This time the culprit is Tyler Cowen. In his column for the New York Times today, Cowen argues that freer trade in food commodities such as rice would boost global supplies and help reduce prices. He is probably right about the first, but not about the second. The effect of freer trade on domestic food prices depends on whether a country is a food importer or exporter. Freer trade would reduce prices of food (relative to other prices) only in countries that are food importers. Food exporters would experience a rise in the relative price of food, and there is simply no way of escaping that reality.
Trade works by relieving the relative scarcity of goods. The key here is the term "relative." Food importing countries are food scarce countries, and as they open up to trade, the relative price of food falls. But if you are Thailand or Argentina, where other goods are scarce relative to food, freer trade means higher relative prices of food, not lower. And all the induced efficiency benefits and short- vs. long-run effects that Cowen talks about have no bearing on this conclusion: in the end some countries have to be net importers, and others net exporters.
http://rodrik.typepad.com/dani_rodriks_weblog/2008/04/the-free-trade.html