Today, trade is one of the most powerful forces linking our lives. It is also a source of unprecedented wealth. However, millions of the world’s poorest people are being left behind. Increased prosperity has gone hand in hand with mass poverty and the gap between the rich and the poor widens. According to an Oxfam report (2002) World trade has the potential to act as a powerful driver for the reductions of poverty as well as enhance economic growth but the potential is being lost. The report claims that international trade is not inherently opposed to the needs and interest of the poor, but “the rules that govern it are rigged in favour of the rich nations” (Oxfam 2002 p.3).
The human costs of unfair trade are huge. If Africa, East Asia, South Asia and Latin America were to each increase their share of world export by one per cent, they resulting gains in income could lift 128 million people out of poverty, says the Oxfam report.
The report accused the governments of rich countries of double standards. While the rich continually stress their commitment to reduce poverty in developing countries, the same countries use their trade policy to conduct what amounts to robbery against poor countries. For example, when poor countries export to rich countries, they face tariff barriers that are four times higher than those encountered by rich countries. Those barriers cost poor countries $100 billion a year – twice as much they receive in aid. In addition, the unfair trading system allows governments in the North to continue with subsidies to their farmers while countries in the South have been forced to dismantle protective measures and open up their markets to cheap Northern exports. Therefore, farmers in developing countries struggle to provide for their families causing enormous suffering on the world’s poor. Globalisation continue to benefit the few rather than the many.