Global Policy Forum

Cutting trade barriers and opening markets do not necessarily generate development. These articles analyze the role and effects of international trade on development efforts around the world, while assessing how governments can reform trade practices so that they contribute to development.

Key Documents

Least Developed Countries Report (2004)
The UNCTAD report argues that trade liberalization has made few advances in poverty reduction. However, international trade can play a crucial role in the development of Least Developed Countries if governments in both poor and rich states undertake substantial change in the international trade system. (UNCTAD)

Free Trade and Distorted Development: A Critique of WTO Perspectives (November 12, 2008)
Director-General of the World Trade Organization, Pascal Lamy, argues that free trade brings efficiency and generates wealth to all countries. However, this disregards the socio-economic impacts of globalized trade openness and the negative impacts of free trade in less developed countries, such as lower wages, job losses and rising income inequality. (Countercurrents)

African States Won't Compromise on Development in Doha (October 20, 2008)
Leaders of rich countries are exerting pressure on poor countries to complete the WTO Doha round before the end of 2008. But African countries oppose an agreement which allows rich countries to subsidize their agricultural sector. As it stands, the Doha round is unfavorable for developing countries. (Inter Press Service)

Destroying African Agriculture (June 3, 2008)
This Foreign Policy In Focus article argues that the shift of countries from net-exporters to net-importers of food caused the global food crisis. The author criticizes the IMF and World Bank's structural adjustment programs that lowered countries' investments and social spending. Several poor countries dedicated land for export crops to service their debt to the World Bank and IMF. As a result, food production has declined and intensified food insecurity. For example, from 1966-70, Africa exported an average 1.3 million tons of food a year but almost all African countries are now net food importers.

Why Women Remain Trapped in Informal Trade (September 28, 2007)
The Federation of National Associations of Business Women in COMESA (FEMCOM) highlights illiteracy and insufficient access to credit as two of the main reasons why African women are unable to participate effectively in regional and international trade. In order to better integrate women into the Common Market for Eastern and Southern Africa (COMESA) trade system, FEMCOM has initiated training for local business women to increase gender sensitization, and to improve quality management, packaging, market information and business management. Increased information on the functioning of markets will greatly improve the productivity of the women and integrate them in formal rather than informal sector trade activities. (Inter Press Service)

Does Globalization Bring War or Peace? (September 24, 2007)
This AlterNet article explores the relationship between international trade and conflict. The author finds that high levels of trade acts as an accelerator for either cooperation or conflict. Whether cooperation or conflict occurs, depends on the structure of a country's domestic economic institutions and which domestic sectors are dominant in international exchange - primary, industrial, or even military products. The author also argues that trade can promote cooperation if the political elite are affiliated with productive and competitive industries or alternatively whether the elite are involved in industries less successful in international trade. The author warns against viewing trade and economic independence as a protection against war or conflict.

Africa: Aid Critical to Ensuring Benefits from Trade (September 24, 2007)
World Trade Organization Director-General Pascal Lamy and African Development Bank President Donald Kaberuka argue that the African continent will benefit greatly from increased trade. They recognize, however, that the infrastructure for large scale industry and trade is not in place in most African countries and consequently call for "Aid for Trade" to finance investments in infrastructure. The two authors argue that the standard of living in Africa will increase simply by increasing trade. This oversimplified ‘solution' fails to address other obstacles to development, including low investment in health and education and pressing conflict issues, experienced by governments and citizens of poor countries in Africa. (allAfrica)

Threat of Turmoil in the Midst of a Boom (September 5, 2007)
This Inter Press Service article summarizes the main findings of the 2007 UNCTAD report. The report urges developing countries to cooperate financially within their region to better manage exchange rate fluctuations. It also suggests that poor countries avoid North-South free trade agreements and instead opt for regional integration. Finally, the report also warns against the high levels of debt accumulated by several rich countries, including the US, and predicts that the dollar will have to fall even further.

Trade Talk (September 4, 2007)
In 2004, a group of poor countries met in Sao Paulo and initiated the Global System of Trade Preferences (GSTP), to better promote their interests in the WTO's Doha Round of multilateral trade negotiations. After six years of negotiations, participants in the Doha Round have still not succeeded in steering the world trading system in a direction favorable to developing countries. The author argues that so far the GSTP has done little to enhance South-South trade. Now, however, the member countries are responsible for at least a third of world trade and the GSTP finally carries enough weight to change global trade balances in favor of developing countries. (Business Day)

In Africa, China Is Both Benefactor and Competitor (August 20, 2007)
This New York Times article highlights China's role in Africa's economy. China's search for resources in Africa has brought investment, technology and jobs into some of the world's poorest countries. While Chinese imports give Africans access to cheaper products, the introduction of Chinese finished and manufactured goods hinders Africa's ability to develop a strong and diverse economy. Across Africa industries such as textile factories have closed down as cheap Chinese goods flood the world market.

