Free trade only for the rich

July 24 was a day of failure. It was the day the Director General of the World Trade Organization, Pascal Lamy, suspended the Doha (named after the capital of Qatar) trade talks after several months of stagnation.

The Doha talks began just after 9/11 as a grand effort by rich nations to support the poor by lowering trade barriers, specifically trade subsidies. Though not surprising, the United States, Japan and Europe's failures in making these trade concessions symbolize the inequality and hypocrisy in our world today.

Trade subsidies in rich nations strangle farming in the Third World, prevent competitive markets and completely contradict "free trade" agreements pushed by the United States and Europe. Farm subsidies in rich nations total $1 billion each day, equal to the yearly gross domestic product of all of sub-Saharan Africa. Yearly farm subsidies in rich nations almost double the total aid given to the Third World.

Poor nations would probably be better off without aid and American and European farm subsidies than with both because the poor rely on agricultural exports.

The current mainstream development consensus argues every country should produce based on its comparative advantage, an economic concept that claims every nation will be better off if it exports the good it's best at producing.

Poorer nations generally have ideal conditions for farming, whereas Western nations would be better off selling their services than agricultural goods because geography is not as ideal in the northern hemisphere, where there are fewer Third-World nations. This is why the United States and Europe have farm subsidies; if they don't support them, their farms will fail.

But this screws the poor and completely contradicts mainstream arguments promoted by leaders in western nations. This situation is why Doha began in 2001, and it failed because the west refuses to take its own advice.

Farm subsidies need to end. Yes, that may mean farmers in the United States and Europe will lose their jobs, but they will instantly receive unemployment, opportunities for re-education, and their children will not starve to death.

On the other hand, subsidies in the West ruin livelihoods in poor countries.

A farmer in a poor nation can't compete with expensive technology and thousands of dollars in extra support. If he loses his job, his children won't eat, see doctors or go to school. It's likely that he will move his family to a city to find a job.

And migrating to the city means living in a slum with open sewers running past one's home, without clean water or adequate shelter.

Every year thousands migrate to cities worldwide. After the North American Free Trade Agreement was established in 1994, many went to Mexico City because they couldn't compete with the cheap goods produced by the United States and Canada.

So was NAFTA really free? Well, it worked out for American and Canadian farmers.

In the United States, only the major corporate farmers receive subsidies, benefiting a few thousand people at most. Oddly enough, it's these major farmers that have enormous lobbies and close relationships with members of Congress.

Obviously, their lives are more valuable than the millions of starving farmers and their families who are hurt by the subsidy system. At least, that's how U.S., Japanese and European governments are acting.