Trade Liberalisation

Date of Adoption: November 2001
Policy Serial No: POS 2.3.1
Amended: Oct 2008

The problem:

Trade has the potential to lift millions out of poverty and promote economic and social development. That potential is not being realized because the rules and practices of international trade are biased towards awarding a disproportionate share of the benefits to rich countries and powerful corporations, which in turn are reinforced by institutional systems.

Oxfam Australia's principles:

While recognizing that trade is important in generating prosperity, Oxfam Australia believes that what is required is fairer trade rules, not simply trade liberalization. Wide-ranging changes are needed to ensure that the world trade regime promotes poverty reduction, respect for human rights, and environmental sustainability. These changes will involve radical reform of trade policies, agreements, and institutions at national, regional, and international levels. They will also require a fundamental change of approach by governments so that trade is no longer seen as an end in itself, but rather is managed and evaluated on the basis of its contribution to economic and social development and environmental sustainability. These principles are covered in depth in the Rigged Rules & Double Standards report by Oxfam.

Oxfam Australia calls on the Australian Government to:

Support the right of developing countries to protect the conditions of their imports trade. Developing countries should not be pressured into signing trade agreements that set back the pursuit of economic and social development. The World Trade Organization (WTO) needs to support the right of developing countries to:

Decide the pace and extent to which they liberalize their import trade.
Protect particularly important sectors of their economies, including manufacturing or service sectors and essential public services.
Resist liberalizing their agricultural import trade prematurely when that is likely to lead to an influx of imports that would undermine local livelihoods
Be allowed extended and more lenient ‘Special and Differential Treatment’ on tariff reductions in WTO agreements
Enact legislation and regulations to protect labour and environmental standards.

Support the ability of developing countries to increase market access into rich countries and protect the conditions of their export trade

Export trade can create new opportunities for employment and investment. However extreme forms of exploitation have often accompanied export growth. Reform is needed for the right of developing countries to:

Protect their agricultural systems for food-security purposes
Protect exploitation of cheap labour, especially among female workers
Engage in higher-value-added trade so that export growth can contribute to rapid increases in living standards.

The Fair Trade system is one example of trade that upholds these rights, where commodities and goods are produced and traded under monitored conditions that are fair and sustainable. Oxfam Australia believes that Fair Trade can influence conventional trade and systems by demonstrating the extent of public concern and consumer demand. It provides an economically viable model of trade that is more equitable in the distribution of negotiating power and the costs and benefits of trade.

Provide adequate ‘Aid for Trade’.

No amount of aid can compensate for fundamentally unfair and harmful trade rules. Developing countries need assistance to actively participate in the international trading system and to effectively pursue their national development agendas.

Recipient countries should drive the process of establishing priorities for the use of ‘aid for trade’ funds rather than responding to donor priorities.
Budgets should be additional to existing development aid. It needs to support investments in productive assets, such as land, credit, health care, education, and infrastructure provision, rather than displacing or diverting current aid commitments from humanitarian and development priorities
Agreements should be predictable, and free of economic conditions. It should not be used as an instrument to coerce developing countries to liberalize or to accept a trade agreement that does not promote their development interests
‘Aid for Trade’ should be complementary to, and not a substitute for, better and fairer trade rules.

Not impose unfair trade rules, rejected by developing countries at the WTO, in bilateral and regional agreements.

Rich countries should not negotiate bilateral or regional trade agreements that are unequal, unfair or take advantage of the weaker negotiating position of developing countries, or undermine the multilateral rules based system. Reform is needed to avoid the imbalance caused by:

Enforcing extensive liberalisation measures, corporate intellectual property claims or investor protection that are often detrimental to development
Limiting the policy space needed for the developing countries to move up the development ladder
Establishing unequal structures in domestic economies, allowing the benefits of trade to accrue primarily to those who already have accumulated assets, while exacerbating gaps between rich and poor.
Undermining the multilateral rules-based system, such as the limited developmental gains made at the WTO, where developing countries have together been more successfully able to reject bad agreements and stand firm on their development needs.

Oxfam Australia calls on world governments, trade bodies and TNCs (Trans-National Corporations)to act on the issues already raised in this Position Policy as well as the following areas:

Adopt social and environmentally responsible business practices:

Northern governments should establish (under the OECD (Organisation for Economic Co-Operation and Development) Guidelines for Multinational Enterprises) better mechanisms for investigation, monitoring and reporting, in order to hold TNCs accountable for their actions in developing countries.
Governments should establish a legally binding international protocol, based on the UN Fundamental Human Rights Principles for Business Enterprises, to govern the production, trade, and consumption of natural resources from conflict areas.
Governments should develop a Global Anti-Trust Mechanism to extend the principles of antimonopoly legislation beyond national borders to the international economy.

Support fair Labour rights

The WTO’s Trade Policy Reviews should report on trade-related labour standards.
The ILO’s (International Labour Organisation) capacity to monitor and enforce core labour standards should be strengthened.
Stakeholders should enact and enforce national employment laws consistent with the core standards of the ILO.

Avoid unfair foreign investment practices

Foreign investment has many potential benefits. It can provide access to new financial resources, technologies, and markets. However, developing countries are often subject to unfair financial investment conditions from a number of bodies, such as:

Agreements that contain loan conditions, which encourage unsustainable debt for developing countries.
Foreign direct investment (FDI) from TNCs that can include high levels of profit repatriation, high-cost incentives to attract investors, and tax avoidance combine to reduce real financial transfers to the country where investments are located.
Liberalisation measures by rich countries under IMFand World Bank conditions that are not balanced by equivalent reductions in their own import barriers.
PRSPs (Poverty Reduction Strategy Papers) that do not include a detailed analysis of the potential impact of trade liberalization on income distribution and poverty reduction.

Support more appropriate measures to protect intellectual-property and variety of food and agriculture resources in developing countries.

We call for trade agreements that:

End the universal application of the WTO intellectual-property blueprint, and allow developing countries to retain the right to maintain shorter and more flexible systems of intellectual-property protection
Commit to put public-health priorities before the claims of patent holders
Support stronger rights for developing countries to develop more appropriate forms of plant variety protection, and to protect farmers’ rights to save, sell, and exchange seeds.

Oxfam Australia calls on our supporters to:

Make informed consumer choices to support trade that is fair, not exploitative or environmentally damaging and contributes to social and economic development of producer and local communities.
Call on governments, global bodies and businesses to engage in fairer trading practices

Summary

Economic integration in the global economy can be a source of shared prosperity and poverty reduction, or a source of increasing inequality and exclusion. Managed well, the international trading system can lift millions out of poverty. Managed badly, it will leave whole economies and peoples even more marginalized.

Continuing on the current path is not an option. But a retreat into isolationism would deprive the poor of the opportunities offered by trade. It would counteract a powerful force for poverty reduction. That is why Oxfam Australia supports a new global trade order, grounded in new approaches to rights and responsibilities, and in a commitment to make globalisation work for the poor.

2. Community Engagement and Consultation

2.1 State Based Activities

Following the face to face meeting with State Chairs on Friday 13th June 2008 a small group of CRC and State Chairs formed to discuss operationalising the Strategic Plan at a local level, Group Development and Maintenance and the discussion about the role of State Committees. The CRC will report orally to the Board on the progress of this discussion.

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