'They can say even the World Bank doesn't think free trade would do much for reducing poverty.'
by Paul Blustein
In a recently released book, the World Bank says that the potential benefits
for the world's poor of a far-reaching trade deal "are significantly lower"
than it had previously thought.
The bank has long served as a source of authority for claims -- by
commentators, public officials and others -- that the ongoing trade
negotiations, known as the Doha round, could lift multitudes of people out
of poverty. The scaling back of the bank's projections is noteworthy, and
comes at a sensitive time, as the Hong Kong meeting of the World Trade
Organization remains stalled due to fierce disputes among the WTO's 149
member nations.
The bank estimated three years ago that freeing international trade of all
barriers and subsidies would lift 320 million people above the $2 a day
poverty line by 2015. Now, however, bank economists project the figure at
between 66 million and 95 million people. And even that assumes the WTO
negotiators would completely abolish tariffs, quotas and other obstacles to
commerce - a fanciful scenario, calculated only to show what a maximum deal
would produce.
Assuming a more plausible outcome in which the WTO members agree to some
deep cuts in tariffs and subsidies while stopping short of pure free trade,
the reduction in the number of people below the $2-a-day line by 2015 would
be only about 6.2 million to 12.1 million people, the bank now reckons. That
is less than 1 percent of the people living below the line.
"This is a windfall for anti-globalists," said William R. Cline, a scholar
at the Center for Global Development. "They can say even the World Bank
doesn't think free trade would do much for reducing poverty.". . .
[Since Mexico signed the Nafta (North American Free Trade Agreement) deal
with the US and Canada in 1992, its annual per capita growth rate has barely
been above 1%. Vietnam has grown by around 5% a year for the past two
decades. Poverty in Vietnam has come down dramatically: real wages in Mexico
have fallen.--Larry Elliott, "A look at Vietnam
and Mexico exposes the myth of market liberalisation," Guardian,
December 12, 2005]
[The growing intimacy between business and political leaders is leaving poor
countries on the sidelines of the world trade game--Dominic Eagleton, "Trade
secrecy," New Statesman, January 25, 2006]
[British households pay an extra £832 a year in grocery bills due to the
huge EU subsidy system that is also depriving tens of thousands of African
farmers of their livelihoods, a charity warns.--Maxine Frith, "EU
subsidies deny Africa's farmers of their livelihood," Independent, May
16, 2006]
[ . . . the price of cotton is collapsing under the huge $4 billion
subsidies given to agribusiness in the United States, which then dumps
cotton on a world market with 50% reduction of price artificially.--Vandana
Shiva, "Farmer
Suicides, the U.S.-India Nuclear Deal, Wal-Mart in India and More,"
democracynow.org, December 13, 2006]
[The problem really is, is that the United States and the International
Monetary Fund and the World Bank, all of which we, the United States,
dominate, have for the last twenty-five, thirty years have insisted that in
order to get the loans, which Haiti and these other countries, agricultural
countries, need, in order to get those loans, Haiti had to change their
economic system so that their country was open to competition from other
countries on agriculture, trade, a number of other things. . . .
Well, it turns out that the competition doesn't do the same thing. And the
main competition is the United States. So at this point, the United States
exports over 200 million metric tons of rice every year to Haiti. And
they're actually like our third biggest customer. And the reason is that our
rice is cheaper than the rice that they could grow there themselves, because
our rice is so heavily subsidized. A billion dollars a year of taxpayer
money goes to rice farmers in the United States, plus we have a tariff. We
have three different subsidies, three different programs that do that, plus
we have a tariff that adds between three and 24 percent protection for our
rice farmers. And as a result, the rich and powerful country of the United
States, along with other rich and powerful countries in the world, have just
really bullied these small countries into accepting our rice.--Bill Quigley,
"The US Role in Haiti's Food Riots," democracynow.org, April 24, 2008]
[When McNamara took over the Bank, "development" loans (which were already
outstripped by repayments) stood at $953 million and when he left, at $12.4
billion, which, discounting inflation, amounted to slightly more than a 6-
fold increase. Just as he multiplied the troops in Vietnam, he ballooned the
Bank's staff from 1,574 to 5,201. The Bank's shadow lengthened steadily over
the Third World. Forests, in the Amazon, in Cameroon, in Malaysia, in
Thailand, fell under the axe of "modernization". Peasants were forced from
their lands. Dictators like Pinochet and Ceausescu were nourished with
loans.--Alexander Cockburn, "McNamara: From
the Tokyo Firestorm to the World Bank," counterpunch.org, July 7,
2009]
["free trade is by far a more formidable agent than war in the subjugation
of a nation."--Nick Alexandrov, "Nothing
to Celebrate: NAFTA at 20 Years," counterpunch.org, January 8, 2014]
"The deceptive promise of free trade," DW, June 6, 2018