Down the river

["Ian Murray" <seamus2001@xxxxxxxxx>]

EU and US selling poor down the river

Oxfam report accuses west of double standards on trade

Charlotte Denny, economics correspondent
Thursday April 11, 2002
The Guardian

The European Union and the United States are robbing the world's poor of
billions of dollars each year in export earnings by preaching free trade
while protecting their own markets, development campaigners claim today.

Analysing western approaches to trade in a report, Rigged Rules and
Double Standards, Oxfam names the EU as the worst offender, followed
closely by the US.

"Governments of rich countries constantly stress their commitment to
poverty reduction," says Kevin Watkins, the report's author. "Yet the
same governments use their trade policy to conduct what amounts to
robbery against the world's poor. Rich countries are fierce advocates of
liberalisation in developing countries, while retaining high trade
barriers against exports from the same countries."

While the anti-globalisation movement has identified trade as a leading
cause of the widening global inequality, Oxfam says that trading rules
are the problem, not trade itself.

"In itself trade is not inherently opposed to the interests of poor
people," the report says. "Well-managed trade has the potential to lift
millions of people out of poverty."

Empty promises


A rapid growth of exports has helped to lift millions out of poverty in
east Asia in the past 20 years, but the benefits are not automatic. "If
countries are able to engage in higher value added trade, as in east
Asia, export growth can contribute to rapid increases in living
standards."

For free trade to work for the poor, rich countries must start backing up
their rhetoric with real concessions to the developing world in the new
round of global trade talks which begin in Doha in November.

"If Africa, east Asia, south Asia and Latin America were each to increase
their share of world exports by 1%, the resulting gains in income could
lift 128 million people out of poverty," the report says.

Oxfam ranks Europe first according to an index which measures
protectionism by the world's biggest trading powers, followed by the US,
Canada and Japan. They impose the highest trade barriers against the
industries of most importance to poor countries: agriculture and
textiles. Oxfam estimates that high tariffs and subsidies cost poor
countries $100bn (£70bn) a year - twice as much as they receive in aid.

The EU and the US spend billions of dollars each year subsidising their
farmers and protecting them from more efficient producers in the
developing world. The surplus cheap produce is then exported to
developing countries, wiping out local farmers' livelihoods.

Oxfam estimates that they export their farm crops at prices more than a
third lower than the cost of production.

"These subsidised exports from rich countries are driving down prices for
exports from developing countries, and devastating the prospects for
smallholder agriculture," the report says. "Some of the world's poorest
countries are competing against its richest treasuries."

By posing as free traders while protecting their own industries, rich
countries are forcing poor countries to open their markets to western
goods, using their control over the World Bank and the International
Monetary Fund. Poor countries which borrow from the IMF and the bank are
forced to cut subsidies and tariff barriers as a condition of receiving
aid.

"Poor countries have been opening up their economies much more rapidly
than rich countries," Oxfam says. "Average import tariffs have been
halved in sub-Saharan Africa and south Asia, and cut by two thirds in
Latin America and east Asia."

In many cases, it says, rapid liberalisation has harmed poor countries by
exposing their industries to competition before they are ready to take on
more efficient producers.

Oxfam is calling on the World Bank and the IMF to stop imposing trade
conditions on their loans, for poor countries to be given better access
of markets, and for a new international body to support the prices of the
primary commodities many developing countries depend on.

A spokeswoman for the British Department for International Development
said the World Bank and IMF were analysing the impact of their trade
liberalisation programmes and funding a pilot study in six countries.
"They have agreed to delay the introduction of measures which are found
to be negative