Other countries that subsidise farming less will ask the EU to throw away its entire price-fixing, market-bending and export-subsidising rulebook.
"The ability of net exports to subsidise wasteful investment will diminish – perhaps quite rapidly.
"The liberalised labour market contributed to high exports, which subsidised this extremely wasteful investment by the Chinese government," said Victor Shih of Northwestern University in Chicago.
Over time, London's financial relationship with the rest of the country would change, and less of the tax raised in London would be exported to subsidise public spending elsewhere.
The EU deters imports by raising tariffs, and it clears its sugar mountains by subsidising exports.
Subsidising exports may boost demand for domestic production, leaving the country better off unless, of course, every country does the same, in which case no one gets an advantage.The World Trade Organisation discourages protectionism by permitting a country hurt by another's subsidies to raise tariffs in retaliation.
US President Barack Obama has announced a trade complaint against China, accusing Beijing of illegally subsidising exports of cars and car parts.
The habit of subsidising the export of surplus food, a favourite of the French, is pernicious for poor countries, since it undercuts local markets.
The European Union is the biggest user, subsidising its exports, mainly of dairy products and sugar, to the tune of €2.8 billion ($3.4 billion) a year.
The bill's drafters reckon that China and similarly energy-thirsty countries are in effect subsidising their exports by allowing their firms to dodge costly environmental standards.
That country would accomplish nothing by raising tariffs.The world would be better off without subsidised export credits.
