Un Conference Backs Trade Liberalization as Poverty Solution

Article excerpt

Security forces militarized Brazil's largest city, Sao Paulo, to make the Sao Paulo state capital safe for trade promotion talks on June 13-17. The 11th meeting of the UN Conference on Trade and Development (UNCTAD XI) gathered heads of state, trade ministers, and development officials from 120 countries in Brazil's hub of finance and industry for talks aimed at easing misery through trade liberalization. Developing countries met to discuss reducing barriers among themselves to boost their share of global commerce, with a focus on building trade among nations of the South.

At least 2,000 police were deployed, and soldiers carrying semi-automatic weapons were posted at key intersections and highway overpasses, while military helicopters buzzed above Sao Paulo. UNCTAD, a 40-year-old institution that holds the event every four years, last gathered in Bangkok, Thailand, in 2000. That conference took place just months after the attempt by the World Trade Organization (WTO) to launch a new round of trade negotiations in Seattle collapsed amid police violence in response to anti-globalization street protests.

Though UNCTAD does not have the power of the WTO to negotiate and enforce treaties, the two groups cover many of the same issues. Participants hoped the meeting would help shift the global agenda from fighting terrorism to moving international-trade talks forward and combating Third World poverty.

Countries of south liberalizing faster than north

After years of neoliberal economic reform, the reluctant South is more liberalized than the North that advocates the freeing up of trade, say UNCTAD officials. "Countries in the South have liberalized trade faster than the industrialized nations of the North, resulting in increased import bills," says UNCTAD.

"Many [countries in the South] have liberalized their trade regimes in anticipation of those gains, and the speed of that liberalization has often outpaced that of developed countries. After two decades of opening up, however, the developing world is still waiting for the results," the UN agency added.

The US has signaled readiness to scrap its own much smaller export subsidies and trade-distorting export credits. But both Washington and Brussels have stressed that the concessions are conditional on poorer countries agreeing to open their own markets. Free-trade agreements covering the Americas and the European Union (EU) have stalled on the issue of agricultural subsidies within industrialized nations (see NotiSur 2003-12-05, SourceMex 2004-06-16).

A report by Oxfam International, which closely follows the trade battles of developing countries, says that the free-trade model promoted by the industrialized world has frequently resulted in harm to developing nations. As an example, the study says that Mexico lowered its corn-import tariffs to enter the North American Free Trade Agreement (NAFTA), but at the same time the US maintained US$10 billion in subsidies to its producers. "The result was a drop of more than 70% in Mexican corn prices and a drastic deterioration in living conditions for small producers," says the study.

Forum promotes South-South trade

Poor countries are seeking better market access to the economies of their richer counterparts, but nations like Brazil and India also face huge obstacles that stymie trade with each other.

The Group of 77 developing nations (G-77), which actually has 132 member nations, faced calls at its June 12 meeting in advance of the UNCTAD forum that they must find ways to slash tariffs and other trade impediments.

UN Secretary-General Kofi Annan addressed the delegates, saying their countries had made "significant progress in raising life expectancy and lowering child mortality, and in some cases achieving spectacular economic growth. Our challenge today is to consolidate those gains, while at the same time addressing the needs of those countries that have yet to advance or have even regressed. …