News archive 2005

Catholic Bishops’ Commission for Justice & Social Affairs publishes “Promoting Fairness in Trade: The Challenge to Eliminate Poverty”

PRESS RELEASE

1 DECEMBER 2005

CATHOLIC BISHOPS’ COMMISSION FOR JUSTICE AND SOCIAL AFFAIRS

PUBLISHES “PROMOTING FAIRNESS IN TRADE: THE CHALLENGE TO ELIMINATE POVERTY”

A POSITION PAPER TO MARK THE SIXTH WORLD TRADE ORGANISATION
MINISTERIAL CONFERENCE IN HONG KONG
IRISH COMMISSION FOR JUSTICE AND SOCIAL AFFAIRS (ICJSA)
“PROMOTING FAIRNESS IN TRADE: THE CHALLENGE TO ELIMINATE POVERTY”

“It seems appropriate that we should reflect on Ireland’s role as a
‘developed country’ in the global context and, in particular, on our
responsibility towards the global common good.”[1]

December 13th 2005 marks the opening in Hong Kong of the sixth ministerial
conference of the World Trade Organisation. As the only global organization
which determines rules of trade between nations, the occasion of this
conference affords an invaluable opportunity for the ICJSA to reflect
upon the ethical dimension of international trade and to add its voice
to those who look to the WTO to make rules which foster food security,
livelihood security and advance rural development objectives. Making
fair trade rules, consistent with development objectives, is essential
for poverty reduction and sustainable development. As was stated in the
recent pastoral on international development cited above, “commitment
to the global common good also challenges the international structures
of trade … The shift to an open trading regime through the World Trade
Organisation means that trade reform is inevitable.”[2] The present
trade round, (The Doha Development Agenda) was launched in 2001 on
the understanding that it was a ‘development round’. If it is to be
faithful to the agenda that it has set for itself, the up-coming Hong
Kong ministerial conference must give priority to addressing the development
dimension of trade in the work to promote human rights, ensure sustainable
development, and eliminate poverty.

Trade liberalisation consistent with development objectives
The human person with inalienable human rights is the only proper focus
of all social and economic relations, and therefore, the progressive
opening up of markets to international trade is something to be welcomed,
but only if it contributes to the global common good.[3] In particular,
any such developments need to be preceded by a considered analysis of
their impact on poor people in developing countries. For example, in
the agriculture sector it is arguable that trade tariffs are one of the
few protections that developing countries can offer their small farmers
to allow them to compete in the face of the economic power of
industrialised farm exports from the developed world.

The very least that must be insisted upon at the upcoming WTO conference
is that developing countries need the necessary policy space to determine
what rate of liberalisation is consistent with their legitimate development
objectives. Furthermore, consideration should be given for an “Aid for
Trade Fund” to provide developing countries with the finances and technical
assistance need to address adjustment costs arising from the Doha negotiations
and to improve their trade-related infrastructure.[4]

Eliminating trade-distorting supports in Agriculture
Given our history, we in Ireland ought to be sensitive to the intimate
relationship between poverty and agriculture. In today’s world, it is
estimated that of the 1.2 billion people worldwide living on less than
a dollar a day 900 million are dependent on agriculture for a living.
Consequently, they will be the first to be affected by decisions reached
in Hong Kong. If the WTO acts to promote sustainable agricultural growth
in the developing world it will have an appreciable impact on poverty
reduction. In this context, it is worthwhile observing that a 1% increase
in agricultural productivity would reduce the proportion of people living
on less than $1 a day by 0.6% – 1.2%. [5]

As a member of the world’s largest economic block, Ireland already makes
a substantial contribution to combating poverty in developing countries.
However, much more is needed in order to meet the challenges of the
Millennium Development Goals to which world leaders have made a commitment.
This is not a responsibility that should be lightly disregarded. As was
stated in the recent pastoral on international development,

How we engage in this process of reform will shape the
economy of Ireland and the developing world. Christian
commitment to the global common good implies that Ireland
must participate in this process with a real concern for
the developing world.[6]

This concern for the developing world will only be translated into action
to the extent that we acknowledge honestly the manner in which agricultural
subsidies impact negatively on the economies of the least developed countries.
While accepting the validity of direct income supports for farmers that are
not related to current production levels or prices, it must be recognised
that subsidies in general, and in particular export credits, encourage
over-production and dumping, both of which have the effect of depressing
the price of primary products and impoverishing subsistence farmers in the
least developed countries.[7]

In the light of this reality, the least that ought to be advocated at the
WTO conference in Hong Kong is the elimination of all forms of export support,
which by definition can only be afforded by wealthier countries or economic
blocks such as the US, Japan, and the EU. Furthermore, while making allowance
for special and differential treatment for developing countries, moves should
be initiated to eliminate all trade distorting subsidies. Finally, work
should be initiated to ensure that all remaining subsidies to farmers be
prioritized in a manner that will support initiatives in the areas of
environmental protection, small family-based production and poverty reduction.

