 Trade Justice |
Issue 104 |
Trade Justice
A Way out of Poverty
Imagine a game of Snakes and Ladders between two children where one player can make the rules. That player, no doubt, would make sure that they could go up the snakes as well as the ladders. They would make the other player go down the ladders as well as the snakes. This of course is not fair.
So that the children's parents do not get suspicious and intervene, the rule maker occasionally lets the other player go up a ladder, especially when the parents might be watching. In this way the unfair rules can be maintained without challenge. The rule maker may even be praised for their generosity.
The “game” of international trade is played in much the same way with the rich countries setting the rules. They say that they are in favour of free trade and then do the opposite especially when it comes to agricultural products. They set the rules to “free trade” then pay their own farmers billions of dollars every year to give them an advantage over the producers in the developing countries.
This means that those in poor countries cannot fairly compete on the world market and thus are deprived of a real opportunity to work themselves out of poverty. Poor countries are effectively locked out of the world market for many agricultural products just so that farmers in the rich countries don't have to compete against more efficient farmers in the developing world.
At the same time, these same rich countries give aid to the poor countries. It is estimated by the United Nations that the poor countries lose around US$700 billion each year because of the unfair trade rules. This is about 14 times what they receive each year in aid.
So the rich countries give with the one hand and take back 14 times as much with the other.
So while the rich countries are being praised for their “generosity” as aid donors they maintain a system that benefits themselves much more generously. Farmers in poor countries won't need “generous” handouts if they can compete fairly on world markets.
Brazilian cotton farmers last year brought a case to the World Trade Organisation (the organisation that is meant to keep the trade rules fair) complaining about the US$3.2 billion paid in subsidies to US cotton farmers. The Brazilians along with some West African cotton producing countries said that this was not fair. The World Trade Organisation (WTO) agreed.
The US did not, however, stop the payments. They appealed the decision. Once again, the WTO this March declared the payments to be illegal under the trade rules. The US still has not stopped the payments. Meanwhile the two million people in an African country like Burkina Faso who depend on cotton for their livelihood suffer at the expense of the 20,000 cotton farmers in the US .
The situation is the same for many other cotton producing countries in West Africa as well as in Brazil . What do these countries do while the US decides whether to obey the ruling of the WTO or not? They will have less money to pay for their children's education or for health services.
This story is repeated in a similar way for milk producers in Jamaica , for sugar producers in South Africa and Thailand , for Asian rice farmers, for Central American coffee producers, for maize growers in Mexico , for African Cocoa farmers and for countless others in poor countries around the world.
Not only do the rich countries pay their own farmers subsidies to produce crops but they also tax imports of these crops from other countries including the poor countries, so that they will not be able to compete with the commodities produced at home. Down the snake, down the ladder and miss a turn.
This, however, is a game of life and death for millions of the most vulnerable people in the poorest countries in our world and the rules need to be changed.
If Africa, East Asia, South Asia and Latin America increased its share of world trade by just 1%, 128 million would be freed from poverty. In Africa alone, this one percent increase would result in a US$70 billion increase in the continent's income, 5 times what it receives in aid.
The Global Week of Action for Trade Justice begins on April 10 th .
Religion/Social Sciences
1. Go to http://www.christianaid.org.uk/campaign/
trade/highway/launch5.htm to view a presentation of the “trade highway” where the road rules favour cars over people. What are the consequences? What problems are caused by inappropriate rules, rules that have the wrong aim? Discuss in small groups and present your conclusions to the rest of the class.
2. Complete the quiz. What was the most shocking thing you discovered from completing the quiz?
3. Download worship materials for The Global Week of Action for Trade Justice suitable for use in schools and churches at http://www.christianaid.org.uk/campaign/
weekofaction/gwa_worship_guide.pdf
4. Go to http://www.christianaid.org.uk/campaign/trade/
basics.htm scroll down to “Top 10 Facts” and answer the following:
- How much is international trade worth?
- How much of this goes to poor countries?
- Has the share received by the poor countries increased in the last 20 years?
- How much do the rigged trade rules cost the poor countries?
- Three individuals in the world are wealthier than how many people in the poorest countries?
- How low are the prices for the exports of the poorest countries? What does this mean for their incomes?
- Which countries dominate the trade negotiations?
