Euros could don white hats

Posted: May 17, 2002 12:00 AM
Things are bad when the American people's last, best hope of returning sanity to domestic government spending is, gulp, the World Trade Organization. Led by Senate Majority Leader Tom Daschle, Congress passed a pork-laden monster farm bill that increased the federal ag budget by $83 billion over 10 years. (Its latest estimated price tag is $190 million.) So much for Daschle's pose as an opponent of deficit spending. On Monday, President Bush signed the beast. I'm guessing that, by then, Bush didn't want to sign it, but he had painted himself into a corner when he let it be known months ago that he'd sign whatever Congress presented to him. Bush should have instead warned spend-happy Capitol Hill pols that he would veto a bill top-heavy with welfare for agribusiness. Dubya didn't, and now he's paying for that mistake. No, worse, we're paying -- and paying and paying -- for it. Enter the European Union. For years, American ambassadors have lectured the Euros on free trade and the benefits that would accrue when European nations stopped propping up their agribusiness with government subsidies. It will be difficult for the Bushies to maintain that storyline after jacking up the U.S. ag budget by nearly 80 percent. Or as the Cato Institute's Brink Lindsey put it, "Our capacity to encourage countries around the world to take necessary pro-market steps has been blasted away by subservience to parochial interests." Especially when the EU is acutely aware that the Bush administration started giving large in the farm department in order to woo farm-state voters. The good news is that the EU, Australia, New Zealand and Brazil can sue the United States if farm-bill-boosted ag subsidies exceed the WTO annual cap on U.S. subsidies ($19.1 billion). Farm-bill boosters say that won't happen; a trigger provision in the bill would allow the U.S. agriculture secretary to adjust subsidies if the $19 billion cap is approached. USDA spokesman Kevin Herglotz noted that a University of Missouri farm report predicted that there is an 81 percent chance that the United States won't breach the WTO cap -- based on 2001 data. But as Cato's Lindsey and one WTO country Embassy Row analyst observed, the "trigger" clause sounds easy, but would be very hard to manage. With all those heaps of promised subsidies based on complex calculations, it would be no easy feat to see the breaking point, and having seen it, stop it. If world prices drop, or if production of certain crops increases, some analysts see a real possibility that the United States will reach or breach the $19.1 billion mark. Once it's known that the United States crept over the limit, WTO countries could sue Uncle Sam. The question then becomes: Will the countries go through the WTO protest process, or not? Aggrieved countries might find it is in their best interest to privately negotiate a deal with the United States. And it probably would be quicker. The situation must be dire when this columnist -- so disdainful of the ill-conceived Kyoto global warming pact and of EU pronouncements on the death penalty in America -- must, on bended knee, appeal to the European sense of justice. Please, pretty please, s'il vous plait, bitte, lodge a protest suit with the WTO. Look at it this way: It will give you free rein to dismiss Bush as a cowboy again. Here in the land of the free, some free-traders argue that Bush was right to sign the farm bill because it is expected to help him win Trade Promotion Authority -- which would make it easier for the executive branch to negotiate trade compacts on the fast track -- from Congress. They say that only purists resent that Bush signed the farm bill. They can sneer. Free trade with other countries is a good thing, but if it comes at the expense of a free market within the United States, who cares?