15 July 2005

Tony Blair and the UK government today face charges of hypocrisy over their promise to help make poverty history through fairer trade while continuing to push poor countries to open their markets at the risk of millions of jobs.

The attack came as ActionAid unveiled a new report which warns that Britain is pressing developing countries to accept imports of manufacturing and industrial products, such as textiles, leather, fish and automobiles, despite evidence that liberalisation has had a devastating impact on poor countries’ economies.

ActionAid says Britain and other developed nations are demanding the negotiations be speeded up to help their transnational companies expand into emerging southern markets. But, the report shows, developed nations first grew their own industries behind protective barriers.

In poor countries large numbers of factories closed, with many jobs lost, when structural adjustment policies imposed by the World Bank and the International Monetary Fund enforced rapid industrial liberalisation. ActionAid points to evidence from the United Nations Conference on Trade and Development that half of 40 countries examined – including Ghana, Zimbabwe, Paraguay and Barbados – saw their industries suffer after opening their markets. In Ecuador thousands of workers were forced out of their jobs, mainly as a result of trade liberalisation policies in the 1990s. Many small and medium-sized companies were put out of business.

The report - Bound and Tied: the developmental impacts of industrial trade liberalisation negotiations at the WTO - says that in the NAMA talks developing nations face pressure to cut import tariffs, losing vital tax income. ActionAid says cuts would flout the mandate agreed at the WTO ministerial summit at Doha in 2001 which called for "less than full reciprocity in reduction commitments".

The report cites statements from the UK government and Mr Blair’s Commission for Africa that poor countries should have the flexibility to decide when to open their markets and at what speed. Yet Britain is helping to lead the drive to open developing countries’ markets and European trade commissioner Peter Mandelson said the EU stands ready to phase out its export subsidies, but only if developing countries reduce their industrial tariffs.

ActionAid demands:

• a halt to the current NAMA talks.
• rejection of the present text in the negotiations.
• a full, independent review of the potential impact of the talks on development and the environment.

Tim Rice, ActionAid trade policy officer, said: “Poverty is a scar on the conscience of the world which must be healed. But, if rich nations like Britain push developing countries to open their markets to unfair competition, that scar will worsen. The UK must use its presidencies of the G8 and the European Union to stop these negotiations on manufacturing and industrial trade in their tracks before millions more people are thrown into poverty.”