AWARENESS
trade in detail
The international trade system stands at a crossroads. In one direction lie politically difficult and complex choices concerning equity, sustainability and poverty eradication which could make the trade system work for people and the environment and also, in the long run, save it. The other direction offers clearer-cut, perhaps easier options to stick with the status quo ignore complex problems and pursue trade liberalisation as an end in itself. However, this could exacerbate current disaffection and bring the trade system to its knees.
The international trade regime needs fundamental change if it is to succeed and benefit us all. The world needs international trade rules, but to date these have favoured the narrow commercial interests of the most powerful trading nations and the largest corporations, at the expense of the wider public interest and smaller economic enterprises. In order to rebalance the global trading system, international trade rules and institutions must take their place within the broad system of international agreements aimed at sustainable development, poverty eradication and the promotion of human rights, and recognise the importance of local and regional trade as an engine for sustainable development and poverty eradication.
There is an increasing gap between many of the stated objectives of the world trading regime and the global reality of growing inequalities and environmental degradation. The benefits of the international trade system have gone to those who already have the most, while many of the poorest have failed to benefit fully and some have even been made poorer.
The WTO trade agreements are seriously flawed because they largely prioritise liberalisation and deregulation in the private interest over national (and potentially international) regulation in the public interest. Ironically, in areas where certain 'liberalisation' policies could potentially have a range of social and environmental benefits (e.g. in policy areas such as export support, fisheries subsidies, market access for textiles and the flexible use of intellectual property rights), exceptions have been made in practice and the trade system has again been used to benefit the few, rather than the many.
A stated objective of trade policy is to improve standards of living. Yet the income gap between rich and poor both between and within countries has reached record levels and continues to widen. Governments have signed up to the goal of halving income poverty by 2015, but this target will be missed unless the poor derive a greater share of the benefits from trade. Improving equity must be central to future trade policy formulation.
International rules must take account of the needs of poor countries and people, and allow for protection and intervention, where necessary, in order to build strong domestic economies and to promote important national development objectives such as food security, regional development, resource conservation or support for the livelihoods of poor communities. Trade policy must be designed to prevent the poorest from bearing the majority of adjustment costs, and to assist them in taking advantage of new market opportunities should they choose to do so. The ability of poor people to participate in markets on beneficial terms depends crucially on public investment and the redistribution of productive assets so that poor people are able to produce their way out of poverty.
To find out more, visit www.tjm.org.uk