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Tuesday, June 14, 2005
 
Transcript of Questions and Answers From the Blogger Conference Call with Bob Geldof--Part I

Joe Trippi: Okay, thank you for giving us that rendition of what’s going on, what we can do. What I want to do now is open the lines up so that you bloggers can ask specific questions.

John Hinderaker: I think the way that this works is that now that you’ve hit the switch, Joe, anybody who wants to ask a question can just jump in, identify himself or herself and ask the question, is that right?

Trippi: Let’s see, somebody have a question?

Todd Zwicki: Yeah, I’ll go first, this is Todd Zwicki from the Volokh Conspiracy, can you hear me?

Geldof: Yeah, hi.

Zwicki: Good, could you just explain to me the notion of trade justice and what relationship that bears to free trade?

Geldof: Excellent question. We say we live in a free trade world, where that’s how we operate and that’s what we think is the ideal way to, but it’s not true. The European Union is really a protective racket that Al Capone would be proud of. By subsidizing certain sections of our industry, we’re in fact molly-coddling them and protecting them against the competition that you and I are subject to, if another blogger comes along who appeals to a sector of the public, and it’s in your face, you’re kind of dead so you’ve got to (box?) clever. These people, take the cotton farmers of America, the sugar farmers of America are causing a fuss now because I believe the United States is in a free trade agreement with Latin America and the sugar producers are kicking up a fuss and saying they need to be protected. Well, why, if your car manufacturers are open to international competition, and anytime a country does get protection it suffers. It suffers blindly, but you know there are issues like export subsidies, where you subsidize people to export a drug or product on poorer countries. I’ll give you a specific American example: Some cotton farmers in the Delta, for example, get $750,000 a year to produce cotton that nobody needs, so they’re just using up land growing this stuff—or not growing it, it’s just as good not to grow it, but when you bale up this stuff, what you do with it, you destroy it, so American taxpayers’ money is paid to look after these people even though we don’t need their produce, then American taxpayers money is spent on burning this stuff. If it’s not burned, we then dump it in other economies, so a cotton farmer in Mali, in Africa, he earns a dollar a week. When Mali applied for IMF loans, the IMF said fine, but what you must do is you must structurally readjust your economies and you must open your markets to American cotton. American cotton entered the market, it was extremely cheap, completely under cost, Malian costs, where the producers have to work over ever boll, but because American cotton is subsidized to such a tune in effect it’s dumped, and it just destroys the local industry. The guy who was earning a buck now earns nothing so his family is wiped out. But perversely the World Bank said they would only lend to Mali if it turned and closed down that facility, and only let in 3% of imported cotton. So, what we say to these people is do one thing, do another, and they have no mechanism to defend themselves.

So that’s an example of unfair trade, let me give you another example: A pineapple grower. He can export his pineapples to us in Europe, but we charge him 20% tax on his pineapples. If he exports a value-added product, like pineapple slices, then we will charge him 43% tax. If he adds a more common product, like pineapple juice, we will tax him 83%, so his products are non-competitive in our marketplace, where our farmers are subsidized, not taxed, so he’s wiped out and he’s nowhere to sell it. (?) we say yea to sell us pineapples, but you can’t sell us your value-added products like juice or slices, you send it to us, we’ll slice it and juice it and send it back to you and then charge you. So you know, Africa has 2% of world trade; it totals 2%. And we constantly put these barriers up to stop them trading with us. Who are we stopping trading, so you have an image in your mind, is this guy, who’s out there, hoeing his field with his children, cause it’s only physical labor there, earning a dollar a week. That’s ridiculous. We don’t intend to do that, there is no one who actually intends that to happen, but, yes, it’s the unintended result of what we’re doing. If you genuinely believe in free trade, then read your Adam Smith, the great apostle of free trade, and the great Bible of free trade of course is the book The Wealth of Nations, which a Scottish guy wrote in the 18th century. And what he specifically states is that if the economy must be protected by the chill winds of competition, very like a flower, standing alone in a naked field, (?) protected and that’s what we must do, to grow these economies, they must be protected but in a different type of protectionism, and having complained about ourselves, that we just say that the greatest barriers to trade are within Africa itself. There are the most ridiculous barriers between borders. So a car imported from Japan to (Aberjam?), costs $2,000 to import it, but (Aberjam?) to Addis Ababa in the same continent--is another $5,000-- $5000! It’s ridiculous, but the problem is these economies are so weak that perhaps 20% of their budget are intra-border customs (poke?) But the amount of that costs them a fortune. So that’s one of the problems, but it finally ends up in a great moral disgrace. Europe gives every poor person in Africa 65 cents, per annum, 65 cents! Every surplus cow, unnecessary, unwanted, surplus to requirement, that we subsidize farmers to grow, and then kill the cattle and then burn the cattle, every cow in Europe gets a subsidy of 848 Euros. A human being? 65 cents. A cow, unnecessary cow, 848 Euros. Gentlemen, the world is broken and it’s a political fracture. That is a disgrace.

(31:02) (Whew! That was a long response!) Break time, to be continued.
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