As usual, the dumping was made possible by domestic subsidies. These came from the funds (nearly 40 percent of total budget) that the European Union (EU) dedicates to its Common Agrarian Policy (CAP). Spain receives more than €5 billion.
According to the EU, the CAP exists to boost agrarian production, thus guaranteeing a certain level of income to the agrarian population, “stabilizing markets,” guaranteeing the security of supplies, and ensuring “reasonable prices.” This interventionist strategy, however, exists to shield a sector that produces less than 2 percent of EU GDP.
A better approach would be to move more toward a system of virtually no agricultural subsidies at all, as is the case in New Zealand. In 1984, the New Zealand government passed a reform to eliminate farm subsidies. At the beginning, this was a cause for alarm among farmers.
Instead of slapping new tariffs on olives from Spain, both sides of the Atlantic ought to think about real, unilateral, free trade.
While it is true the US president is wrong to impose new tariffs, the EU establishment is also hypocritical in denouncing “Trump’s protectionism” because the EU maintains its own protectionist policies that are especially damaging to developing economies.
The AEC’s fundamental goal is to promote a free, responsible and prosperous society. Through education and improving public understanding of key economic questions, the AEC promotes the idea of a free market economy and the ideal of a free society.