Neoliberal dogma trumps sound development policy

If I told you that the government of El Salvador has created a program to support and improve the activities of small farmers by providing them with improved crop seed, while simultaneously strengthening a local seed sector to continue offering for direct purchase by farmers once they no longer need government help, you'd probably say it sounds like good development policy.  And you'd be right, especially considering that the nationwide program only costs $30 million a year, and is funded without help from the US. 

But this program drew the ire of the US Trade Representative, a government agency that advances the interests of US businesses.  It claimed that by favoring Salvadoran seed companies, the government was not playing fair.  This is understandable from an agency designed to improve US business conditions abroad.  The problem is that the overall US government apparently used this relatively minor trade issue to hamstring $277 million of non-agricultural aid to El Salvador through the Millennium Challenge Corporation, another US government agency that develops investment plans with host countries to leverage a joint commitment for good development results. 

My reading of the affair is that the pursuit of an neoliberal dogma of absolute free trade admitting no exceptions, even for a small government procurement in a small country, overrode sound development thinking that would have seen the obvious merits of the Salvadoran government's policy.  To put it in numerical terms, an abstract ideological dispute over $30 million spent by El Salvador blocked up $277 million of US aid, and now in part because of a long history of US interventions against Salvadoran development and prosperity, we're in the middle of a refugee crisis that will most likely cost the US government almost $3 billion in emergency funding.  Only in neoliberal dogma can $30 million of someone else's expenditures turn into $3 billion of US tax liability, all for the sake of a few big US seed companies that won't miss El Salvador's business anyway!

Luckily, due to popular pressure in both El Salvador and the US, the US government seems to have backed down from its hardline stance, and the MCC compact will move forward as planned.  As for the emergency US spending to handle underage refugees, that will still be necessary.  But the roots of that crisis go far beyond the seed procurement impasse.