After Six Years, the Global Trade Talks Are Just That: Talk (July 21, 2007)
This New York Times article argues that six years after the start of the Doha negotiations, these global trade talks are at an impasse as they have not produced any results. India and Brazil refuse to lower their tariffs for fear that Chinese goods will invade their markets, while other developing countries complain that they are excluded from economic competition by rapidly developing countries such as India and Brazil. In the meantime, some of the poorest African countries accuse industrialized countries of disregarding African needs, asserting that the US and Europe do not do enough to "reduce farm subsidies." The complete failure of these trade talks could harm the world economy.

'Aid for Trade' May Cut Health, Education Funds (July, 20 2007)
The European Commission has guaranteed to give "aid for trade" to African, Caribbean and Pacific nations who will sign the Economic Partnership Agreements in Brussels in 2007. These funds will help increase the countries' trade, but some African diplomats have raised concerns. They claim that the EU has not said where the money comes from, meaning that this aid could come "at the expense of other forms of development assistance," which are needed to subsidize projects in health and education. (Inter Press Service)

China Launches $1B Africa Fund (June 26, 2007)
China has launched an African Development Fund of US$1 billion which will invest exclusively in Chinese enterprises and their projects in the continent. China has increased its aid and loans to Africa in exchange for access to oil and other resources and to secure new markets for its exports. Development advocates have criticized this policy of "tying aid" to purchasing goods and services from the donor country and accuse Beijing of supporting authoritarian regimes in Africa. (Associated Press)

Fair Trade Begins to Bear Fruit (May 2, 2007)
This Inter Press Service article reports on the benefits of fair trade to small farmers and artisans in developing countries such as Guatemala, where it has allowed thousands of coffee growers to earn as much as 100 percent more than would be possible in the conventional market. Business analysts say that the fair trade system maximizes profit for the producers while "taking into account factors like the human being, the environment, [and] the non-use of child labor."

Free Trade vs. Small Farmers (April 29, 2007)
This Foreign Policy In Focus article reports that an increasing number of small farmers have begun to organize against the "typhoon of trade liberalization" which has displaced and impoverished thousands worldwide. The author points to the stalemate of the Doha round of World Trade Organization negotiations as the most visible success of this resistance, calling it a critical step toward a fair and progressive system of world trade.

International Publics Strongly Favor Labor and Environmental Standards in Trade Agreements (March 21, 2007)
This World Public Opinion poll reports strong support in developing countries for requiring international trade agreements to include minimum labor and environmental standards. The poll further finds that, despite the Bush administration's opposition to such protections in the past, "the US public is nearly unanimous in its support" of both measures, which may force the White House to "increase its willingness to negotiate these issues."

Signing Away the Future--Summary (March 20, 2007)
This Oxfam report finds that rich countries are using regional and bilateral trade deals to attain "enormous irreversible concessions" from poor countries, making these agreements far more damaging to development than anything proposed under World Trade Organization negotiations. Arguing that these deals have "grave implications" both for the environment and for economic growth, Oxfam calls for trade rules that recognize the rights of developing countries and work to reduce poverty.

Backlash Grows Against Free Trade (February 16, 2007)
Although many economists see free trade as the solution to ending global poverty, some experts argue it can only live up to this promise as long as "powerful, growth-producing forces" share the benefits and gains among trade's "losers." A record-high trade deficit for the fifth year in a row may force even the US, a leading proponent of free trade, to begin considering "the dark side" of global commerce. (Christian Science Monitor)

Press Release: Growth Prospects Are Strong, but Social, Environmental Pressures from Globalization Need More Attention (December 13, 2006)
Under the "central scenario" of the World Bank's Global Economic Prospects 2007 world GDP will roughly double over the 2005-2030 period with developing country exports accounting for a significant share of the increase. While this growth could halve the number of people living on less than a dollar a day by 2030, the report also acknowledges that growing income inequalities and global warming could "jeopardize long-term progress." Along with reducing barriers to trade, the report calls for stronger international institutions to tackle the stresses on the ‘global commons.' At the national level the Bank calls for government investments in education and infrastructure "to ensure that the poor are incorporated into the growth process."

