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Northern governments are guilty of rigging the rules to protect their own markets while calling for developing countries to open their economies and trade themselves out of poverty, fair trade campaigners argue.
The debate over debt forgiveness has largely been won by activists looking to reform the international financial system. But as US treasury secretary Paul O'Neill, accompanied by Irish rock star Bono, tours Africa this week to see first hand conditions on the ground, the issue of protectionism and demands for fairer market access for developing countries are taking centre stage.
"When developing countries export to rich-country markets, they face tariff barriers that are four times higher than those encountered by rich countries. Those barriers cost them US $100 billion a year - twice as much as they receive in aid," said an Oxfam report, 'Rigged Rules and Double Standards', released last month.
The $70 billion that Africa would generate through a one percent increase in its share of world exports is about five times the amount provided to the region through aid and debt relief, the report said.
"Apart from the financial benefits, export growth can be a more efficient engine of poverty reduction than aid. Export production can concentrate income directly in the hands of the poor, creating new opportunities for employment and investment in the process.
"However, the 'aid versus trade' dichotomy can be overstated; aid can play a critical role in enabling poor people to benefit from trade, notably by supporting investments in health and education services and economic infrastructure," said the report.
Northern protectionism through tariff and non-tariff barriers are especially damaging for the developing world because the bulk of their exports are directed to industrialised countries. Agricultural barriers are a particularly difficult hurdle for small producers. Subsidies to northern farmers are worth $1 billion a day, generating over-production with the resulting surplus dumped on world markets.
According to Oxfam's Double Standards Index, a system of measuring trade barriers, the European Union emerges as the worst offender closely followed by the United States and Japan. Oxfam has recommended reforms including duty-free and quota-free market access for low-income countries; a reduction of tariffs to no more than five percent for exports from developing countries; a comprehensive ban on export subsidies and recognition of the right of developing countries to "protect their agriculture".
However, some activists have condemned Oxfam's embrace of global trade.
"The idea is that a growth in trade would be good for the poor masses in Africa. But the trickle down theory hasn't worked. These benefits reaped by a few hasn't meant more clean water or clinics ... There is a certain logic that before you export you should make sure everybody in your country can eat," said Njokwe Njaiwu of the Washington-based '50 Years is Enough' campaign.
Njaiwu is dismissive of the US government's Africa Growth and Recovery Act (AGOA) which, signed into law in 2000, is aimed at giving producers from 35 eligible African countries zero-tariff access to the American market on a large range of export items. Some countries, typically clothing producers, have been able to take advantage of the agreement to boost export sales.
"AGOA was always going to work for business people, our concern was whether it was going to work for ordinary people," Njaiwu told IRIN. "It is hypocrisy to say small farmers in Africa can compete with American farmers."
One country that has apparently used AGOA successfully is Madagascar, earning $32 million in the first three months of 2002, mostly from apparel.
However, research by the Clean Clothes Campaign suggested that dramatic growth in Madagascar's Export Processing Zones has left textile workers faced with labour laws that are "hardly observed", demands for overtime where "workers have to work the whole night through, and even the next day", and where unions are protected by law "but are in reality powerless". Jobs may have been created, but the basic salary is about $24 a month.
However, according to James Lennox of the South African Chamber of Business (SACOB), the South African experience has been radically different. In 2001, United States imports of AGOA-covered goods earned South Africa $417 million. In the first three months of 2002, that figure stood at $162 million representing a year-on-year increase for that period of more than 80 percent.
While South African-produced cars are now exported to the United States (the largest export item by value in 2001) and manufacturers like BMW have increased their investment in the country, Lennox said the real success stories are the "family-owned and medium-sized businesses who have taken advantage of AGOA".
But with the exclusion of oil producers such as Nigeria and Gabon, the only other countries that seem to have reaped a reward from AGOA are textile manufacturers in Lesotho, Madagascar, Mauritius, Kenya and Swaziland.
Africa has suffered a significant de-industrialisation over the past two decades as it opened its markets to cheap foreign imports, while facing a decline in direct foreign investment. Debt has also sapped Africa's ability to compete. Lennox pointed to the infrastructural and capacity problems facing South Africa's neighbours that have prevented them from taking fuller advantage of AGOA.
"Trade can realise its full potential only if rich and poor countries alike take action to redistribute opportunities in favour of the poor. This requires action at the national level, new forms of international cooperation, and a new architecture of global governance at the WTO [World Trade Organisation]," the Oxfam report said.
National policies, the report noted, included tackling inequalities in health and education services, ownership of assets and access to land, financial resources and marketing infrastructure. At the international level, unsustainable debt burdens and the lack of effective representation of developing countries at the WTO has meant further marginalisation.
"We need a new world trade order, grounded in new approaches to rights and responsibilities, and in a commitment to make globalisation work for the poor," the Oxfam report concluded.
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions
