WSSD: FAIR TRADE NEEDS BOTTOM-UP PARTICIPATION

WSSD: FAIR TRADE NEEDS BOTTOM-UP PARTICIPATION

Patrick Burnett
Fahamu

JOHANNESBURG – Liberalised international trade would not lead to sustainable development in Africa, with World Trade Organisation (WTO) rules written in a way that benefited rich countries at the expense of the poor.
Speaking during a meeting to discuss the compatibility of trade with sustainable development at a parallel event held during the World Summit on Sustainable Development (WSSD), speakers concluded that a massive overhaul of international trade would be needed for sustainable development to be achieved.
Malcolm Damon, from the Economic Justice Network in Southern Africa, argued that current trade could never lead to sustainable development.
He said the statistics “speak for themselves”, quoting figures which showed that industrial countries, which form 15 percent of the world population, had 68 percent of the world export trade.
In sub-Saharan Africa, 11 percent of the population had only 1.6 percent of the international trade.
“For sustainable development to work the bottom end of the market would have to expand their involvement in world trade,” he said.
Dealing with the WTO, Damon said the rules of the WTO had been written in such a way that they benefited rich countries at the expense of the poor. For example, agricultural subsidies had been one of the “sticking points” at the WSSD. The EU subsidised farmers at one billion dollars a day and according to the rules of the WTO these countries should faze out these subsidies to create more balanced trade. However, the rules of the WTO said that in the meantime countries without subsidies could not implement their own subsidies.
Damon said: “The rules of the WTO encourage and entice developing countries to export raw materials to the developing industrial world where in most cases it is manufactured and resold to developing countries.”
In addition, global trade inequities manifested themselves in the tariff system, with tariffs on raw materials held at low rates. However, once value was added, tariffs drastically increased. For example, tariffs on cocoa producers in Africa were low, but once turned into chocolate rocketed to 27 percent. Therefore, producing chocolate in an African country for export was “virtually impossible”.
“It is clear that the rules of the WTO want to use Africa as a basket to extricate raw materials,” said Damon.
Jessica Wilson, from the Environmental Monitoring Group, said there was “no doubt” that the institutions that managed world trade were set up for those with powerful interests.
While the logic dictated that trade would lead to the trickle down effect of economic development that would eventually help the poor, the reality was that this system was leading to increased poverty, environmental degradation and marginalisation of communities.
Wilson said the “entire economy” was skewed towards producing for rich people. This was an unsustainable approach that needed to be redefined.
“We need to move towards an economy of sustainable production and consumption,” she said.
Larry Goodwin, from the Africa Faith and Justice Network, a Washington-based pressure group, said the core principles that defined the policies of the WTO were profit and privatisation. Goodwin said the trading system was one of crude competition for material gain with few or no rules in pursuit of the accumulation of wealth.
In this system all rights were subordinate to profit and the only accountability was to shareholders and managers.
“How can such an extreme system of wealth coexist with democracy?” asked Goodwin, adding that sustainable development was the opposite of this system because it placed people at the centre of the system.
“The economic system should be accountable to the community and the public sector - not the shareholders and managers,” he said. – ENDS

* See http://afjn.cua.edu for the Africa Faith and Justice Network’s five principles for a more balanced trading system.