BRUSSELS - Trade restrictions imposed by rich
costing the world's poorest "a staggering 2.5 billion US dollars a
lost foreign exchange earnings", Oxfam says in a report released
The 27-page report, 'Rigged Trade and Not Much Aid: How Rich
to Keep the Least Developed Countries Poor', to be presented at
Forum, in advance of the UN Conference on Least Developed
that northern governments are guilty of offering "empty promises"
poor when it comes to trade, aid and debt relief.
While Least Developed Countries (LDCs) face a complex array of
report finds that their efforts to combat poverty have been
undermined" by northern governments.
Oxfam Senior Policy Advisor Kevin Watkins, who will present the
says: "On trade, the industrialized countries have operated a
highway robbery masquerading as market access preferences".
United States and Canada are identified as the "worst offenders",
Bangladesh losing seven dollars from trade restrictions for every
it receives in U.S. aid and five times that for every dollar it
"Indeed, losses associated with U.S. trade barriers are roughly
to total U.S. Aid to the LDCs," it says.
Trade restrictions in Canada cost LDCs an estimated 1.6 billion
approximately five times aid flows to the poorest countries.
Japanese trade restrictions cost Bangladesh more than double the
Tokyo provides in aid.
At a time when aid to the developing world has fallen to its
since the early 1970s, around 11 percent of exports from LDCs face
peaks' in excess of 15 percent, which is three times the share of
affected from other countries.
"In areas where they have a capacity to export, LDCs face higher
than other countries, including developed market economies," it
Average tariffs in the European Union, the United States, Canada
and Japan -
the so-called Quad countries that account for over half the
world's trade -
are relatively low, at approximately five percent.
"However, the average obscures very high tariffs in sectors of
relevance to poor countries. Tariffs on some agricultural products
than 300 percent in the EU and, in the case of groundnuts, over
in the U.S.," it says.
While the European Union's 'Everything but Arms' proposal for
duty- and quota-free access to LDCs by 2009 represents a bold step
right direction, intensive lobbying resulted in key agricultural
rice, sugar and beef - being removed from the proposal.
In Europe, total duty-free access would increase exports from LDCs
million dollars, with sugar accounting for over 60 percent of the
according to Oxfam's research.
But the Everything but Arms initiative was watered down into
Farms", says Watkins. "The clear message from Brussels to the LDCs
powerful industrial lobbies come first, and poverty second."
While the doors to northern markets remain shut, many LDC have
liberalizing, often under International Monetary Fund and World
auspices, at breakneck speed, notes the pressure group.
"The results have often been disastrous. In Haiti, the
liberalization of the
rice market and subsequent surge in subsidized US imports has
thousands of livelihoods and undermined national food security,"
In such labor intensive areas as textiles, footwear, and
production for export growth has the potential to generate more
patterns of economic growth, "creating employment and livelihood
opportunities for highly vulnerable populations", the report
"There are potentially powerful inter-linkages between exports and
reduction in many LDCs, through a commitment to redistribution and
environmental sustainability would strengthen the benefits of
"The problem is that trade policies in industrialized countries
carefully designed to prevent LDCs from taking advantage of export
The Oxfam report also examines the rich world's record on aid and
relief. It concludes that the rich countries' performance on aid
In 1990, the countries of the Organization for Economic Co-
Development (OECD) pledged to increase aid and reach a target of
percent of their GNP to the LDCs in development assistance. Since
have cut around 3.5 billion dollars from their aid flows, which
are now at
their lowest level in per capita terms since the early 1970s.
At the same time, annual spending in OECD countries on farm
subsidies - 1
billion dollars per day - is roughly equivalent to the GDP of all
While many LDCs are eligible for debt relief under the Heavily
Countries (HIPC) Initiative, the report says that many will emerge
unsustainable debt position.
"Preliminary analysis by Oxfam suggests that at least 13 LDCs -
Zambia, Niger and Senegal - will emerge from the HIPC Initiative
more than 10 percent of government revenue on debt," it says.
The Oxfam report is calling for: immediate duty free and quota
for LDCs in industrialized country markets; reform of the EU's
but Arms' proposal to include immediate liberalization of LDC
sugar and rice markets; an end to agricultural import
IMF and World Bank programs; a timetable for OECD donors to
reach the 0.20
percent of GNP aid target; and deeper levels of debt relief.
Copyright 2001 IPS