[e-drug] Oxfam on international trade rules

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E-drug: Oxfam on international trade rules
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BMJ 2002;324:937 (20 April 2002)

International trade rules "rigged in favour of the rich," Oxfam says
Alex Vass BMJ 

International trade rules amount to institutional fraud and are
preventing development in poor countries, says a report published this
week by a leading charity. 

Whereas trade has been the been one of the most powerful driving
forces in increasing prosperity for much of the world, millions of the
world's poor are being left behind, and there is a widening of
inequalities between the rich and poor. 

International trade rules, says the Oxfam report, are "rigged in favour
of the rich." When developing countries export to rich country
markets, they face tariff barriers that are four times higher then those
faced by rich countries. These barriers cost them $100bn (?70bn;
þ113bn) a year, twice as much as they receive in aid. 

The report says there should be an end to the "ritualistic exchanges"
between "globaphiles" (those that argue that globalisation is working
for the poor) and "globaphobes" (those who say that trade in
inherently bad for the poor). Such war of words is counter productive
when, the report says, neither view offers any hope for the future. 

Changes in the global trading system are taking place, Oxfam says,
and are already having profound implications for all countries. Trade
now accounts for a greater share of world income than ever before.
Even in developing countries exports account for more than a quarter
of their combined gross domestic product, a higher proportion than for
rich countries. Trade is also now moving beyond its dependence on
primary commodities into high technology exports, with countries such
as China, India, and Mexico becoming world suppliers of cutting edge
technologiesþ as well as labour intensive goods. 

Trade, the report says, can reduce poverty and has far more potential
for the poor than aid. If developing countries increased their share of
world exports by just 5% an extra $350bn would be generated, seven
times what they currently receive in aid. 

However, the current trade rules are keeping 1.1 billion people on an
income of less that $1 a day and 14% of the worldþs rich accounting
for 75% of global gross domestic product. Removal of trade barriers,
with quota-free access to trade markets, together with a general
reduction in tariff peaks, could provide a powerful impetus to a
reduction in poverty in developing countries, the report says. 

The trade related aspects of intellectual property rights agreement
(TRIPS), the report adds, is a prime example of bad trade rules. Under
TRIPS there will be more stringent enforcement of patents, which
could double the cost of medicines. Overall, developing countries will
lose about $40bn a year in the form of increased licence payments to
northern based transitional countries. Half of this sum will go to the
United States. 

Additionally, under the general agreement on trade in services (GATS),
industrial countries are seeking investments in basic utilities, such as
water. This, the report says, promotes forms of privatisation that will
not be in the interests of the poor. 

The report calls for an end to the universal application of the
intellectual property blueprint, and argues for the right of developing
counties to retain shorter and more flexible systems of patent
protection. Public health priorities should be put before the claims of
patent holders, building on the commitments made at the World Trade
Organization's conference in Doha, Qatar, in November 2001
(BMJ2001;323:1146). 

Rigged Rules and Double Standards is available from
www.maketradefair.com 
  
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