Free trade ≠ Fair trade

One would think this would influence the neo-liberal thinking on markets and trade. However, it seems that the EU does not see the need to reform its trade policy. It is holding on to its strategy to eliminate protectionist measures, believing this will force economic growth in developing countries.
Double morality
No country has managed to industrialise and create economic growth without going through a stage of protecting new industries. Not even Europe and the United States avoided that process. Nevertheless, the latter are forcing others to open up their economies immediately, trying to wipe out their protectionist measures. Pascal Lamy, director-general of the WTO, still believes that protectionism does not protect. Even after 10 years of failing negotiations with developing countries in the Doha-round, he still holds on to this principle. Countries must eliminate tariffs because opening the markets is good for everyone.
However, the newly adopted WTO's trade-related intellectual property (Trips) agreement provides more protection for new technologies in developing countries. In the meanwhile, rich countries are unwilling to give up their own tariffs, quotas and subsidies. Today European countries still make access impossible for the products of developing countries. The European Commission’s reform proposals for the Common Agricultural Policy (CAP) do not give the impression that the EU is questioning the fact of making direct payments to European farmers. In the field of cotton, subsidies are linked to production. This gives European cotton farmers an unfair advantage over poor country producers, especially those in West Africa.
Dubious prospect
The capitalist credo that markets should be freely accessible to anyone is not a proven catalyst for economic growth. China, Japan and India have generated benefits of integration without having anything remotely resembling a liberal trade policy. Additionally, by opening their markets, developing countries risk becoming more specialised in the production of simple, labour-intensive products, and even less diversified in the production of goods with added value. New activities are unlikely without the implementation of an industrial policy.
Obsolete strategy
In its newest trade strategy, Trade, growth and development, the European Commission (EC) is gunning for liberalisation all over again. It wants on-going negotiations to deliver and refers to the Doha-round and the Economic Partnership Agreements (EPAs). Both have proved to be dead-end tracks for over 10 years. After a long period of slow negotiations on EPAs, the EC offers developing countries temporary preferential access to the European market with a 2014 deadline. If they do not sign, they will lose any kind of preferential access to the EU market. The EU strategy seems to be reasoned on the basis of the European growth agenda and not with the interests of the world's poor in mind.
New trade round
It is about time that the EU liberalizes in favor of international development. This would mean serious reform of the CAP and a roadmap for fair trade principles. The EU should force flexibility instead of following the WTO rules considering all protectionist measures as market-distorting practices. It could push for rules that allow developing countries more opportunity to set tariff levels in line with the maturity of their industries. This would give developing countries time to strengthen their markets, modernise their agriculture and enhance their regional integration. Regional trade promotes production for a wider market and increases efficiency. Finally developing countries could take the initiative for a new trade round and make more sensible demands and set more realistic targets for global exports.
(Each article reflects the personal view of the author)































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