More on subsidies and trade restrictions

Jason Jones at the Adam Smith Institute blog writes

I wish we could stop flogging a dead horse. Sadly, the politicians won’t let us.

The deceased animal in question are subsidies and trade restrictions, in particular the EU's Common Agricultural Policy. He refers to an article in the Independent newspaper that says

British households pay an extra £832 a year in grocery bills due to the huge EU subsidy system ...

But the article also points out that the EU subsidy system is

... depriving tens of thousands of African farmers of their livelihoods, a charity warns.

The Independent piece notes that

Claire Godfrey, trade policy adviser for Oxfam, said: "Not only does the Common Agricultural Policy hit European shoppers in their pockets but strikes a blow against the heart of development in places like Africa.

"The CAP lavishes subsidies on the UK's wealthiest farmers and biggest landowners at the expense of millions of poorest farmers in the developing world.

It goes on to say

The £30bn-a-year EU agricultural subsidy regime is one of the biggest iniquities facing farmers in Africa and other developing counties. They cannot export their products because they compete with the lower prices made possible by payments.

In addition, European countries dump thousands of tons of subsidised exports in Africa every year so that local producers cannot even compete on a level playing field in their own land.

Jones in his ASI piece explains that

All of this is not to say the EU is the only culprit. Trade policies in Africa are prohibitively restrictive.

He also explains that the EU, the UN, the US, along with many other countries NGOs and IGOs try to solve Africa's problems with foreign aid. But as economists like Bill Easterly will tell you, this approach hasn't worked. Jones suggests a partial solution

Let them produce and compete! Let free trade work. A couple of weeks ago, The Economist reported that 250m of the 270m people lifted from poverty since 1990 were Chinese. Is this because of foreign aid to China? Absolutely not! The Chinese government made capitalist reforms, and foreign nations opened up trade. Although China has a long way to go, it has come a long way and is now freer than it has ever been. Africa is different, but requires the same approach—internal and external changes to trade policy.