IN OTHER WORDS : Subsidy reform

The World Trade Organization struck a huge blow for poor countries the world over last week when it upheld a ruling that the billions of dollars America spends to subsidise its cotton farmers violate global trade rules. It is long past time for the US to take responsibility for its dreadful cotton subsidy programme, which, by distorting the real price of cotton on the world marketplace, has managed to drive poor farmers from Chad to Benin to Burkina Faso out of business.

The ruling gives the Bush administration, which has been pushing for broad farm trade reform, the chance to do what it should already be itching to do. Those reforms should have been made deca-des ago. Indeed, we would like to see the WTO take on the subsidies that Europe lavishes on its farmers; they exceed America’s. It is almost inconceivable to think of defending a system that helps farmers in the rich world at the cost of those in the developing world. Brazil, which brought the case against the US, rightly argued that the American subsidies increased cotton production, which, in turn, helped destroy Brazil’s export markets.

Organisations that care about global poverty, from the UN to the World Bank to Oxfam, have argued that reducing subsidies would do much to help poor economies. We are glad the WTO has joined the chorus, and urge America, Europe and Japan to chime in too. — The New York Times