Bridges Weekly Trade News Digest • Volume 6 • Number 14 • 16th April 2002
Oxfam Report Highlights Hypocrisies In Global Trading System
On 11 April, Oxfam International (OI) released a new 272-page report, entitled "’Rigged Rules and Double Standards" as part of the launch of its new "Make Trade Fair" campaign — slated to run over the next 3 years in 144 countries. Using a combination of qualitative and quantitative analyses, the report’s authors describe what they see as some of the hypocrisies in international trade rules and the double standards employed by industrialised countries. While much of the substance of the report echoes ‘progressive’ critiques against the international economic system, some of OI’s traditional non- governmental partners see the report as marking a departure from the diverse positions of many of its autonomous regional organisations. Notably, they say that the OI critique broadly adopts an approach that promotes trade, via the current multilateral trading system, as a motor for economic development and poverty alleviation.
The report estimates that protectionist trade policies in rich economies such as the European Union (EU), the US, Canada, and Japan cost poor countries $US100 billion annually — twice the amount they receive in aid. It concludes that in order for "well-managed trade" to lift millions of people out of poverty, a rebalancing of trade is required to redistribute opportunities in favour of the poor. Such goals, it states, require "action at the national level, new forms of international cooperation, and a new architecture of governance at the WTO."
Where is trade falling short?
Some of the key areas that the report looks to in support of its claims include the lack of developing country market access, the impact of developed country agricultural subsidies, hasty IMF/WB liberalisation policies which lack sufficient regard for social implications, profiteering from falling commodity prices, and over-powered transnational companies using employment and investment policies that work against poverty alleviation. It further states that many of the WTO rules on intellectual property (TRIPs), investment (TRIMs), and services (GATS) are "part of the problem."
Quantifying the gap between principles and practice
In an attempt to quantify the gap between the free-trade principles espoused by rich nations and their ‘actual protectionist policies’, OI comes up with a ‘Double Standards Index’ (DSI). The DSI measures ten dimensions of rich-country trade policies including average tariffs, the size of tariffs on two key developing country exports (agriculture and textiles), and restrictions on imports from the least developed countries. Once computed, the DSI points to the EU as the worst ‘offender’ — just barely beating out the US.
Responses vary
Responses to the report have been both supportive and critical from the various sides of the trade/poverty debate. While WTO Director-General Mike Moore "welcomed" the report and agreed with some of the recommendations, he rejected much of the analysis, citing "omissions and errors." Responding to the many criticisms laid against the WTO, Moore said that, "[m]any of the points raised[...] including the need for land redistribution, greater development funding, infrastructure development and guidelines for multinational corporations are outside the mandate of the WTO." He further stated that some criticisms, such as those alleging that the General Agreement on Trade in Services (GATS) will force public service privatisation, are "simply untrue".
Within the civil society movement, the Oxfam report is causing a number of ripples. US-based ‘Food First’ issued a scathing press release, stating "Oxfam’s report contradicts its own stated mission that ending poverty requires a global citizen’s movement for economic and social justice." One NGO source raised concerns that OI was now simply "towing the neoliberal line," and pointed to comments by the report’s lead author, Kevin Watkins, that "trade can deliver much more [for poor countries] than aid or debt relief." This view, the source continued, echoes the "neoliberal" prescriptions emanating from the World Economic Forum, the UN Conference on Financing for Development, and what they speculate will likely come out of the upcoming World Summit for Sustainable Development (WSSD).
Within Oxfam International (OI) — which is comprised of 12 autonomous regional organisations (who came together in 1995 to create OI) — sources close to one of the regional organisations indicated there was a fair amount of disagreement over the basic perspective taken on trade for the campaign (and the report). This source noted that in fact, the fundamental position taken in the report is similar to those taken by some members of the Oxfam family in the lead-up to the Seattle WTO Ministerial Conference in 1999 — and thus is not such a radical departure from some of the currents within Oxfam International.
One source familiar with the debate notes, however, that the report holds quite strongly to many of the criticisms that most Oxfam organisations have always lodged against the international economic regime. They cite those criticisms lodged against the World Bank, the IMF, and the various criticisms lodged against the WTO (including the call for new intellectual property rights rules, true safeguarding of governmental authority with respect to public services, as well as a general call to "democratise the WTO"), as well as those against ‘over- powered’ transnational corporations.
The full version of the report, as well as a 20-page executive summary, can be found at http://www.oxfam.org or http://www.maketradefair.com.
"New Faith in Free Trade: In Break With Allies, Oxfam Backs Globalisation," WASHINGTON POST, 11 April, 2002; "New OXFAM Campaign Contradicts Developing Country Demands For WTO Reform," FOOD FIRST, 11 April, 2002; "Moore Welcomes Oxfam Report But Cities Omissions and Errors," WTO PRESS RELEASE, 11 April, 2002; "Oxfam Highlights Double Standards of Rich Nations," TERRAVIVA UN JOURNAL, 12 April 2002; ICTSD Internal Files.