The right to choose trade policies
Poor people have the right to benefit from trade. Poor countries must be able to choose economic policies, including trade policies that work to reduce poverty. They need the freedom to help support and protect their vulnerable enterprises and traders in the most appropriate way. These policies should not be based on the `advice’ of the rich. They should be decided by the communities affected, based on evidence and experience and suited to the local context.
This is Trade justice – governments choosing and designing their own trade policies to reduce poverty.
Some concrete examples
No country became rich without long periods of helping and protecting their vulnerable enterprises and traders until they were strong enough to compete. However, the current rules and institutions of world trade deny poor country governments these rights. This is in spite of the fact that most successful sectors and enterprises in poor countries today are those that have used flexible, managed trade policies. Some recent examples are:
Many East Asian countries reduced poverty this way, through strategic government intervention in trade, as well as free market competition. This was the case for South Korea in the 1960s and 1970s.
Honduras – In 2003, under pressure from local rice growers and domestic processors, the government raised the tariff on imported processed rice. They also drew up an agreement whereby local processors are required to buy local rice before imported rice. Local farmers in Honduras have started to plant rice again and consumers have not faced price increases.
Mauritius – Mauritius has been successful both in terms of economic growth and poverty reduction. From 1975 to 1999 growth per capita averaged 4.2%, income inequality fell and life expectancy increased by 10 years. The IMF ranked Mauritius as one of the most protected countries in the world in the 1990s. The key to success was a targeted trade policy, giving incentives to exporters and protecting the domestic labour force from competition.
What Trade Justice means around the world
Trade Justice is not a one-size-fits-all solution.
It will involve changes in the policies of rich country governments. It will certainly involve these governments eliminating subsidies they pay their farmers, which are used to reduce the price of exported goods, which then flood poor country markets.
It will also mean more rights for poor country governments to intervene to make trade work to reduce poverty. Below are some of the rights that Trade Justice campaigners across the world are fighting for poor country governments to have.
“The international trading system was devised by the rich to suit their needs; it ignores those of the poor”
– Pope Paul VI
“Trade justice for the developing world and for this generation is a truly significant way for the developed countries to show commitment to bringing an end to poverty”
– Nelson Mandela
“The way the WTO works is like putting an adult in a boxing ring with a child. The WTO assumes all countries are equal – but they are not. The WTO should be helping to make countries more equal”
– Moses Tekere, Trade & Development Centre, Zimbabwe
“We want rules. But we want fair rules”
– Martin Khor, Third World Network
“It is not the kings and generals that make history, but the masses of the people”
– Nelson Mandela