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Cheating Cheaters of Cheatery: The Amazing Story of Brazil's Cotton War with the U.S.

2011-01-17 · John · watch on YouTube · Economics · explainer learning

Lower-confidence wave

2011 videos did not pass the QA gate (17 %); their analysis is shown but less reliable.

John retells a Planet Money story: the US illegally subsidizes its cotton farmers, Brazil won a WTO case against it, and rather than comply the US agreed in 2010 to pay Brazilian cotton farmers $147 million a year.

What is said

00:00:00 — Greeting: John loves Brazil, whose Nerdfighters got Looking for Alaska published in Portuguese; a story from Planet Money; errands

  • ★★ John says Brazilian Nerdfighters petitioned Brazilian publishers to publish Looking for Alaska in Portuguese, and it worked. — 00:00:00 · Nerdfighteria, Looking for Alaska
  • ★ John first heard today's story about Brazil and the United States on the 'amazing' podcast Planet Money, linked below. — 00:00:07

00:00:16 — How the US cotton subsidy makes American cotton artificially cheap everywhere

  • ★★ John says his t-shirt, like almost all cotton t-shirts in the world, is made from 100% American cotton because the United States massively subsidizes its cotton industry. — 00:00:16 · United States
  • ★ John tells the story while running errands: getting a water filter for his fridge, driving on snow and going to the grocery store. — 00:00:28
  • ★★★ The US spends more than $3 billion a year on its cotton subsidy, making American cotton artificially cheap; John calls this a bit of an oversimplification. (hedged) — 00:00:31 · United States
  • ★★★ The subsidies make American cotton cheap everywhere, which is why the US is by far the world's largest cotton exporter: great for American cotton farmers, bad for all others. — 00:00:42 · United States
  • ★★ It also hurts Americans who aren't cotton farmers: all they get for $3.1 billion in taxes is slightly cheaper t-shirts, John says. (playful) — 00:00:52

00:01:05 — Brazil's WTO case (2002), the 2004 ruling, US appeals and refusal to comply

  • ★★ Under international trade agreements some agricultural subsidies are legal, but a country may not artificially lower the price of something. — 00:01:05
  • ★★★ In 2002 Brazil filed a WTO case arguing that illegal US cotton subsidies made it impossible for Brazilian farmers to compete, even selling cotton in Brazil. — 00:01:09
  • ★★★ In 2004 the WTO ruled US cotton subsidies illegal; the US refused to comply and kept appealing, lost its last appeal in 2008, and still would not comply. — 00:01:29 · United States
  • ★★ There is no actual penalty for failing to follow trade agreements, so the US could simply refuse, John says. — 00:01:51

00:01:57 — Retaliation: small vs big economies, Brazil's threat and the April 2010 deal to pay Brazilian farmers $147 million a year

  • ★★ With the US ignoring the WTO decision, Brazil's only real recourse was retaliation, but a small economy's options are limited: if Liberia taxed American imports, America would shrug. (playful) — 00:01:57
  • ★★ Ten years earlier the fight would probably have ended there, but Brazil has since become a big economy, though nowhere near the size of the US. (hedged) — 00:02:17 · United States
  • ★★★ When Brazil threatened to tax American imports such as pharmaceuticals and cosmetics, those companies pressed their friends in the US government to settle the cotton dispute. — 00:02:26
  • ★★★ In April 2010 the US announced it would pay Brazilian cotton farmers $147 million a year so it could keep illegally subsidizing its own cotton farmers at $3 billion a year. — 00:02:37 · United States

00:02:53 — Conclusion: Brazil was smart enough to sue and big enough to scare the US; sign-off

  • ★★ That, John tells Hank, is how the United States came to subsidize the Brazilian cotton industry. — 00:02:53 · United States
  • ★★★ To be fair, John says, the US should subsidize every cotton industry in the developing world; Brazil was just the only country smart enough to sue and big enough to scare it. (playful) — 00:02:56 · United States
  • ★★ John loves Brazil but does not want to send its cotton farmers $147 million each year. — 00:03:05

00:03:11 — Plug: the shirt John is wearing at DFTBA.com/pizza

  • ★★ Telling Nerdfighters the American taxpayer already paid for much of his shirt, John invites them to pay the rest at DFTBA.com/pizza: $18, 'thanks to bad economic policymaking'. (playful) — 00:03:11 · Nerdfighteria, Pizza John, DFTBA Records

Humor (significant)

  • John paraphrases Brazil's 2002 WTO complaint about US cotton subsidies. — 00:01:16 > «Americans are a bunch of cheating cheaters of cheatery»
  • After the WTO rules US cotton subsidies illegal in 2004, John voices the US response. — 00:01:33 > «We're rubber, you're glue; W.T.O. rulings bounce off us and stick to you»
  • A small economy like Liberia could retaliate against US cotton subsidies by taxing all American imports. — 00:02:15 > «And then America will be like, "... Okay."»
  • John plugs the shirt partly paid for by the American taxpayer's cotton subsidy. — 00:03:20 > «thanks to bad economic policy-making, it's only $18»

Threads in this video

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