Make Trade Fair
THE GREAT TRADE ROBBERY
Rich world swindles millions Global wealth divide widens to all-time high
TORONTO. Oxfam accuses the G8 countries of robbing the poor of $160 billion a year by abusing the rules governing world trade, thus denying millions of poor people their best escape route from poverty. A new Oxfam report frames the debate for the Kananaskis summit.
“For every dollar we give in aid two are stolen through unfair trade,” said Robert Fox, Executive Director of Oxfam Canada. The G8 countries have rigged trade rules, blocking trade’s potential to wipe out poverty and instead increasing the global wealth divide.
The campaign, targets politicians, corporations and the public at large to transform trade into part of the solution to world poverty, instead of part of the problem.
“People are angry that the promise of globalization has turned out to be a sham,” Mr. Fox said. “Oxfam will seek to channel that anger into pressure for changing the rules.” People can join the campaign and take part in virtual protest by visiting: www.maketradefair.com.
Oxfam’s report “Rigged Rules and Double Standards,” shows that 128 million people could be lifted out of poverty if the rules allowed Africa, Latin America, East Asia and South Asia each to increase their share of world exports by just one percent. In Africa it would generate over $100 billion – five times what the continent receives in aid and debt relief.
However, rich world hypocrisy and double standards stop this from happening. The G8 countries (especially US, EU, Canada and Japan) and big corporations rig the rules by:
- Subsidizing agribusiness to the tune of $1.5 billion a day. Surpluses are dumped onto world markets, depressing prices and destroying local markets in poor countries.
- Using the IMF and World Bank to pry open poor countries’ markets with little regard to social consequences.
- Taxing goods from poor countries at four times the rate of goods from rich countries.
- Profiteering off falling commodity prices that condemn many poor economies to failure.
- Allowing corporations to ride roughshod over internationally recognized workers rights.
Oxfam called on Canada to stop forcing poor countries to open their markets, to stop agricultural dumping and to give the poorest countries fair access to the Canadian market.
For more information or a copy of the report, please contact:
Mark Fried, Communications
613-237-1698, ext. 231, cell: 613-850-9723
or visit www.maketradefair.com
Wealth divide at all-time high
In the last decade the world’s poorest five per cent lost almost a quarter of their real income while the top five per cent gained 12 per cent. Trade is one important factor in this widening gap. For every dollar generated by world exports only three cents goes to low-income countries.
The report ranks Canada third in Oxfam’s new “Double Standards Index,” which compares free-trade talk to protectionist practice. The European Union tops the list. Its dumping of surplus milk onto the Jamaican economy has all but ruined the local dairy industry. Second-ranking United States has dumped subsidized rice on Haiti, forcing thousands of poor rice farmers off the land. In Haiti’s rice growing area child malnutrition is now among the most severe in the country.
IMF and World Bank
Through its influence at the International Monetary Fund and the World Bank the rich world obliges the poor world to open its markets with no regard to the social consequences. Yet its keeps its own markets tightly shut. In this race the weakest have to jump the highest hurdles. Rich countries tax imports from poor countries at four times the rates charged to rich countries.
Aid debt and trade
For every dollar of aid to the poor world two dollars are swindled out of the poor world through unfair trade. Africa is of particular concern. A one per cent increase in world exports for Africa is worth a staggering fives times the amount it receives in aid and debt relief combined. Yet Africa is increasingly sidelined from any benefits from trade.
Import tax hikes
Many poor countries are locked into only producing the raw food and materials we consume. The moment they begin to process these goods, therefore getting a higher price, they face import tax hikes at rich world ports. Canada taxes processed food as much as 13 times higher than unprocessed products. Thirty per cent of all tariff peaks applied by the EU protect the food industry. In the US, the food industry accounts for one-sixth of all tariff peaks, including orange juice (30 per cent) and peanut butter (132 per cent). Forty per cent of all Japanese peak tariffs protect the food industry, affecting a wide range of products from cocoa powder and chocolate to canned meat and fruit juices.
The commodity crisis
Famine has struck coffee growing regions of the world due to record low prices. In 2000/01 poor countries sold nearly 20 percent more coffee than in 1997/98, yet were paid 45 per cent less. Had they sold at the 1997/98 price, they would have been US$8 billion better off. This means less money for farmers and cutbacks in spending on health and education. And it’s not only coffee. From 1996 to 2000 Ghana increased cocoa production by almost a third but was paid a third less.
Corporations and workers’ rights
Large transnational corporations are powerful players in the globalized economy. Two-thirds of all trade takes place within such companies. They are a major influence on labour standards in poor countries, both directly through the people they employ and through sub-contractors.
The IMF and the World Bank trumpet export led growth in countries like Mexico, Bangladesh and Honduras. However, the benefits have not trickled down to the poor. Their economic growth has been spearheaded by special low-wage ghettos for simple assembly of imported parts. The wealth they generate is spirited out of the country or left in the hands of a tiny minority.
Biased WTO rules
Many of the rules of the World Trade Organization protect the interests of rich countries and powerful corporations, while imposing huge costs on developing countries. This bias is most evident in patent rules that limit access to medicine. The new WTO issues of investment, government procurement and competition rules risk widening the global wealth divide.
Women on the front line
Women workers are the super-exploited in the new globalized economies. Women now make up one-third of manufacturing workers in developing countries but they earn about three-quarters of their male colleagues. They may earn more money than before but they have fewer rights, less time to care for the family and carry a greater burden. In China they are forced to work 12-hour days in appalling conditions. In the sweatshops of Bangladesh they are denied the right to join a union. In the flower exporting market gardens of Colombia they face toxic working conditions and compulsory pregnancy testing.
Oxfam is calling for a radical reform of the international trading system so that trade can become an engine for poverty reduction.
- End the use of conditions attached to IMF-World Bank loans which force poor countries to open their markets regardless of the impact on poor people.
- Improve market access for poor countries and end the cycle of subsidized agricultural over-production and export dumping by rich countries, without demanding further concessions of developing countries.
- Create a new international commodities institution to raise prices to levels consistent with a reasonable standard of living for producers, and change corporate practices so that companies pay fair prices.
- Establish new intellectual property rules so poor countries can afford new technologies and basic medicines, and farmers can to save, exchange, and sell seeds.
- Prohibit rules that force privatization of basic services that are vital for poverty reduction.
- Enhance the quality of private-sector investment and employment standards.
- Democratize the WTO to give poor countries a stronger voice.
- Change national policies on health, education, and governance so people can develop their capabilities and participate in markets on more equitable terms.