Stallman: Bold Action on Tariffs Would Help Stop Global Slide

WASHINGTON, D.C., March 5, 2009 – Global economic downturns and protectionist trade policies do not mix. That is a lesson made clear by the mistakes of depression-era trade policies of the early 20th Century. To halt a global march toward similar flawed policies during the 21st Century, the United States and like-minded trading partners must act now, according to American Farm Bureau Federation President Bob Stallman.

Speaking today to an international trade workshop sponsored by the Virginia Tech Department of Agricultural & Applied Economics and the Virginia Farm Bureau Federation, Stallman said liberalized trade policy is even more important during times of global economic strife.

“My most important take-home message for you today is the message we are emphasizing to President Obama and his administration: Let’s not repeat the mistakes of the past,” Stallman said.

Stallman, a Texas rice and cattle producer, explained that the dangers of protectionism are highlighted by the disastrous impacts on the U.S. and world economy of the 1930 Smoot-Hawley Tariff Act. Those punitively high U.S. import tariffs against other nations during the depression era, led foreign countries to sharply reduce their imports to the United States. The actions, in response to those U.S. trade barriers, both lengthened and deepened the Great Depression, according to Stallman.

“We must take immediate steps to assure global competitiveness and stop the spread of protectionism fueled by the global economic slowdown,” Stallman said. “In tough economic times, we cannot turn our back on trade. In fact, we must be more aggressive than ever in seeking markets for our products. It is not time to set up roadblocks.”

During the speech, Stallman issued a bold challenge for WTO-member nations to seriously examine the idea of locking in their tariffs at applied levels, which would deliver a real reduction in global trade barriers and serve as an incentive for global economic activity.

“The initial decision to merely reduce tariffs from a nation’s allowable bound rates, rather from the actual duty rates that are applied to goods, has done little but ensure years of wrangling and negotiated exceptions,” Stallman said. “That quagmire will result in little trade and virtually no solution to address a now urgent necessity for world economic growth.”

Stallman said the times of the United States “leading the world trade talks by concession” are over. He said it is time for the rest of the world to step up and make real commitments to improving trade.

Stallman called the intransigence and meandering of the Doha Round trade talks a “good-times indulgence” whose party was brought to a crashing end by the global economic spiral.

“Now is the time to confront reality,” Stallman said. “Today, trade is contracting around the world as the global economy fails deeper into recession. Baby steps to reduce tariff barriers are of no use when nations are looking to erect new schemes to block market access.”

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