That is the question that a serious reporter would have asked WTO Chief Pascal Lamy after he complained that subsidized exports from the United States and other wealthy countries are raising food prices. That is not the way markets usually work and that is not what most trade models show.
The standard story is that subsides cause items to be sold at below market prices. Take away the subsidy and prices rise. Does Lamy not know this or is he just a politician making an argument to advance a policy he favors?
--Dean Baker
[Here's an example of the NYT complaining about subsidies lowering prices in the developing world.]
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