Trade not aid
The world's poorer nations increasingly demand 'trade not aid'. Overseas aid is currently regarded with suspicion because it has strings attached that are generating new forms of dependency.
In contrast, poorer countries view trade as the motor of growth and development. Export production builds their country's capacity and mobilises their constructive abilities and talents. The more they can produce, the more they have to exchange for consumer goods and the revenues they need to build the vital infrastructure of their societies. These revenues fund health and education systems, electricity and clean water, housing and transport.
With the global imbalance of economic power, producers in poorer nations struggle to get a fair price for their products. They blame unfair trading rules, which are regulated through the General Agreement on Trade in Services (GATS) and the World Trade Organisation (WTO). Poorer nations participate in the WTO, but it is dominated by powerful economic interests based in richer countries.
The result is that richer countries can promote 'free trade' abroad while practicing 'protectionism' at home by imposing tariffs. Their tariffs safeguard their domestic industries from export competition from poorer countries. Successive rounds of negotiations within the WTO have reduced or eliminated some tariffs, but many remain in place.
In the wake of the tsunami, Thailand's Prime Minister followed India in announcing that his country did not want financial aid. Instead, he asked the European Union to lift punitive tariffs on shrimp exports. These tariffs had cost his country far more than the amount promised by governments in emergency aid, he argued. The United States currently imposes a 25% tariff on pick-up trucks, which it justifies as protection against cheaper imports from Thailand. The aid agency, Oxfam, has criticised the United States for failing to drop tariffs on textiles and clothing from tsunami-hit countries.
In contrast, poorer countries view trade as the motor of growth and development. Export production builds their country's capacity and mobilises their constructive abilities and talents. The more they can produce, the more they have to exchange for consumer goods and the revenues they need to build the vital infrastructure of their societies. These revenues fund health and education systems, electricity and clean water, housing and transport.
With the global imbalance of economic power, producers in poorer nations struggle to get a fair price for their products. They blame unfair trading rules, which are regulated through the General Agreement on Trade in Services (GATS) and the World Trade Organisation (WTO). Poorer nations participate in the WTO, but it is dominated by powerful economic interests based in richer countries.
The result is that richer countries can promote 'free trade' abroad while practicing 'protectionism' at home by imposing tariffs. Their tariffs safeguard their domestic industries from export competition from poorer countries. Successive rounds of negotiations within the WTO have reduced or eliminated some tariffs, but many remain in place.
In the wake of the tsunami, Thailand's Prime Minister followed India in announcing that his country did not want financial aid. Instead, he asked the European Union to lift punitive tariffs on shrimp exports. These tariffs had cost his country far more than the amount promised by governments in emergency aid, he argued. The United States currently imposes a 25% tariff on pick-up trucks, which it justifies as protection against cheaper imports from Thailand. The aid agency, Oxfam, has criticised the United States for failing to drop tariffs on textiles and clothing from tsunami-hit countries.