We Never Said We Were Totally Pure

January 04, 1992

So confessed President Bush when confronted by Australian wheat farmers angered over protectionist U.S. export subsidies. In true campaign style, he vowed he would "safeguard the interests of American farmers" until the European Community scraps its ultra-protectionist farm program and agrees to liberalize world trade.

This is all very well:

* Except that it will enable the Japanese to scream "hypocrite" when Mr. Bush goes to Tokyo Tuesday to complain about the way Japan closes its markets to U.S. goods and subsidizes its own exports in predatory fashion.

* Except that it puts the United States in the position of undercutting one of its stoutest allies, Australia, in the stalled negotiations under the General Agreement on Tariffs and Trade when a combined front of grain-exporting nations might force the Europeans to compromise in the interest of expanding world commerce.

* Except that there is no convincing evidence the U.S. Export Enhancement Program, at a cost of $916.6 million a year, will really help American wheat farmers over the long run and may in fact hurt them if a protectionist tide closes off huge potential Third World markets.

* Except that mounting federal farm subsidies, now costing some $12 billion a year, not only increase budget deficits but cost consumers $65 billion extra a year in higher food and clothing prices, according to administration estimates.

With the GATT talks approaching another showdown on Jan. 13, the president hardly helps matters by depicting his country as half-protectionist -- a stance guaranteed to anger the Australians and amuse the Japanese and Europeans. Mr. Bush repeatedly describes himself as a committed free-trader but his actions and his policies convey a different story. When he drags Chrysler chairman Lee Iacocca, a self-proclaimed protectionist, along on his Asian trip; when he keeps up barriers against Japanese machine tools but refuses to limit Japanese auto exports; when he gyrates as he did in Australia, one is left with the impression that the president is either being intellectually dishonest or confusedly schizophrenic when it comes to trade policy.

Federal Reserve chairman Alan Greenspan testified last summer that U.S. trade policies were more protectionist than necessary in responding to unfair practices abroad. He said the "unilateral" removal of farm subsidies, quotas and other barriers to trade would save U.S. consumers "tens of billions of dollars."

We will never know whether a dramatic reduction in wheat subsidies during Mr. Bush's stop in Australia would have helped GATT break out of deadlock. Protectionism and the resulting formation of regional trading blocs threaten worldwide depression. We are left to hope that somehow the leading trading nations come to their senses before it is too late.

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