it were, we'd still be able to sell to some other nation.

There are basically two options, set your own tarriffs on US oranges (protectionism) or force the World Bank to open up the cherry markets in china, USA and New Zealand (free trade). Or even both.

These arguments started 200 years ago and are still relevant. I prefer true free trade, no subsidies, no tarriffs, no extra help for your own producers. What this means is that people will be able to produce and sell according to supply and demand. If in the end, there is no demand for US oranges, e.g. if it becomes to expensive to export into australia, then there may be alternative markets (Jaffa oranges from the middle east maybe) or even demand for local produce. This demands a planetary wide accord and the US and EU will not stand for it.

Chances are tho, you get a Trade War! Tit for tat tarriffs setting, which is V. Boring and unimaginative.

The last thing you wanna do is subsidise your own produce. If you take the example of European subsidies on wheat and the like, it causes price deflation in third world countries and prevents them from selling their produce at a sustainable level. If your only market is the US, then it wouldnt matter really.

How about setting up your own trading bloc with New Zealand and other like minded countries along the lines of the EU?

If they're subsidizing the orange production an antidumping investigation by the WTO may be successful and compensatory tarifs imposed. Unfortunately these tend to take too long to complete.

If they aren't you will have to find ways to produce cheaper oranges and be more competitive in the international markets.

EDIT: You may want to bring a bunch of illegal aliens from Mexico, since it's they who pick the oranges for dirt cheap wages.

I wish every country in the world would do away with each and every tariff.

If they're subsidizing the orange production an antidumping investigation by the WTO may be successful and compensatory tarifs imposed. Unfortunately these tend to take too long to complete.

If they aren't you will have to find ways to produce cheaper oranges and be more competitive in the international markets.

EDIT: You may want to bring a bunch of illegal aliens from Mexico, since it's they who pick the oranges for dirt cheap wages.

You're confusing antidumping duties for countervailing duties -- countervailing duties are imposed when an industry is subsidized by a foreign country.

But anyways, agricultural goods are a bit different under WTO than normal goods. Countries, especially developed, should still be reducing tariffs and subsidies (but honestly, there are so many non-tariff barriers that if it's not one thing it's another). Developed countries promised to reduce the total aggregate measurement of support by 2000 -- but only by about 20%, so the WTO doesn't require they stop completely. Countries are also free to give farmers money that doesn't directly stimulate production (for instance, they can give money to not grow crops), but this could still lower the prices of oranges and whatnot, I'm sure.

As for the oranges, not being from Florida, I don't know much about them -- why are US oranges cheaper? Is it because of some market-distorting thing like subsidies? Or is it because the USA can produce them cheaper and more efficiently?

As for cherries...as far as my limited knowledge of the WTO makes me think, China should be ending agriculture quotas by the end of this decade.

But, to the main thrust of this thread, I do believe that the WTO's aim to reduce tariffs is the right way to go...but when you get to agricultural, it's an especially daunting task since food is so directly linked to health, safety and national defense. So that's my non-answer I guess.

There are basically two options, set your own tarriffs on US oranges (protectionism) or force the World Bank to open up the cherry markets in china, USA and New Zealand (free trade). Or even both.

Can't do the first; there is a Free-trade treaty with the USA in force.

The second...hmm.


The last thing you wanna do is subsidise your own produce. If you take the example of European subsidies on wheat and the like, it causes price deflation in third world countries and prevents them from selling their produce at a sustainable level. If your only market is the US, then it wouldnt matter really.
Yeah. This is the main thing that's causing me confusion over the whole issue...it's vital, having two third-world nations on our doorstep (Papua New Guinea and Indonesia) that we try to avoid doing something like that. We don't particularly want to piss Indonesia off.

How about setting up your own trading bloc with New Zealand and other like minded countries along the lines of the EU?

Trouble is, New Zealand is a chief competitor for most of our agricultural products, from wool to apples. It wouldn't work.

If they're subsidizing the orange production an antidumping investigation by the WTO may be successful and compensatory tarifs imposed. Unfortunately these tend to take too long to complete.

If they aren't you will have to find ways to produce cheaper oranges and be more competitive in the international markets.

EDIT: You may want to bring a bunch of illegal aliens from Mexico, since it's they who pick the oranges for dirt cheap wages.

Yeah, that's probably the main reason why...cheap labour. Like I said though, we're self sufficient in orange production. We could just not trade them. Perhaps if the government had an incentive for corporations to buy Australian grown produce....some sort of tax cut, maybe.