Worried about Latin America's leftward drift? Wonder what can be done? An effective remedy is at our fingertips, one that would benefit the United States at least as much as any other nation. I refer, of course, to free trade.

Relations with Brazil, for example, would sweeten noticeably if U.S. markets were opened to its sugar products, including alcohol fuel, which Brazilians manufacture from cane much cheaper than we do from Midwestern corn. To date, the advantage that tropical countries enjoy in this commodity has been canceled out by the tax exemptions the federal government provides exclusively to U.S. producers. Brazil has challenged this at the World Trade Organization and seems likely to win.

Our best option is to surrender unilaterally, thus demonstrating that using more fuel-alcohol truly is about overcoming out addiction to oil. As long as U.S. officials fight the Brazilians at the WTO, our program looks like just another sop to U.S. farmers and agribusinesses. Also, if Brazil and other tropical producers can increase their alcohol exports to the United States, they will lose interest in playing footsy with the likes of Hugo Chavez, Venezuela's socialist strongman. At the same time, fuel prices in the United States will be held down, because the alcohol added to gasoline will be obtained from the cheapest possible source. Moreover, U.S. dependence on the Middle East will be reduced and as commerce with hemispheric friends is increased.

Fuel-alcohol is not the only commodity for which freer trade would be mutually beneficial. A new argument against protection of U.S. sugar producers, the defense of which grows ever more ludicrous, focuses on the wide use of high-fructose corn sweeteners. Experts say this additive is a major contributor to childhood obesity and is less healthy than sugar. However, domestic production is driven by U.S. sugar prices that exceed international levels.

Supporting an expensive commodity to save jobs causes many others to be lost.

The conventional arguments against protection still hold. Supporting an expensive commodity to save jobs causes many others to be lost, just as saving one job in an inefficient steel mill causes five or more jobs to be lost in industries that use the steel. Cases in point: Lifesaver Candies moved its plant from Michigan to Ontario last year to take advantage of low, undistorted sugar prices in Canada; Heinz mixes 56 of its 57 ketchup ingredients at a facility in northern Ohio, then ships the product north of the border to add sugar before re-importation from Canada.

The United States would gain if this sort of silliness ended.

And while we're at it, let's drop the embargo on sugar, tourism services and other products offered in Cuba, which already buys U.S. farm products. The greatest benefit of ending the embargo, which after 40 years can safely be described as a failure, would be to deny the island's decrepit despot, whose personal fortune is said to exceed $100 million, any excuse for the misery caused by his unswerving faith in Marxism.

The virtues of free trade do not apply only to tropical crops, such as sugar, cotton and rice. One of the reasons many Argentines are anti-American is that U.S. representatives used to increase beef exports by suggesting that hoof-and-mouth disease is rife on the Pampas. If American officials would corroborate that Argentine beef is perfectly safe, we would disarm those who react skeptically whenever Washington advocates unencumbered international commerce.

The virtues of free trade do not apply south of the border, alone. Canadian attitudes have hardened recently because of U.S. failure to abide by a WTO mandate to jettison tariffs on imported wood. Ending the tariffs would make home construction cheaper in the United States. And these days, alienating friends with inefficient protectionism is absurd in the extreme.




Contributed by Douglas Southgate, a professor of agricultural economics at Ohio State University. Reprinted with permission from Douglas Southgate, first published in The Columbus Dispatch .

To read another Global Envision article about free trade, see What People Really Think of Free Trade.



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