5. Go to http://www.theage.com.au/news/Business/
World-Bank-for-Wolfesohn-read-Wolfowitz/
2005/03/17/1110913697793.html to find out who the new head of the WTO is going to be. Who appointed him?
Why is his appointment controversial?
6. There are several simulation games available showing the unfairness of world trade. These are valuable experiential learning experiences as long as they are thoroughly debriefed. Go to
http://www.wcc-coe.org/wcc/what/jpc/
world_trade.html
http://www.oxfamamerica.org/pdfs/
mtf_soccer_game.pdf http://www.economics.ltsn.ac.uk/showcase/
sloman_game.htm
http://www.globalfootprints.org/pdf/
fairtradenum56.PDF for a variety of approaches and levels of difficulty. The last one listed is suitable for younger students.
7. Go to http://www.newint.org/issue374/facts.htm to research the international trade system and how it has developed over the last 40 years. Answer the following:
- What percentage of world merchandise trade is made up of minerals and agriculture?
- What percentage of world trade does the developing world have? Is this more or less than in 1960?
- What has happened to Africa 's share of world trade since 1960?
- What has happened to the rate of growth of exports from poor countries compared to rich countries?
- Which countries dominate the trade in services?
- List some of the trade barriers that developing countries face when trying to sell their produce on world markets.
- What do you notice about the exports of African countries like Chad and Mauritania ?
- Has Mexico benefited from the free trade agreement with the US ?
8. Go to http://www.oxfamamerica.org/whatwedo/campaigns/
agriculture/background/
oacontent.2004-11-30.130859200 for a case study of the effects of the unfair trade system on cotton growers in Mali ( West Africa ).
- What percentage of Mali 's population is engaged in growing cotton?
- How important is cotton to Mali 's exports?
- How much extra would the crop have been worth if the trade rules had been fair?
- Why does Mali need to keep on exporting cotton even when the price is too low?
- What is the effect on individual farmers of the poor price received for their cotton crop?
9. Go to http://www.oxfamamerica.org/whatwedo/
where_we_work/west_africa/news_publications/
mali_cotton/feature_story.2004-12-15.0354385986 to find out what the profit is for a typical cotton farmer in Mali .
10. Play the “cowsequences” game to compare the life of a farmer in Jamaica with a British farmer at http://www.oxfam.org.uk/coolplanet/
milkingit/activities/cowsequence_flash.htm
11. Complete the quiz at http://www.oxfam.org.uk/coolplanet/milkingit/ to test your knowledge of the dairy industry.
12. Go to http://www.pressureworks.org/play/photo/index.html to view the human face of the unfair trade rules
Economics
Discuss the effects of tariffs and subsidies on international trade.
How do subsidies paid to producers encourage over-production?
What is the effect of the imposition of an import tariff on the local price and quantity supplied by local producers?
What will be the effect on prices paid by local consumers of a tariff on imported goods?
What is dumping? How does it affect local producers?
For more teaching and learning activities on the issue of trade justice see http://ozspirit.info/2003/52bg.html , http://ozspirit.info/2003/65bg.html and http://ozspirit.info/2003/54.html
Parish Community and Social Justice Groups
E-mail President Bush telling him to implement the recent WTO ruling at http://www.maketradefair.com/en/
index.php?file=emailbush.php
Tell Prime Minister Tony Blair that you are voting for trade justice. Britain is hosting the G8 countries this year as they discuss trade issues. Let him know how we feel in Australia . Go to http://www.pressureworks.org/dosomething/
act/vote_form.html to cast your vote for fair trade.
Using the information and guidelines at http://www.acfid.asn.au/fairshare%20folder/
lwgtwojan05.pdf write to your local Member of Parliament or to the Prime Minister to demand action on Trade Justice.
For more ideas about actions to promote fair trade go to http://www.oxfam.org.au/campaigns/mtf/coffee/
takeaction/index.html e.g. buy fair trade tea and coffee for your lunch room at work.
Sign the global petition in favour of fair trade at http://www.maketradefair.com/en/index.htm
Support Force Ten's Simply Sharing Week. For more details go to http://www.forceten.org.au/
Go to http://www.socialjustice.catholic.org.au/content/ publications/social_justice_papers.html to order a copy of the Trade Justice issues paper by Sr Suzette Clark and Dr Patricia Ranald