The need for equitable development to address growing poverty is more critically important now than ever before. The self interest of wealthy nations has drawn the promised free and fair trading system offered in 1999 by WTO, into a decade long catalogue of self interest and a pretence of commitment to free trade. Pascal Lamy’s declaration that the next Ministerial Meeting will take place end 2009, together with the escalating financial crisis, make it likely that protectionism and with it much more intense unfairness in trade will follow. With that, the Millennium Development Goals will become more distant.
Free and fair trade is the engine for growth and it is growth – not aid – that can ensure the achievement and maintenance of these goals in less developed countries. Yet US and European policymakers have opted to hide from the difficult system changes required to fix a failed financial system and instead of pandering to the excess and mistakes of the few whilst sacrificing the many. The growing frustration and widening disparity between developed and undeveloped nations is fuelling terror and nurturing radicals. Is it not time to seek a new solution and instead of spending trillions on crutches for an obsolete system, should not a more sustainable and fair solution be sought?
It is nearly ten years since the WTO promised to announce a new era of global free trade. The 1999 WTO Ministerial Conference did usher in a new era, although not the way the WTO had hoped. The failure of the talks and the riots that caused that failure, highlighted the injustices of world trade to a global audience.
As one participant, Guayana’s Foreign Minister Clement Rohee, exclaimed to the BBC, the richer, developed countries sought to ensure that the version of free trade that resulted from the talks would be theirs.
“We from developing countries were invited to this meeting, and asked to participate, but then treated like delinquents. We didn’t come here to sit outside and drink coffee while the decisions were taken by the richer countries.”
WTO Director General, Pascal Lamy anticipated some progress by end 2008 to the issues first set out in Seattle in 1999. A few weeks ago it became apparent that this was not to be. Apparently US farmers can breathe easy for now in the knowledge that their cotton subsidies are secure for another year of unequal competition with producers from less developed countries.
There are remarkable parallels between colonialism and this more advanced, economic form of the same principle. The colonies are relegated to being low cost producers of raw material whilst the colonists have the privilege and development opportunities of value addition, branding, marketing. It is the same exploitation that took place then that is happening now, regardless of the lofty and kind intentions stated by the perpetrators. You can read more about the reality behind the ‘global quest’ for free and fair trade in Janet Thomas’ book (or the movie that is based on it). For a stronger dose of reality, please read John Perkins’ ‘Confessions of an Economic Hit Man’.
As the world enters a period of severe economic hardship, the consequences of this unfair form of trade are likely to intensify. Fairtrade – the organisation – only whitewashes the structural changes required. In inducing a false sense of comfort amongst consumers, who are essential partners in the struggle for a fair outcome to WTO – they are ironically and unwittingly helping to perpetuate an unfair system of trade.
The present crisis was caused by unsustainable and reckless greed on the part of big business in developed nations. The likelihood of this crisis was obvious although less obvious is the likelihood that the world will learn from it. It was forecast as early as 1864 by no less than US President Abraham Lincoln.
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
U.S. President Abraham Lincoln, (in a letter to Col. William F. Elkins dated Nov. 21, 1864)
In the long run, as the culprits who together caused this crisis are bailed out of the consequences of their own actions, it is the lower income groups in their own countries and on a global scale, the less developed countries, that will pay the price. For most of these poorer nations, the luxury of billion dollar bailouts does not exist.
Economic development is however of much greater urgency than it appears. Meeting basic needs and the UNs Millennium Development Goals are more than purely humanitarian issues. That humanitarian objective alone should be sufficient of course but the wider significance of fair trade, is its catalytic effect on development. That development is more essential today – even for the members of the WTO who are tolerant of poverty and hunger in their obstinate insistence on defending their own interests. Their defence of the structural imbalances in world trade will ultimately work to their own detriment.
Extremism is a by product of under development. Radicalism is the outcome of a potent fermentation of poverty, exploitation, and injustice. If being humane is difficult for the policymakers that are obstructing a fair outcome to WTO, then hopefully the prevention of radicalism through development – an argument that may appeal to their self interest – should be sufficient inducement.
Addressing the basic needs of people is a more effective tool against discontent and thus terrorism. It is also an effective tool against over exploitation of the environment. As my father put it, you cannot talk of conservation to a hungry man who cannot feed his family.
Putting all this into context, would it not be fairer in the long term to allow the miscreants who precipitated the present crisis to suffer the results of their actions, and instead use the trillions of dollars, euros and sterling that are being spent to prop up a failed system, to address more fundamental issues of development?
The logic may not sit well with those that determine such things for it will not help their chances of re-election nor their campaign and personal funding. Hope is however a good thing and as the agitation and awareness surrounding WTO demonstrated, however distant the goal, trying offers a better chance of success than not. Every producer has the right to fair trade, and whilst the WTO and its wealthy influencers posture and delay, lives are being lost due to their inaction. At the same time, a valuable opportunity is also being lost. That of using development, meeting basic needs, as a tool in our global fight against terror, and in our global quest to combat climate change.
As the sun sets on 2008, let’s hope that the fundamental changes needed to establish new rules which will assure genuinely fair trade, will be amongst the New Year resolutions of US and European policymakers and trade negotiators.