Food aid and the distortion of trade
One of the most sensitive issues that need to be addressed is the manner in
which food aid can act as a disincentive to food production in the developing
world. While food aid is to be welcomed in an emergency, and the generosity
of donors acknowledged, there can be cases where food aid is offered in
non-emergency situations, ostensibly as a form of international assistance.
In these cases, the food aid could be regarded as a form of dumping that
disrupts the competitive position of small-scale farmers and threatens food
security. In the light of this reality, all such aid should be subjected
to appropriate scrutiny to ensure that it does not impact negatively on the
long-term development of the indigenous population.

Concluding remarks
In proposing a position paper that is animated by the Gospel, one is drawn
to acknowledge the primacy of the value of Solidarity. And as the recent
pastoral letter, “Towards a Global Common Good” reminds us,

Nations which embrace such solidarity soon recognise that
commitment to the common good requires a change of mindset.
It requires going beyond a model of international relations
in which nations seek their own advantage often at the expense
of others, to one in which national advantage will sometimes
be limited by the need to find common solutions to common
problems.[8]

In this respect, Ireland is at a crossroads. While acknowledging the
importance of agriculture to the Irish economy and the manner in which
the identity and cultural life of Ireland is bound up with a vibrant
agricultural sector, our responsibility is to pursue agricultural
reform which is people rather than business led, sustaining livelihoods
and thereby promoting sustainable development.

References:
[1] Toward the Global Common Good: Pastoral Letter on International
Development, (Irish Bishop’s Conference, 2005), p. 2

[2] The full quotation is as follows: “Commitment to the global common
good also challenges the international structures of trade. Despite
initiatives designed to give less developed countries preferential
market access to the markets of developed countries, tariff barriers
and non-tariff restrictions greatly diminish the value of these mechanisms.
The shift to an open trading regime through the World Trade Organisation
means that trade reform is inevitable.” Ibid. p. 9.

[3] “The market [has to] be appropriately controlled by the forces of
society and by the state to ensure that the basic needs of the whole
society are satisfied.” Pope John Paul 11, Centesimus Annus 1991, # 35.

[4] See the contribution from the Vatican, Reflections on the Occasion
of the VI Ministerial Conference of the World Trade Organization Hong Kong,
13-18 December 2005, p. 1-2

[5] See the CIDSE-Caritas Internationalis Position Paper of July 2005
entitled Make a Difference for Poverty Reduction at the Sixth WTO
Ministerial Conference in Hong Kong, p. 9. See also Eastwood Robert
and Michael Lipton, “Pro poor growth and pro growth poverty reduction:
what do they mean? What can policymakers do? Paper delivered at the
Asia and Pacific Forum on Poverty: Reforming Policies and Institutions
for Poverty Reduction, Manila, 5 – 9 February 2001.

[6] Toward the Global Common Good: Pastoral Letter on International
Development, (Irish Bishop’s Conference, 2005), p. 9.

[7] An example of this is the subsidy of USA cotton exports that is
documented in the CIDSE-Caritas position paper cited above. As they
say, “Declining world cotton prices have dealt a severe blow to the
livelihoods of more than 2 million people in Burkina Faso who depend
on cotton. Despite producing high quality cotton at low cost, Burkina
Faso, one of the poorest countries on earth, is finding itself undercut
by the strategy of the agribusiness industry that lowers prices to
producers, and facing heavily subsidised producers from the richest
countries in the world, that manage to stand these low prices thanks
to their subsidies. In 2001/2002 the US spent around $3.9 billion on
cotton subsidies [to a few thousand growers], more than the entire
gross domestic product of Burkina Faso, and three times the entire
US bilateral aid budget for Africa.” p. 17

[8] Toward the Global Common Good: Pastoral Letter on International
Development, (Irish Bishop’s Conference, 2005), p. 6.

Notes for Editors

* The Irish Commission for Justice and Social Affairs (ICJSA) is a
Commission of the Irish Bishops’ Conference;
* The ICJSA is chaired by Bishop Raymond Field and its role is to
support the Bishops’ Conference in promoting the social teaching of
the Church and advising on issues of social concern both nationally
and internationally.

Further information:
Martin Long Director of Communications (086 172 7678)
Brenda Drumm Communications Officer (087 233 7797)

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