Conditions
Proponents of free trade claim it will stimulate growth in poorer countries. They argue that it will diversify economies away from over-dependence on agriculture and increase trade. They are failing on all three counts. The tiny share of world trade that poorer countries represent financially (0.5%) is actually falling.
Free trade is not fair or equal trade. Poorer countries' economies have been opened up to free trade in goods from transnational companies, based in rich countries, as a condition for obtaining debt relief, loans and aid. Increasingly, these companies control the provision of basic services such as schools, hospitals, libraries, rubbish collection and access to clean water. Since private companies exist to maximise profits, they have little incentive to provide services to those unable to pay. This leaves the poorest sectors within developing countries especially vulnerable.
Many governments of poorer nations have sought to protect their own industries. They want to meet the basic needs of their people through local, sustainable economic structures. But they have been coerced into removing any barriers to trade. So their local producers are subjected to unfair competition. With government protection, India's dairy cooperatives now embrace 11 million small-scale producers. They face competition from highly subsidised imports from richer countries after the United States won a complaint against India through the WTO.
Historically, many of the richer nations are more recent converts to free trade. Their own economic development depended on nurturing their infant industries behind protective tariffs, and they recognised the rights of others to do the same.
Free trade is not fair or equal trade. Poorer countries' economies have been opened up to free trade in goods from transnational companies, based in rich countries, as a condition for obtaining debt relief, loans and aid. Increasingly, these companies control the provision of basic services such as schools, hospitals, libraries, rubbish collection and access to clean water. Since private companies exist to maximise profits, they have little incentive to provide services to those unable to pay. This leaves the poorest sectors within developing countries especially vulnerable.
Many governments of poorer nations have sought to protect their own industries. They want to meet the basic needs of their people through local, sustainable economic structures. But they have been coerced into removing any barriers to trade. So their local producers are subjected to unfair competition. With government protection, India's dairy cooperatives now embrace 11 million small-scale producers. They face competition from highly subsidised imports from richer countries after the United States won a complaint against India through the WTO.
Historically, many of the richer nations are more recent converts to free trade. Their own economic development depended on nurturing their infant industries behind protective tariffs, and they recognised the rights of others to do the same.