April 05, 2005

Tariffs, rules, subsidies, scarcity and abundance

In his excellent blog Juan Freire summarizes the opinions of several bloggers, including myself, about trade barriers on food products. I take the opportunity to put my views in more general terms:

Tariffs and rules hurt almost everybody by generating scarcity (higher food prices).

Export subsidies are bad for those who pay for them (taxpayers in rich countries) and good for everyone else because they generate abundance (lower food prices). From the point of view of consumers in poor countries, export subsidies in rich countries are a gift.

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