The Rice Solution


    The recent failure of free trade agreement talks between the United States and Korea is frustrating. The "sensitive" issues of rice (for the Koreans) and textiles (for the Americans) are harming consumers on both sides of the ocean. The debate about the Korea-US FTA sounds very familiar to the debate between unions and corporations’ outsourcing and offshoring efforts.

    Korea is concerned that by opening up its rice market to imports, that it will effectively make their domestic industry obsolete. The Korean rice industry is practically obsolete and as such requires extensive subsidies to stay afloat along with highly punitive tariffs on imports. The United States fills similarly about its textile industry, although obsolecence isn’t the problem in the US, it’s the union monopoly on the labor supply that has resulted in anti-competitive wages for textile workers.

    The solution is simple. Let the market solve the problem. Let consumers vote with their dollars (or Won.) Allow unrestricted rice imports from the US, but label that rice in the stores as "US Rice" in big bold letters. Label the domestic rice as "Korean Rice." The US rice will of course be dramatically cheaper, but if consumers don’t want to lower prices, they would be free to buy the expensive domestic product. The same model could work for textiles. If the citizens of a particular country are truely interested in protecting inefficient industries, then let them pay for it themselves.

    The same approach might work in countering political opposition to outsourcing and offshoring. If US consumers want to pay more for products and services from companies that do not use outsourcing or offshoring strategies, then provide that option. For example, in the new edition of a particular software program, have an "outsourced" version which of course would cost less, and an approprately labeled, "non-outsourced" version. Consumers would overwelmingly "vote" for the cheaper version. This seems like an absurd idea, but if the benefits of outsourcing and offshoring are spelled out more clearly to the consumer (i.e. via price) the debate would cease. Consumers would immediately see the benefit to their personal bottom lines.

    I’m tired of paying prices that are higher than they should be. I spend more of my paycheck supporting outdated farmers or union pension plans than I should. I would rather spend the excess on other products or perhaps invest my savings in my retirement and reducing my reliance on a dubious Social Security system.


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