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FREE TRADE IS UNFAIR TRADE-THE PHILIPPINES
Dr. F. Ross Kinsler
A New York Times editorial for July 20,2003, entitled "The Rigged Trade
Game," explains how free trade actually works for Filipino farmers.
Put simply, the Philippines got taken. A charter member of the World Trade
Organization in 1995, the former American colony dutifully embraced
globalization's free-market gospel over the last decade, opening its economy
to foreign trade and investment. Despite •widespread -worries about their
ability to compete, Filipinos bought the theory that their farmers' lack of
good transportation and high technology would be balanced out by their cheap
labor. The government predicted that access to world markets would create a
net gain of a half-million farming jobs a year and improve the country's
trade balance.
It turns out that U.S., Japanese, and European agricultural products are
protected by high tariffs and underwritten by massive farm subsidies-despite
WTO rules. They invest almost a billion dollars a day in taxpayer subsidies.
Filipino fanners simply cannot compete—even working in the fields at a
dollar a day—in the global market and even in then: local markets. In eight
years under the WTO the Philippines has seen American corn growers receive
$34.5 billion in taxpayer support, enabling them to export that corn at
two-thirds the cost of production.
The global economy does not offer an even playing field. Quite the contrary.
Corporate agro-industry is wiping out the livelihood of millions of small
Third World farmers through massive subsidies, tariff barriers, and dumping,
"essentially kicking aside the development ladder for some of the world's
most desperate people." The latter are forced to open their poor economies
to imported industrial goods and services, but they are not allowed to
export their agricultural goods.
The developed world's $320 billion inform subsidies {in 2002] dwarfed its
$50 billion in development assistance. President Bush's pledge to increase
foreign aid was followed by his signing of a farm bill providing $180
billion in support to American farmers over the next decade. A fair shot,
more than charity, is what poor nations need. According to International
Monetary Fund estimates, a repeal of all rich-country trade barriers and
subsidies to agriculture would improve global welfare by about $120 billion.
An uptick of only 1 percent in Africa's share of world exports would amount
to $70 billion a year, some five times the amount provided to the region in
aid and debt relief.
The future impact of these unfair trade practices on international
relations, global poverty, and even terrorism is difficult to estimate. But
the hypocrisy and injustice can only lead to resentment and unrest. The
Philippines has not gained but lost hundreds of thousands of fanning jobs.
Qobalization is perceived as a new imperialism. "Despair in the countryside
feeds a number of potent anti-government insurgencies."
Consider the implications of this analysis for U.S. citizens and people of
faith.
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DEBT IN
AFRICA-2004
The Jubilee USA Network (www.jubileeusa.org) has prepared an update on the
status of debt in Africa for 2004. This movement has for years been calling
for debt cancellation for impoverished nations, most of which are African,
in order to allow these countries to use those resources for health and
education and the AIDS pandemic.
In a world where AIDS is claiming more than 8000 lives a day, and literacy
rates are fatting, the most impoverished nations are siphoning desperately
needed resources for health care and education to pay the wealthiest nations
and institutions service on a debt that they have already paid three times
over. African nations are at the epicenter of both the debt and the AIDS
crises, facing drought and famine and recovering from regional conflict.
Despite this reality, African nations are paying more in debt service to the
U.S. and other creditors titan they receive in aid, new loans, or
investment.
Where debt relief has been substantial, health and education spending has
increased 40-90%. But even among the Heavily Indebted Poor Countries (HIPC),
relief has been only partial, and it has been conditioned by unhelpful
structural adjustments imposed by the donor agencies.
- Today Africa's external debt stands at $333 billion. African nations pay
$1.51 in debt service for every SI received in aid.
- African nations have paid their debt three times over in the past ten
years alone, yet African nations are three times as indebted as they were
ten years ago.
- The average spending on debt service is $14 per person, while the average
spending on health is less than $5 per person.
- If African governments invested in human development rather than debt
payments, an estimated three million more children would live beyond their
fifth birthday, and a million cases of malnutrition would be avoided.
The G7 countries originally promised to contribute/cancel $100 billion of
the debts of the 42 Highly Indebted Poor Countries, but contributions have
so far fallen far short. Only 34 countries in Africa will have some of their
debts reduced. No African nation has been offered full debt cancellation.
Many have yet to see any debt relief. Contributions have been falling by
almost $1 billion a year since 2000, reducing payments by about 1/3.
The Jubilee USA Network calls on the U.S. to implement the debt relief
provision signed into law in 2003 (doubling the amount of debt relief
awarded to date) and further to agree in 2004 to 100% cancellation of the
external debt of deeply indebted and impoverished African nations without
harmful structural adjustment programs.
1. How can we encourage our government to reduce and eliminate the debts of
the world's poorest countries?
2. What can our churches do?
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