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Fair Trade - Resources
Nano Nagle was committed to changing the social and political conditions of her time. She listened to the voices of those who were poor and denied their basic human rights. Presentation Sisters today continue to respond to the cries of the poor and the oppressed. One way we do this is through IPA’s commitment to eliminating poverty through debt cancellation and fair trade.
Pope Paul VI, Populorum Progressio #59
The rule of free trade is no longer able to govern international
relations. Pope Paul VI, Populorum Progressio #58, 59
Pope John Paul II, World Day of Peace Message 2001 #17
Trade Justice - A Way out of Poverty
So that the children’s parents do not get suspicious and intervene, the rule maker occasionally lets the other player go up a ladder, especially when the parents might be watching. In this way the unfair rules can be maintained without challenge. The rule maker may even be praised for their generosity. The “game” of international trade is played in much the same way with the rich countries setting the rules. They say that they are in favour of free trade and then do the opposite especially when it comes to agricultural products. They set the rules to “free trade” then pay their own farmers billions of dollars every year to give them an advantage over the producers in the developing countries. This means that those in poor countries cannot fairly compete on the world market and thus are deprived of a real opportunity to work themselves out of poverty. Poor countries are effectively locked out of the world market for many agricultural products. At the same time, these same rich countries give aid to poor countries. It is estimated by the United Nations that the poor countries lose around US$700 billion each year because of the unfair trade rules. This is about 14 times what they receive each year in aid. So the rich countries give with the one hand and take back 14 times as much with the other. Brazilian cotton farmers last year brought a case to the World Trade Organisation (the organisation that is meant to keep the trade rules fair) complaining about the US$3.2 billion paid in subsidies to US cotton farmers. The Brazilians along with some West African cotton producing countries said that this was not fair. The World Trade Organisation (WTO) agreed. The US did not, however, stop the payments. They appealed the decision. Once again, the WTO this March declared the payments to be illegal under the trade rules. The US still has not stopped the payments. This story is repeated in a similar way for milk producers in Jamaica, for sugar producers in South Africa and Thailand, for Asian rice farmers and for countless others. Down the snake, down the ladder and miss a turn. This, however, is a game of life and death for millions of the most vulnerable people in the poorest countries in our world and the rules need to be changed. Used with permission from OzSpirit – Caritas Australia’s social justice e-newsletter
International Aid is also called Overseas Development
Assistance (ODA). The UN Millennium Development Project estimated
that it would take an additional US$70 billion each year to reduce
the number of people living in poverty by 2015. This seems an impossible
amount until we realise that the US military budget for 2005 was
US$450 billion. Poor countries with enormous amounts of debt are called Highly Indebted Poor Countries (HIPCs). The burden of foreign debt means that money is constantly flowing out of the country to pay off the debt or the interest on the debt and there is no money left to invest in basic services for people within the country. For every US$1 received in aid the world’s most highly indebted poor countries pay US$13 on old debts. Global poverty kills as many people each week as were killed in the 2004 tsunami. The burden of debt payments, unfair trade rules and lack of money to develop self-sustaining projects keep countries from getting out of the poverty trap.
GATS is an international trade agreement within the World Trade Organisation (WTO). GATS treats services as if they were commercial goods for sale instead of social goods that are necessary for people’s lives. In developed countries services are the fastest growing part of the economy. In developing countries, agriculture is the largest part of the economy. In both developed and developing countries essential public services are being privatised and being traded for profit. Because these services become so expensive, people who are poor (the majority of people in developing countries) are excluded from services such as education, health and other essential social services.
Andrew Hewitt, Executive Director, Oxfam Australia
Our economic system has the sole aim of generating growth. It is not economic growth alone that will reduce poverty. We must also find ways to ensure equitable distribution of income within countries and between countries and environmental sustainability. Economists say that growth, like a rising tide, lifts all boats. They ask why share the cake more evenly when we can bake a bigger one? But now sea levels really are rising, as a result of global warming driven by the pollution from economic growth. And millions of the poor have no boats to rise in. And the massed ranks of orthodox economists have yet to find the ingredients, or even a recipe, to bake a spare planet to share among the world’s population. David Woodward and Andrew Simms
Jeffrey Sachs wrote in The Economist in May 2004:
For countries such as these, it is not a question of either trade or aid, but of how trade and aid are both essential to poverty reduction. Foreign aid builds capacity in countries that lack basic infrastructure. An extract from the NGO (Non Government Organizations) Statement to the Commission on Sustainable Development (CSD-13) states:
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In February 2005 Nelson Mandela said:
When two parties are in very unequal positions, their mutual
consent alone does not guarantee a fair contract; the rule of
free consent remains subservient to the demands of the natural
law … trade
relations can no longer be based solely on the principle of free,
unchecked competition, for it very often creates an economic
dictatorship. Free trade can be called just only when it conforms
to the demands of social justice.
The promotion of justice is at the heart of a true culture of
solidarity. It is not just a question of giving one’s
surplus to those in need, but of helping entire peoples presently
excluded or marginalised to enter into the sphere of economic
and human development. For this to happen, it is not enough to
draw on the surplus goods which in fact our world abundantly
produces; it requires above all a change of lifestyles, of models
of production and consumption, and of the established structures
of power which today govern societies.
Imagine a game of Snakes and
Ladders between two children where one player can make the rules.
That player, no doubt, would make sure that they could go up the
snakes as well as the ladders. They would make the other player
go down the ladders as well as the snakes. This of course is not
fair. 
There
was one small glimmer of hope for the poor at Hong Kong WTO Ministerial
Conference, December 2005. While rich countries fought hard to
preserve their privileges, developing countries showed increasing
assertiveness. The previous ministerial conference in Cancun,
Mexico, two years ago, was marked by the emergence of the G20 – a
group of large developing countries such as Brazil, India, South
Africa and China. While the early demise of this group had been
widely predicted, on the contrary, it has gone from strength
to strength. In Hong Kong, the G20 joined with other developing
countries, including the very poorest, to articulate their demands
for a righting of the rigged rules and double standards that
plague international trade.
A Heart for the World
© International Presentation Association
