archives: WTO Info

Trouble with trade
Zohra Khan 08 August 2003 13:48

« Imagine you are playing a five-a-side football match, » the Trade Justice Movement suggests. « However, the other team is Manchester United and they have just changed the rules of the game.

« Your goal will be 20 feet wide, and their goal will be bricked up. This is how it feels for poor countries competing in the global market. Unfair competition and unfair rules. »

Now add another dimension to the football analogy. Imagine an all-women's team playing Manchester United. However, they have never had any formal coaching or training, nor have they played on a proper football pitch before. They do not know the rules of the game and they do not understand the referee's language.

Before getting to the pitch, they have to ensure that their children are fed and clothed. This is how it feels for poor women in developing countries affected by trade policy - gender-biased trade and gender-biased development.

World trade rules rob poor countries of £1,3-billion a day - 14 times what they get in international aid and 30 times the amount they pay in debt repayments. According to United Nations estimates, this means that if trade rules worked for poor countries they could reap benefits of up to $700-billion a year.

Women make up half the world's population, head one-third of all households, are responsible for half of the world's food production, receive one-tenth of total income and own one-hundredth of the world's property. Women are the world's poor, and if trade rules worked for them we might have a very different looking world.

Trade is a powerful force and has the potential to reduce poverty and improve the quality of the lives of millions of poor people, but this cannot happen with current trade rules. At present, trade rules are designed to make rich countries richer and poor countries even poorer.

Developing countries are squeezed out of international markets and even their own local markets. They are pressured to accept internationally agreed trade policies that undermine democratic accountability by reducing the rights of their governments to intervene in crucial areas such as regulation of foreign investment and the provision of basic services.

These trade rules are important because the terms in which poor people participate in world markets can determine whether they have enough to eat, whether they can afford to send their children to school or whether they have access to clean water and essential medicines.

The implications of this are ominous for democratic decision-making in those countries. In poor countries women are the primary users of basic social services so such policies have an even greater negative impact on them.

The World Trade Organisation (WTO) is the main international body that decides the rules that govern trade. South Africa joined the WTO in 1995. In theory the body is democratic, with all members having an equal voice.

But in practice, the WTO is highly undemocratic and developing countries have little influence. Important decisions are not voted on but negotiated so democratic rules are not applied. While poor countries may block or delay a rule, they are subject to huge amounts of behind-the-scenes pressure - including threats to reduce aid if they do not comply.

The United States, the European Union, Japan and Canada have teams of specialist negotiators at the WTO to lobby for their economic interests, while half of the poorest countries in the world cannot afford even one negotiator. At the last WTO meeting in Doha, the EU had 502 representatives, while Haiti had none.

Of the 145 delegations, only eight were women-led. One woman minister of trade talked about the problems she had to overcome in the period following her appointment: « When you are new like myself in this set-up they're going to first think, well, she's black. Secondly, she's a woman and thirdly, she's African. »

There is widespread agreement that current trade rules do not benefit poor people. Former World Bank chief economist Joseph Stiglitz points out in his book Globalisation and its Discontents: « So unfair has the trade agenda been that not only have the poorer countries not received a fair share of benefits; the poorest region in the world, sub-Saharan Africa, was actually made worse off as a result of the last round of trade negotiations. »

Further trade policies are made at a macro level and tend to ignore the complex and often disastrous implications of policies on the lives of poor people at a micro level and this is exactly where women's contributions lie.

The Trade Justice Movement is a group of European organisations campaigning for trade justice - not free trade - with the rules weighted to benefit poor people and the environment. The movement wants world leaders to rewrite international rules, with poverty reduction and environmental protection as priorities. It is calling on world leaders to:

In September this year, the WTO will meet in Cancun, Mexico. One of the key issues on the agenda will be the General Agreement on Trade and Services (Gats). Via Gats, the WTO has attempted to phase out governments' barriers to international competition in the services sector. Gats negotiations will be concluded in 2005.

Once countries have made commitments to Gats these changes will be almost impossible to reverse and will put the provision of basic services beyond the reach of poor citizens. If this goes through, it will have a profound effect on the lives of millions of poor women, men and children in developing countries, undermining their basic human rights.

The profit potential of trade in services has not escaped the attention of multinational corporations. The service sector is the largest and fastest-growing sector of the world economy, providing more than 60% of global output. Of all services, health, education and water are shaping up to be the most lucrative, with global water expenditures now exceeding $1-trillion a year, education more than $2-trillion and health more than $3,5-trillion.

Under Gats, the EU is pushing 72 developing countries to open up their water distribution systems to European multinationals. This means the multinationals will compete with national companies to provide water to developing countries.

Proponents of trade liberalisation in the services sector argue that once the private sector steps in, efficiency and access will improve. In a country like South Africa where average incomes are between R1 000 and R 2 000 a month, it is unlikely that poor people will benefit from privatisation of essential services.

Poor people cannot afford to pay for such services, and there are no incentives for private companies to invest in rural areas. Further privatisation has not meant that services are cheaper. On the contrary, increases in prices of services have resulted in limited access for poor households.

For poor South African women - who have high illiteracy rates, low education levels, are low paid, hold low-status jobs, have limited access to the labour markets and unequal division of household labour - privatising basic services is a recipe for disaster. Increased service costs will mean longer, harder work days for women.

One World Action (OWA), an international NGO working on issues of gender, access to services and democratic accountability, is a member of the Trade Justice Movement. OWA's work on basic services centres on ensuring that poor women and men have greater access to and influence over gender-sensitive basic services. It believes that poor women in particular should have a voice on issues that affect their lives.

The Women in Development Europe Network (Wide) is a European network of gender and human rights specialists and activists, with links to Southern organisations and networks. Globally Wide has played a key role in highlighting the gender blindness of trade policies.

It argues that social services (water, education, health) are public goods and should be excluded from Gats negotiations. Governments should secure their citizens' rights, especially those of poor women, to essential services. At the September meeting in Cancun, Wide will call for a moratorium on, and a gender impact assessment study of, Gats.

The South African women's movement needs to engage in this debate and lobby government officials to place women's needs at the centre of its position on Gats. Women cannot be on the sidelines of the debates that are shaping and changing the very way they live and work. North-South links are important to push this agenda forward.

At a recent African Trade Ministers' meeting in Mauritius, ministers rejected the EU and G8 plans to radically expand the powers of the WTO and launch new free trade agreements at the September meeting. They called for the WTO to focus on addressing their development concerns and to decrease the gap between industrialised and developing countries.

Yet there was no mention of the widest gap in societies in both the industrialised and developing world: the gender gap.

As South African women celebrate National Women's Day on August 9, they should bear in mind that while they have much to celebrate, they have even more to fight for.

Active and open democracy at every level is the key to real change and is vital for long-term sustainable development.

It is particularly important that democracy extends to the poorest communities and allows poor women to have a say in the provision of basic services in their own countries.

Zohra Khan is gender policy officer at One World Action and a member of the Trade Justice Movement. She is on the steering group of the United Kingdom Gender and Development Network and represents the UK on the Women in Development Europe Network.

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