International Trade Statistics 2006 (November 9, 2006)
In some 250 tables and charts, the annual World Trade Organization publication provides statistics on world trade flows of merchandise and commercial services by country, region and product in 2005 as well as some longer term world trade trends data. An overview summarizes major developments. These include: an overall slow-down in world trade expansion; a shift in textiles and clothing exports from Latin America and Africa to China, India and Pakistan due to the phase-out of the WTO Agreement on Textiles and Clothing; and a further increase in oil-exporters' trade surpluses while the US trade deficit reached a record high of US$793 billion.

China to Double Aid to Africa (November 4, 2006)
Speaking at the November 2006 China-Africa summit, Chinese President Hu Jintao, pledged a US$5 billion increase in loans and credits to Africa over the next three years, thereby doubling Chinese aid to the continent. The summit also produced several natural resource investment deals between Chinese companies and African countries, thus further boosting recent years' enormous increase in China-African trade, which consists primarily of oil, minerals and other natural resources along with Chinese-made weapons. Meanwhile, critics say China "extracts what it needs from the continent, while ignoring environmental and anti-corruption standards." (Integrated Regional Information Networks)

The Peril of Beijing's Africa Strategy (November 1, 2006)
With Chinese trade and foreign direct investment in Africa "skyrocketing" in 2006, China has become a major player in Africa's economic development, and a widely cited "ideal development model" among African leaders. Many African leaders frustrated by Western policy conditionality have welcomed China's "strictly business" involvement in their countries. But the Chinese lack of concern for good governance and social responsibility produces a "backlash in several African countries." This International Herald Tribune article argues that whether China signs on to the principles of transparency and good governance "will be critical for the continent's long term development and stability."

Kicking the Habit (November 2006)
This Oxfam report details the history and damaging consequences of the World Bank and IMF (International Monetary Fund) praxis of pushing privatization and liberalization reforms in poor countries, as well as the continuous failure to reform this ‘conditionality.' The report looks closer at the case of Mali, where the World Bank has forced liberalization of the cotton industry by withholding funds desperately needed in the country's neglected education sector. The resulting exposure to the world market cotton price – significantly driven down by rich countries' subsidies – decreased the price Malian farmers received for their cotton by 20 percent in 2005. This could increase country-wide poverty by 4.6 percent, says the report.

Chain-Gang Economics (October 30, 2006)
In this Foreign Policy in Focus piece, Walden Bello argues that the economic relations between China and the US chain the global economy together in a "crisis of overproduction." Restrictive Chinese rules on trade and investment force transnational corporations (TNCs) operating in China to locate the majority of their production processes in the country, making the TNCs major "agents of overinvestment." At the same time, Chinese authorities continue exploiting the country's cheap labor by keeping wages down instead of expanding people's purchasing power. Thus impeding domestic consumption, China has chosen breakneck growth feeding the spending appetite of US consumers over domestic and global stability, argues Bello.

Hey, Nice Clothes. But Are They Ethical? (October 13, 2006)
This Christian Science Monitor article tells how Lesotho has succeeded in giving new life to its textile business by becoming an origin of "ethical clothing." Companies "promise customers" that they do not use sweatshop labor in Sotho clothes production, and that "working conditions me[e]t high safety standards." Under rock star Bono's ‘Product Red' label, companies like Gap and Emporio Armani sell a variety of ethical goods, and give a portion of the profits to the ‘Global Fund to fight AIDS, Tuberculosis, and Malaria.' According to a representative of the Ethical Trading Initiative, "there has been a huge surge" in consumer interest in ethical fashion.

EU Move Could Bring Disaster to the Poor (October 4, 2006)
This Inter Press Service article reports on the disturbing announcement by EU Trade Commissioner Peter Mandelson that the EU must pursue a policy of "opening markets abroad" and will start negotiating a new generation of bilateral trade agreements. Following the collapse of the World Trade Organization Doha Round of negotiations, the EU thus sadly seems to embrace a unilateral approach of using economic might to force agreements upon individual poor countries. Agreements that mainly benefit western corporations while causing losses of jobs and income in these countries.

Across Latin America, Mandarin Is in the Air (September 22, 2006)
Particularly since Chinese President Hu Jintao's visit to Latin America in 2004, relations between China and Latin America have strengthened. The total value of trade between them increased dramatically from US$10 billion in 2000 to US$50 billion in 2005. Similarly, the number of people across Latin America taking Chinese classes has increased substantially, this Washington Post article reports. With Latin America being the prime destination for Chinese investors, Latin Americans understand the importance of communicating in Mandarin.

