Trade ministers must not sell out world's poorest people

The global trade deal being discussed by the G6 at this weekend's secretive meeting in London could cost poor countries $63 billion and hundreds of thousands of jobs says development agency ActionAid. Unless the talks take a radical change in direction from the framework agreed at last December's WTO ministerial in Hong Kong, poor countries will lose out whilst rich countries and their corporations reap the benefits.

Despite the fact that this round of talks is meant to help combat poverty, new research suggests that the benefits of the talks to poor countries have been grossly exaggerated and are almost non-existent. The World Bank is now forecasting only a penny-a-day more per person in the developing world under the trade deal that is currently being negotiated.

The United Nations predicts that poor countries could lose up to $63 billion in revenue from cuts to taxes on international trade alone. This is in stark contrast to the $96 billion rich countries are set to gain – 83% of the total gains from the round of talks.

"Far from fighting poverty as initially promised, rich countries are pushing for a trade deal that could leave poor countries tens of billions of dollars worse off. India and Brazil, as the only developing countries invited to this meeting, must stand up to the pressure and reject this bad deal," said Adriano Campolina Soares, from ActionAid Brazil.

According to ActionAid's analysis, job losses in the car industry could be as high as 10,000 in Brazil, 16,000 in India and 180,000 in China as more competitive foreign companies enter the market and displace local industry. These figures ignore the millions more indirectly employed as suppliers – up to 10 million people in India alone.

Brazil, often touted as a country that will gain from a new global trade deal, will actually lose out when all the costs are taken into account, according to research by Tufts University.

While the country could gain $3.6 billion from increased agricultural exports, it would lose up to $3.1 billion from lower taxes on manufactured goods entering the country. Added to the estimated $530 million lost from agreements on intellectual property and the $130 million annual bill for implementing WTO agreements and Brazil would be a net loser by $160 million.

"Despite the pressure for a breakthrough, the cost of this deal is clearly too high for the people in poor countries whose jobs are at stake. The EU and US must stop their bullying tactics and put more serious offers on the negotiating table," said Ruchi Tripathi, from ActionAid UK.