Linkages between trade, development and poverty reduction (TDP)

Trade justice can reduce poverty

Lusaka, March 24, 2006

Trade justice is about giving poor people and countries the chance to work their own way out of poverty: giving farmers the chance to earn enough to feed their families and to send their children to school; allowing industries to develop, creating jobs and opportunities. But instead of trade justice, free trade is being forced on developing countries like Zambia. It is hurting poor people and not helping them at all and it is undermining democracy by denying poor people; especially from the grassroots, a greater say in decisions that affect their lives.

One would ask what free trade is. Free trade is trade within and between countries that is free from government intervention – that is; no incentives for producers and no barriers to trade. Removing this support and protection is devastating for poor farmers and industries, making it harder for the poorest to work their way out of poverty. The rich countries argue that moving towards free trade is the best way out of poverty for poor countries. But we, as the Organisation Development and Community Management Trust (ODCMT) and Trade Justice Movement disagree to this practice. The only way that poor people can work their way out of poverty is through trade justice. We believe that trade justice is the best change for poor countries to combat poverty. It would give poor-country governments the flexibility to choose trade policies that will help promote development and lift the poorest out of poverty.

Liberalisation; which is the gradual removal of government intervention in markets, is another form of injustice which forces poor countries into abject poverty. A country can liberalise its trade policies by stopping government help – by ending subsidies and government support for local producers, opening markets by removing barriers that limit the amount of imports into the country and privatizing services such as water, health, education and transport. Stopping government support for local producers will threaten the country’s food security and productivity. Opening up of our markets will result into Zambia becoming a dumping ground for goods and services that we can provide for ourselves and privatizing services such as water, health, transport and education will be a clear violation of basic human rights.

What Zambia and other developing countries need in a world that is quickly turning to liberalization are strong and concrete policies that protect and support their economies and not enforced free trade and liberalization. Inappropriate liberalization threatens the livelihoods of millions of farmers and traders in the developing world. But what is truly unjust is that liberalization denies that governments of poor countries the right to choose policies that rich countries themselves used to develop their own economies.

Poor countries need policies that will limit unfair competition by reducing cheaper imports, and requiring companies to use local products instead of those from abroad, helping infant industries and poor farmers by favouring local companies when giving out contracts, providing producers with the services they need (for example; seed, fertilizer and marketing), and offering preferential credit or tax incentives and making sure investment by business benefits poor people by regulating the activities of large transnational companies.

If the above measures were good enough for the rich north to develop their economies; then they should be good enough for the developing world as well.

Related Images: