The economic expert's view of Make Trade Fair

Edmund Woodfield looks at top economist Joseph Stiglitz's take on the aims of the Make Trade Fair campaign.

Joseph Stiglitz Fair Trade For All

As Make Poverty History campaigners, one of our objectives was trade justice. But what does that mean? In his book Fair Trade For All (How Trade Can Promote Development), Nobel prize-winning economist Joseph Stiglitz attempts to explain what we should be campaigning for when we demand fair trade.

Oxfam's Make Trade Fair campaign has eight goals. The same issues are covered in the book, so what is the expert's opinion?

Should rich countries remove barriers to imports for all poor countries, and should governments in the developing world adopt policies that help poor people access markets and benefit from trade?
Stiglitz suggests a trading system whereby each economy gives free access to every country with a smaller economy, both in size and per person. This would mean that an economy like the EU would give free access to all poor countries, but a poor country would only have to do so for even poorer countries. This would have the effect of increasing trade between poor countries, something Tony Blair's commission for Africa suggested is vital.

Should there be a ban on agricultural export subsidies?
Stiglitz states that a reform agenda would include "the elimination of export subsidies."

Should there be an end to attaching conditions to IMF-World Bank loans?
Stiglitz argues that IMF conditions may adversely affect countries' chances of successfully reducing protection, the very opposite of their intention.

Should we create fair patent rules which ensure that poor countries are able to afford new technologies and basic medicines, and that farmers are able to save, exchange, and sell seeds?
Stiglitz points out that income from poor countries is a small amount of what western companies earn. It makes sense to allow poor countries to have less restrictive competition rules to increase the pace of development while having virtually no effect on big companies in the west.

Should we take action to increase prices for primary commodities such as coffee, and pay more to small farmers?
Using the example of cotton, Stiglitz shows that a large producer like the US subsidising its farmers dramatically reduces global prices, whereas for poor countries with smaller production, this is not so. Therefore reducing rich country subsidies without requiring poor countries to do the same would have a beneficial effect for the poor. He suggests that a development agenda at the WTO would reduce rich country subsidies on goods such as cotton.

Do we need better employment standards, especially for women?
Stiglitz warns that liberalising poor economies too much (ie reducing tariffs and subsidies) could create a system in which the most competitive companies are those with the worst conditions for workers. Poor countries need to be financially supported to be able to have sufficient safeguards for their workers.

Should our goal be a more democratic World Trade Organisation which gives poor countries a stronger voice?
Stiglitz demonstrates that rich countries are far more able to bring complaints before the WTO against poor countries than vice-versa. He suggests that rich countries should give assistance to poorer countries to pursue claims against unfair trade.