Price supports and liberal trade are not in conflict when support levels are set below the trend of international market prices and are adjustable as markets change. High price supports have also led governments into the additional problem of dealing with excess supplies. This has happened in all trilateral countries. Another alternative, of course, is to induce supply reductions with lower price supports. Lower budgetary costs do not necessarily mean greater market orientation.
Price supports shift the costs from taxpayers to consumers.
It draws together available work on the trade effects of the programs laid out in Chapter I, including effects on developing countries. Current policies tend to increase the instability of international prices. Greater international price variations are a necessary corollary of policies which eliminate internal price variations through varying imports in line with fluctuations in domestic production. Except for rice, the general effect would be to increase prices somewhat. Part of the analytical argument of our report is that if the trilateral countries acted in unison to reduce their market interventions, the presumed adverse effects of liberalization would be significantly reduced.