Countries Alter Food Prices With Tariffs

International food prices are rising globally, prompting many countries to adjust tariffs to attract or keep more food domestically. Homi Kharas, Senior Fellow, Wolfensohn Center for Development, recently discussed the tariffs with Kai Ryssdal on NPR’s Marketplace, noting how policies are impacting production and consumption patterns globally.

KAI RYSSDAL: The U.S. Trade Representative, Susan Schwab, said today she thinks negotiators are on the verge of a breakthrough on something called the “Doha Round.” Before you reach to Google to find out what that is, I’ll just tell you. It’s the latest set of global trade talks. It’s supposed to end up with there being fewer barriers to free trade around the world, but it’s been hung up for a year now on one key issue — agricultural subsidies, how much governments pay their farmers to grow, or not grow, their crops, but with world food prices skyrocketing, a funny thing’s happened on the way to Doha. Food tariffs are changing, which might change how everyone feels about those subsidies. Homi Kharas is a senior fellow with the Brookings Institution. Mr. Kharas, welcome to the program.

HOMI KHARAS: Thank you.

RYSSDAL: Mr. Kharas, food prices are rising around the world. Remind us how that’s affecting food tariffs, and what’s going on there.

KHARAS: Well, what’s happening is two things. A number of food importing countries have started to lower their import tariffs, to try to offset the impact of high international prices on their domestic consumers. And then on the other side, a number of food exporting countries are trying to make sure that more of their food stays at home and keeps prices low, so their putting on export taxes to stop their farm exporters from selling abroad, and keep them selling domestically.

Listen to the full show and read the interview >>