Gateses Approach to African Hunger Is Bound to Fail (September 22, 2006)
In this Seattle Post-Intelligencer article, agricultural development specialist Peter Rosset criticizes the Gates and Rockefeller Foundations' US $150 million initiative to bring a "new" green revolution to Africa. Rosset finds that an "apparent naiveté about the causes of hunger" has led the Gateses to invest in technology packages that will likely only benefit seed and fertilizer industries, have "negligible impacts" on total food production and worsen countryside marginalization. Rosset holds much higher hopes for the "Food Sovereignty" approach focusing on ending "free trade extremism," improving land access for the poor, and increasing support for family farmers and ecological farming methods.

Why the WTO Doha Round Talks Have Collapsed – and a Path Forward (August 14, 2006)
The question of who to blame dominates analyses of the Doha Round collapse. This Common Dreams article instead argues that the underlying cause lies in people's rejection worldwide of the "WTO model of corporate globalization." Trade rules in the "WTO decade" have only benefited a small corporate elite and have constrained domestic policy making. The authors argue for an alternative to corporate globalization and regional trade agreements. They urge US citizens to take action and demand change in their country's position on international trade, as citizens in many other countries have succeeded in doing.

Arrested Development (August 10, 2006)
Given the "corrupt system of campaign-contributions-for-subsidies" in US politics, it came as no surprise that the Doha trade negotiations failed to produce the promised development agreement. In fact, former World Bank Chief Economist Joseph Stiglitz argues, poor countries feel relieved that they steered clear of a "development" agreement maintaining the status quo or making them worse off. World leaders must now avoid creating a myriad of unfair bilateral trade agreements. Particularly aiming at Europe, Stiglitz strongly appeals to governments not to follow the US example of unilateralism in the international trade system. (Guardian)

On Free Trade, Washington Is Trading Freely in Hypocrisy (July 11, 2006)
Economist Joseph Stiglitz questions the motives and effects of proposed US trade reforms in the Doha Round. Although the US conceded a 97 percent opening of its markets, Stiglitz proclaims that "the devil is in the details," since the remaining tariffs would pit the poor countries against each other and lead to a reduction in overall trade. Stiglitz warns that in the long run, the US may spur trade liberalizing countries to unify in opposition to US protectionist policies. (Daily Star)

Trade on Human Terms: Overview (June 29, 2006)
This United Nations Development Program (UNDP) report summary stresses the importance of the relationship between economic growth and human development. Based on a study of the Asia-Pacific region, UNDP found that free trade has failed to benefit key sectors of society, thus decreasing regional stability. UNDP proposes an eight-point agenda to channel policies dealing with competitiveness, trade, agriculture, jobless growth, taxes, and exchange rates in order to promote a better quality of life for all along with economic expansion.

WTO Deal This Year Won't Deliver Development: Poor Countries Concentrating on Damage Limitation (June 28, 2006)
This Oxfam press release decries the Doha Round as fruitless for poor countries. EU and US "stubbornness and self-interest" prevent tariff reductions that would provide poor and rich nations alike with greater access to their markets. The release suggests that the US and EU pressure poor nations to make sacrifices without making reciprocal concessions.

Trading Up (June 26, 2006)
An International Food Policy Research Institute study found that the global economy would grow by over US $54 billion annually if the US and Europe reduce duties, quotas, and tariffs on goods from poor nations. While this policy change would have a negative impact on the uncompetitive sectors of US and European markets, it would benefit poor nations by increasing their market access. Additionally, rich nations stand to gain from savings on subsidies and lower commodity prices. (New York Times)

Trade Liberalization and Its Consequences (April 26, 2006)
Speaking at Stanford University, Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), looks at the "economic benefits and costs" of trade liberalization for poor countries. A handful of emerging countries has gained from increased foreign direct investment (FDI) and trade. But most poor countries struggle to benefit from multilateral trade liberalization and fail to attract FDI capable of transferring know how and technology. Panitchpakdi also urges that rich countries' Aid-for-Trade commitments must be additional to their development aid promises of the Doha Round. (South Centre)

Promoting Human Development through Trade (April 5, 2006)
In this speech, Kamal Malhotra, UN Development Programme's Senior Adviser, calls for an international trade system that promotes "human development." He proposes a political framework that allows diversity of development strategies while leaving the major decisions to national governments. Since countries reach decisions at the World Trade Organization through exclusive and informal processes, Malhotra questions the organ's capacity to promote and implement such a new trade regime. (Carnegie Council on Ethics and International Affairs)

