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Monday, March 27, 2017
Report explodes myth of free trade
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¬†Twenty years of free market dogma, pushed on poor countries by the rich, has failed developing countries, by increasing poverty amongst the world's poorest people. It is time to explode the myth of "free" trade, says Christian Aid. In a defining report, just published, the agency calls for an end to the reckless, doctrinaire approach to global trade now being pushed by rich governments and bodies like the WTO and World Bank. Millions of poor people's lives have already been made much tougher by 'free-for-all' liberalisation, says the report: Taking Liberties: Poor People, Free Trade and Trade Justice. It concludes that Tony Blair and other rich world leaders must now move away from the ideological pursuit of 'liberalisation at any cost' to a more pragmatic approach to trade. Christian Aid is demanding an immediate halt to Economic Partnership Agreements (EPAs) currently being negotiated between the EU and 77 former colonies. These will certainly damage the world's poorest markets still further, the report states. Using examples of alternative practice from around the world, the report shows that targeted, state intervention ≠ a heresy in current economic debate ≠ is a vital ingredient in helping fledgling industries grow while preventing them from being steamrollered by rich, high-tech Western competitors. Christian Aid's call for protection of some key sectors is highly significant. It is the first time that a major aid agency has challenged the global orthodoxy of free-for-all liberalisation in such a comprehensive way. Since the late 1980s, when debt ridden poor countries were forced to accept free trade economic reforms in return for new loans, 'protection' has became a dirty word as an unrestrained ideology of ultra liberalisation has taken root. But, according to Andrew Pendleton, Christian Aid's head of trade policy, it is time for the term to be reclaimed. "In society we protect the young and the frail so it is high time we allowed developing countries to protect their young local industries from the ravages of an unfettered market," Pendleton said. "Protecting the vulnerable may not be a message that appeals to free market ideologues ≠ particularly amongst those giant corporations who use it as a cloak of respectability while they pillage developing economies. "But after 20 years where free trade has failed to bring growth to developing countries and wealth to poor people it is time to move on. We must now devise a trading system that protects and discriminates in favour of the world's most vulnerable traders - rather than rewarding those who are already rich and powerful,' he said. "The tragedy is that institutions like the World Bank and WTO are preventing these success stories from being replicated elsewhere." In a move that would signal the UK government's willingness to adopt a more pragmatic, less ideological economic line, Christian Aid is calling on Mr Blair to block current EU plans for new free trade agreements that threaten poorer countries fragile markets. The EU is set to force poor countries to open their markets in return for access to European markets. "The notion that poor countries will have to pay for free access to Europe's markets by opening up their own markets is absurd and dangerous," Pendleton said. "Many EU industries still benefit from vast subsidies, a skilled work force and a high degree of technical expertise. These are huge advantages and to allow the EU to wade into poorer countries' markets is like pushing an untrained, lightweight boxer into the ring with a professional heavy weight and expecting a fair fight," he said. Christian Aid's view is echoed by the EU's own advisors, the accountants PricewaterhouseCoopers. Their internal report for the EU, which was obtained by Christian Aid, concludes that the impact of EPAs on poor communities could be 'devastating'. Pendleton says the developing world is not asking for anything that rich countries haven't had in the past. "After all," he said, "the Western World would never have got to the stage they are now at without having employed various forms of protection over the centuries. Even today they are protecting their industries with subsidies. "The UK government cannot continue to call for trade to work for poor people whilst pushing dogmatic free trade policies on the developing world," concludes Pendleton. "If they genuinely support the call for trade justice the rhetoric needs to be backed up with concrete policy changes." Copies of the report can be downloaded from:
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