Newspaper article The Christian Science Monitor

Don't Clear-Cut the Forest of Corporate Subsidies

Newspaper article The Christian Science Monitor

Don't Clear-Cut the Forest of Corporate Subsidies

Article excerpt

"Enough is enough, and too much stinks," my grandmother used to say when talking about government taxation of her meager Social Security and state-issued Supplemental Security Income checks once a month. The same can be said for plans of the "Stop Corporate Welfare" coalition, which proposes to eliminate a number of government programs that provide subsidies for American corporations, especially in the area of international trade.

There is much to be reformed in the way of US government subsidies, and many, if not most, of the likely targets are those that inure to the benefit of large corporations with deep pockets. But before congressional reformers become too intoxicated with their power, they should lay down their budget-cutting axes long enough to take a broader view of what is at stake.

For programs in international affairs such as the Overseas Private Investment Corporation (OPIC) and the International Monetary Fund's General Agreements to Borrow and its Structural Adjustment Facility, government support is a sine qua non for worthwhile American participation in developing countries. In more ways than one, these programs provide security, leverage, and guarantees for American companies that the US is committed to trade and investment throughout the globe. As US commitment to foreign assistance declines fiscal year after year because of domestic budgetary pressure, the preservation and expansion of US trade and economic interests become more compelling than ever before. Beyond this, there is a more fundamental principle at stake: The US can't have it both ways. During the late 1980s and early 1990s, American firms and even the US government put much emphasis on the notion of "global competitiveness." Resources have been devoted to the long-term objective of making US exports competitive and to prying open hitherto closed foreign markets in what was formerly known as the third world. American companies and sympathetic government officials belly-ached about the undue advantage European and Asian companies had over American firms because of the subsidies provided by France, Germany, Great Britain, Japan, Korea, Taiwan, and other governments seeking footholds in foreign markets. To its credit, the US government responded admirably by creating or empowering a number of specialized agencies and programs to help American companies gain or regain a competitive edge in targeted foreign markets. US exports have grown steadily from $62 billion in 1994 to more than $72 billion in 1996. …

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