Trade Rules a Stumbling Block to Realising the MDGs (March 15, 2006)
In this interview, Director of Programmes of Third World Network-Africa Tetteh Homeku explains how predominant trading rules hinder Africa's development. Although foreign direct investment (FDI) can generate growth, the region requires strong local industries and better access to foreign markets to foster development. In addition, Mr. Homeku encourages the UN Agencies and Programmes that work in the region to support existing developing campaigns instead of "reinventing the wheel." (Inter Press Service)

Social Justice and Global Trade (March 2006)
This Far Eastern Economic Review article weighs the benefits of trade liberalization against the costs. While the WTO cites complete liberalization as a means towards achieving economic growth, trade agreements such as NAFTA demonstrate that it can have detrimental consequences on poor countries. Economist Joseph Stiglitz calls for a reformation of the WTO as an initial way to increase worldwide welfare.

Aid for Trade (March 2006)
With this report, Nobel laureate Joseph Stiglitz and Andrew Charlton draw attention to the importance of strengthening poor countries' export capacities. A new multilateral platform, operating within UNCTAD, could overlook investments in infrastructure projects, assist local export businesses and provide advice on national trade policies. With the poorest countries' interests well represented in the organ's governing body and rich countries providing the necessary funds, the proposal is an important step to a more equal trade system. (Commonwealth Secretariat)

Reinventing UNCTAD (February 20, 2006)
Although United Nations Conference on Trade and Development (UNCTAD) policies enjoyed strong support from poor countries for decades, rich countries have dismantled the organization's efforts to "build a stable, viable and genuinely democratic international community." In this South Centre report, former UN Secretary General Boutros Boutros-Ghali describes the necessary steps to turn the organization back into a platform that promotes equality and sustainable development among all countries.

It Takes More than Free Trade to End Poverty (February 3, 2006)
In 2005, rich countries once again prevented the World Trade Organization (WTO) from turning into a real development tool. They refused to make multilateral concessions like cutting tariffs on agricultural and industrial goods coming from poor countries. According to Joseph Stiglitz, the Hong Kong summit did not generate a deal, but only an agreement about the way forward. As long as the US and EU take advantage of their power in bilateral trade talks and refuse to support development-friendly trade, the Doha round is unlikely to succeed. (Independent)

Humanising Globalization (January 30, 2006)
In this speech, Pascal Lamym, Director General of the World Trade Organization (WTO), calls for a new "Geneva Consensus." In his point of view, the world's governments should define common interests, strengthen global governance and use trade as a tool to elevate human conditions. Although pointing into the right direction, Lamy fails to explain why the WTO has not succeeded in turning trade into a real development tool. (WTO News)

One Death Every Minute (January 25, 2006)
The US$ 20 billion arms trade business is barely regulated. Poor and crisis-shaken countries suffer from its bloody consequences. With a UN meeting on small arms trade in June 2006, this article asks governments and NGOs to push for an international arms trade treaty. Governments must recognize that arms proliferation is one of the main drivers of human rights abuse and poverty. (Guardian)

Big Business Lobbyists Have Undue Influence on Trade Talks (January 24, 2006)
ActionAid draws attention to the way big companies influence global and regional trade talks. With thousands of lobbyists in Washington and Brussels, companies have made bilateral and multilateral trade negotiations excessively open to corporate interests. As a result, international trade deals often favor corporate interests while falling short on development needs.

Thinking Outside the Box about Trade, Development, and Poverty Reduction (January 18, 2006)
This article discusses the relationship between trade, development and poverty reduction. Opposing the policies of the World Trade Organization (WTO), it says that trade must be flanked by public investment and human capital in order to improve peoples' lives. Also, the author asks governments to launch a "Tropical-Products Round" within the WTO which would largely benefit poor countries' farmers. (Foreign Policy in Focus)

Export-Led Growth: The Elephant in the Room (January 17, 2006)
This article argues that many emerging economies have benefited from their export-led growth to the US market. However, by financing the huge US trade-deficit with growing US$ deposits, these countries now face a very unstable financial future. Thomas Palley offers several scenarios about how the world economy "may soon face a harsh wake-up call."

Do Remittances Reduce Poverty? (January 2006)
International remittances sent to poor countries play a crucial role in many families' continuous struggle for existence. Governments could easily improve the positive effects of remittances by cutting the huge bank transaction costs. Also, politicians should promote the idea that migration can help reducing poverty. (ID21 Insight)

Free and Fair Trade (2006)
According to Noam Chomsky, the anti-globalization movement is a misnomer, as it mostly supports globalization in its original meaning. Prioritizing international rights for people instead of capital is what globalization should be all about. As Adam Smith expressed a long time ago, "free movement of people is a core component of free trade." (Global Agenda)