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UK INDEPENDENT: Do you want free trade - or fair trade that helps the poor?

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  • Simon mcguinness
    WTO talks collapse and the world goes on as it was before with the rich getting richer at the expense of the poor. Fidel s 20 year old answer is ever more
    Message 1 of 1 , Aug 1, 2008
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      WTO talks collapse and the world goes on as it was before with the rich
      getting richer at the expense of the poor. Fidel's 20 year old answer
      is ever more important: south-south trade. The third world must go it
      alone with its own version of fair trade as a counterpoise to western
      free trade which exaggerates global inequality. SMcG

      Johann Hari: Do you want free trade - or fair trade that helps the poor?

      Friday, 1 August 2008

      Whenever the world trade talks begin to seem like a coma-inducing
      bore-a-thon, I am jolted back to consciousness by the throat-stripping
      smell of rubbish; miles of rotting rubbish. A few years ago I found
      Adelina - a skinny little scrap of an eight-year-old - living in a
      rubbish dump, where this stench made her eyes water all the time. It is
      this smell - and her sore, salty eyes - that hung over the corpse of the
      Doha trade talks this week.

      Just outside the Peruvian capital of Lima, there is a groaning valley of
      trash, and, inside it, hordes of children try to stay alive. Adelina
      spends her days picking through the refuse looking for something -
      anything - she can sell on for a few pennies. Then she returns to the
      few steel sheets she calls home to sleep on a crunchy carpet of cans.
      She has never left the rubbish dump; its walls are the walls of her
      consciousness. She told me three of her friends had recently died by
      falling into the rubbish, or being pricked by fetid needles, or slipping
      on to broken glass. I asked her how often she eats, and she shrugged: "I
      don't like to eat much anyway." She will be 10 now, if she has survived.

      When we juggle the dry, dull statistics of world trade, we are really
      asking if Adelina will remain in her rubbish dump - and if her children,
      and grandchildren, will live and die there.

      The way we - the rich world - organise the world trading system today
      traps Adelina. But it just broke. This week, in Switzerland, the poor
      countries of the world refused to play along with the Doha trade
      negotiations. The mass movement of ordinary people demanding our
      governments Make Poverty History that rose up in 2005 needs urgently to

      To help Adelina, we need to start with a basic question: how do poor
      countries turn into rich countries? The institutions that dominate world
      trade - especially the World Trade Organisation (WTO) - have a simple
      answer: all markets, all the time. They tell poor countries to abolish
      all subsidies, protections and tariffs that protect their own goods. If
      you fling yourself naked at the global market, you will rise. If the
      poor countries disagree, they are cajoled to do as we say.

      There's just one problem: every rich country got rich by ignoring the
      advice we now so aggressively offer. If we had listened to it, Britain
      would still be an agrarian economy manufacturing raw wool, and the US
      would be primarily farming cotton.

      Look at the most startling eradication of poverty in the 20th century:
      South Korea. In 1963, the average South Korean earned just $179 a year,
      less than half the income of a Ghanaian. Its main export was wigs made
      of human hair, and Samsung was a fishmonger's. Today, it is one of the
      richest countries on earth. The country has been transformed from
      Senegal to Spain in one human lifetime. How?

      South Korea did everything we were pressing the poor at Doha not to do.
      Dr Ha-Joon Chang, a South Korean economist at Cambridge University,
      explains in his book Bad Samaritans: "The Korean state nurtured certain
      new industries selected by the government through tariff protection,
      subsidies and other forms of government support, until they 'grew up'
      enough to withstand international competition." They owned all the
      banks; they controlled foreign investment tightly. The state controlled
      and guided the economy to the international marketplace.

      But we are so pickled in market fundamentalist ideology that we have
      blotted out this history - and even our own. Until the Tudors, Britain
      was a backward rural country dependent on exporting raw wool. Turning
      that wool profitably into clothes happened elsewhere. Henry VII wanted
      Britain to catch up - so he set up manufacturing bases, and banned the
      export of wool, so clothes were manufactured here. It's called
      protectionism. His successors kept it up: by 1820, our average tariff
      rate was 50 per cent. Within a century, protected British industries had
      spurted ahead of their European competitors - so the walls could finally
      be dismantled. Dr Chang explains: "Trade liberalisation has been the
      outcome of economic development - not its cause."

      The US did the same. By 1820, the average tariff was 40 per cent;
      Abraham Lincoln then pushed them higher, and they stayed there until the
      First World War. Yet if Lincoln had been at the Doha trade talks, the
      United States of 2008 would have described him as a "fool" who was
      "harming his own people" with "despicable policies".

      Before you make your child work, you give him an education and skills
      and abilities. Before a country pushes its infant industries on to the
      world market, it needs to do just that. Nokia, Samsung and Toyota all
      had to be cushioned with subsidies and tariffs for decades before they
      made a cent. Every one of these companies would have been stampeded to
      death on the open market as a toddler otherwise.

      Yet the reaction to the poor world's rejection of Doha in our media has
      been mostly bemusement. Why have these simple-minded povvos declined our
      medicine? Are they mad? Amy Barry of Oxfam provides a quiet
      counter-balance, pointing out that if the agreement on the table at Doha
      had gone through, Brazil alone would have lost 1.2 million jobs, and
      "most poor countries would have deindustrialised, or never
      industrialised at all".

      From the rubble of Doha, a new world trade system needs to be built - on
      the principle of fair trade, not free trade. If we really want to end
      extreme poverty, then we need to open up the markets of rich countries,
      while allowing poor countries to protect and subsidise theirs. It is the
      recipe that ensured you, today, are not hungry and tilling the fields.

      But the WTO can only ever achieve half of that goal, at best. It is
      built on the market vision that there should be no trade barriers or
      "distortions" anywhere. That means opening up rich markets, which is
      great. But for each step in that direction, they demand a symmetrical
      concession from the poor. It is like telling Bill Gates and Adelina they
      both have to make sacrifices - and Gates won't shift until she does.

      Here in the EU and US, there are hefty forces determined to smother fair
      trade in its cot. The current system works well for corporations, who
      get to wrench open poor economies without any risk of local competitors
      rising up. It works well for some slivers of workers here too, who
      thrive on rich-world subsidies. These forces are regrouping, but their
      system is lying in a crunched-up heap by the side of the road.

      Our governments will always find a way to put these powerful sectional
      interests first - unless we, the people, make them do otherwise. Today,
      Adelina needs Make Poverty History to rise again to demand fair trade,
      not on a few fancy supermarket shelves, but as the principle governing
      world trade. Let the poor do what we did. Let them rise. Otherwise,
      those rivers of rubbish will be home to generation after generation of
      Adelinas the world over, and the stench will never clear.

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