The Strange Two

glad tidings to the strangers

MADE in Europe: ‘Trade Justice’

– While international trade is worth $10 million a minute, poor countries only account for 0.4% of this trade – half the share they had in 1980.
– Around 20% of roast and ground coffee, and 20% of bananas sold in the UK are now Fairtrade
Between 1983 and 2006, rich countries’ support to their own agricultural sectors shot to over $250bn a year – that’s 79 times as much as their agricultural aid to developing countries

“Trade not aid.” Sounds great doesn’t it? No more handouts from rich countries to poor countries. Instead poor people get access to markets to sell what they’re producing and lift themselves out of poverty.

But the stark reality is very different. Under the current global trading system which is overseen by the World Trade Organisation (WTO), poor countries are unable to compete with richer countries who protect their markets with mechanisms such as subsidies – a system where governments give money to local businesses to make their product cheaper than imported goods.

It is often the poorest and most vulnerable in communities who suffer the most. Action Aid tells the story of Vishambar, a 35 year old silk weaver from Varanasi who recently lost his job following the reduction of import taxes on goods like textiles. ‘There is no work’ he says. ‘I am just sitting begging…I want work for myself and for other people in the village.’ With the UK government recently announcing it is scrapping aid to India in favour of the trade approach, Vishambar’s story is going to become a reality for more and more people.

Fair Trade is one initiative which tries to address the imbalance by ensuring fairer terms of trade for farmers and producers in developing countries who exports goods. It requires companies to pay a minimum price for products (most commonly things like tea, coffee and bananas) which does not fall below the market price so that producers have a sustainable income. In addition there is a Fairtrade premium paid which is invested by the producers into community development projects.

To read the full post click here.


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