Fair Trade is still a long way off
August 3, 2004 4:03 PM
By Sarah Teather MP in Asian Voice
By Sarah Teather MP in Asian Voice
The Lib Dems are fighting for fairer trade
Two apparently unconnected events have occurred in the last few weeks that may in the future be closely linked to each other.
The floods in Bangladesh and the 'agreement to agree' by the 147 members of the World Trade Organization could be seen as two sides of the same story. The aim of the deal reached in the WTO in Geneva this week is to reduce barriers to trade, especially on agriculture, on which western countries spend $1billion every day in subsidy to their farmers (more than the entire GDP of sub-Saharan Africa). If these subsidies can be reduced or even eliminated, farmers in the developing world will gain as their products, which they can make more cheaply, can be sold in developed countries. Nations like Bangladesh could see their incomes rise, which could pay for better flood defences and more help for their citizens in times of crisis.
I recognise that all this is still a relatively distant dream, however. What the WTO agreed was merely a framework for discussion. The real work is yet to be done, and we probably won't see the final deal until 2006. Even then there will be a timetable that only slowly reduces trade-distorting barriers and subsidies. Nonetheless, it is a start.
The Liberal Democrats have consistently campaigned to get rid of agricultural subsidies. Every dairy farmer in the EU receives $2 a day per cow, higher than the income of nearly half of humanity. This money acts to impoverish Third World producers who cannot compete against such heavily subsidised production. The subsidy and higher cost of production adds an estimated £16 per week to the cost of our food. Agriculture accounts for about 27% of GDP and export earnings in developing countries, and 50% of employment, compared to 2% of employment in the UK. If they were allowed to compete fairly, they would be able to export to Western countries at a competitive price giving them huge boosts to employment and saving us money.
The Liberal Democrats would like to see the WTO go even further. We have proposed allowing countries with genuine medical needs to buy or manufacture drugs without having to pay royalties to drug companies. We want support for developing countries so that they can be represented by adequate and permanent delegations at the WTO HQ, and we want to open up its decision-making to scrutiny by Governments and NGOs.
I would also like to see environmental objectives- such as the 'polluter pays' principle - incorporated into international trade agreements and a minimum floor of global labour standards implemented. This would build sustainable development into globalisation and stop the 'rush to the bottom' where companies locate in low-wage countries which often have the worst conditions for workers.
In the short term, Bangladesh needs aid. In the longer term, however, it needs fair and sustainable trade. Only the Liberal Democrats are arguing for this at the moment - and until we get it we won't shut up.
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