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DEVELOPMENT: Free Trade Enslaving Poor Countries
By Sanjay Suri
LONDON, Mar 20, 2007 (IPS) - The new free trade agreements being signed up
between rich and poor countries are proving far more damaging to the
poor than anything envisaged within WTO talks, Oxfam said in a report
Tuesday.
"Poor countries are being forced into very deep tariff cuts," Emily
Jones, author of the Oxfam report 'Signing Away the Future' told IPS.
"These are often being reduced to zero under reciprocal so-called free
trade agreements they are being forced to sign with rich countries."
That means poor countries are having to open up their markets to
subsidised agricultural products from places like the EU, she said.
There are already more than 250 regional and bilateral agreements in
existence and more under negotiation, the report says. Regional and
bilateral trade deals now govern more than 30 percent of world trade,
and 25 developing countries have now signed free trade agreements with
developed countries.
"An average of two bilateral investment treaties are signed every
week, the report says. "Virtually no country, however poor, has been
left out."
The agreements undermine moves to development, the report says.
"In an increasingly globalised world, these agreements seek to benefit
rich-country exporters and firms at the expense of poor farmers and
workers, with grave implications for the environment and development,"
it says.
The United States and the EU are pushing through rules on intellectual
property that reduce poor people's access to life-saving medicines,
increase the prices of seeds and other farming inputs beyond the reach
of small farmers, and make it harder for developing-country firms to
access new technology, the report says.
Governments are sometimes showing themselves powerless against such moves.
"Some developing countries find themselves between a rock and a hard
place," said Jones. "Many are signing up to these so-called economic
partnership agreements for fear of losing preferences," Jones said.
Many of these countries have been offered export preferences in return
for dropping tariffs against imports from developed countries.
The North America Free Trade Agreement (NAFTA) has brought 1.3 million
job losses in Mexico in ten years, Jones said. Increased exports to
the United States have failed to generate growth, and some studies
show that the real wages in 2004 were less than in 1994, Jones said.
The rules on liberalisation of services in such agreements threaten to
drive local firms out of business, reduce competition, and extend the
monopoly power of large companies, the report says.
"When Mexico liberalised financial services in 1993 in preparation for
NAFTA, foreign ownership of the banking system increased to 85 percent
in seven years, but lending to Mexican businesses dropped from 10
percent of gross domestic product (GDP) to 0.3 per cent, depriving
poor people living in rural areas of vital sources of credit."
Governments in developing countries usually come under strong
political pressure to sign up to such deals, Simon Ticehurst from
Oxfam in Bolivia told IPS. "But a lot depends also on the type of
development models that governments present to their people," he said.
"Colombia and Peru have been signing up to these agreements. Others
are more reluctant. "You now have a small country like Bolivia and
many new governments across Latin America beginning to challenge the
logic of free trade agreements."
Oxfam has demanded the following:
- Recognise the special and differential treatment that developing
countries require in order to move up the development ladder.
- Enable developing countries to adopt flexible intellectual-property
legislation to ensure the primacy of public health and agricultural
livelihoods and protect traditional knowledge and biodiversity.
- Exclude essential public services such as education, health, water
and sanitation from liberalisation commitments.
- Recognise the right of governments to regulate the entry of foreign
investors to promote development and the creation of decent
employment, and include commitments to enforce core labour standards
for all workers.
- Ensure mechanisms for extensive participation of all stakeholders in
the negotiating process, with full disclosure of information to the
public, including the findings of independent impact assessments.
(END)
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