For millions of poor people trade should be providing a route to a better life. Yet a combination of outdated ideology and blatant power politics are conspiring to achieve the exact opposite.
Let’s not beat around the bush - international trade rules are crippling poor countries.
Safety first
Traditionally, governments around the world have intervened to help promote the benefits of trade, and safeguard their people from its dangers.
‘Poor countries are poorer now than they were in the 1960s’
Tariffs can be used to protect domestic markets against overwhelming competition from abroad.
All the rich developing countries of today did this while they were developing in the 19th/early 20th centuries. Modern economic success stories such as South Korea, Malaysia and Taiwan did so in more recent times.
Subsidies can be paid to support local businesses or even entire industries as they find their feet.
However, since the early 1980s the rich world has been pushing a form of trade that means a country's economy is run with as little government interference as possible. In its purest form, free trade, as it is known, would mean an end to all support and protection for domestic businesses.
It is a policy that suits rich countries, whose economies are already relatively strong and competitive. But since the 1980s, the rich have presented free trade as the solution to global poverty, and sought to ensure their poorer neighbours adopt economic policies in keeping with its main tenets. They have done this through:
conditions attached to loans from major financial institutions, the International Monetary Fund (IMF) and the World Bank
trade agreements between two or more countries, such as the economic partnership agreements, or EPAs
agreements made at the World Trade Organisation.
In practice, free trade has provided no such solution. Rather, it has become part of the problem. Poor countries are poorer now than they were in the 1960s.
The policies developing countries are being forced to adopt allow massively wealthy western companies to beat impoverished local businesses into submission.
They deny millions of poor people any kind of sustainable livelihood.
And their governments – bribed, threatened and controlled by the moneymen at the IMF and the World Bank – are powerless to prevent it.
Christian Aid research suggests that Africa alone is $275 billion worse off as a result of the trade policies implemented over the last 20 years or so.
Moving the goalposts
Most staggering of all is that the world’s richest countries still have exactly the kind of policies in place they are forcing developing countries to drop.
The US, for instance, paid its cotton farmers $3.9 billion in 2000/01. Thanks to their government’s generosity – not least in their interpretation of their own trade rules – American growers now dominate the world cotton market, forcing their ‘competitors’ in Mali, Burkina Faso and Chad to the brink.
Then there’s the EU, where every cow receives an average of $800 in subsidies every year. In Ethiopia, average annual income is just $100.
Furthermore, many developing countries have been forced to privatise services such as healthcare, public transport and water.
And it is western companies – who could never dream of such opportunities at home where such services are often still under state control – that are capitalising.
When it comes to international trade, the rich decide what the rules are – and when they choose to abide by them.
Of course, there is an argument for these governments doing right by their own industries, looking after the interests of their own people, and adopting policies that they choose themselves.
We couldn’t agree more. This is precisely what we want for developing countries –and precisely what international trade rules are denying them.
Our demands
The rules that govern international trade must be changed so that poor countries have the freedom to help and support their vulnerable farmers and industries. Trade must be used to help bring an end to poverty – not deepen and prolong it.
The EU must stop insisting that its former colonies open their markets.
The IMF and World Bank must remove all economic policy conditions attached to their loans and debt-cancellation agreements.
WTO agreements must support development rather than promote free trade for the sake of free trade.