New Faith in Free Trade In Break With Allies, Oxfam Backs Globalization
By Paul Blustein Washington Post Staff Writer Thursday, April 11, 2002; Page E01
Breaking with some of its anti-globalization allies, the aid agency Oxfam International issued a report yesterday that praised international trade as a potentially enormous boon to the world's poor and blasted rich countries for maintaining high barriers to products made in developing nations.
The report combines Oxfam's traditional advocacy on behalf of the poor with uncharacteristic support for free-market economics. It concludes that trade is beneficial but that the United States and the European Union have betrayed their own free-trade principles by tilting the rules of the global trading system overwhelmingly to their advantage.
The report, titled "Rigged Rules and Double Standards," is aimed both at shaming the governments of rich countries and rallying the anti-globalization movement behind a more nuanced stance than the hard-line opposition to trade espoused by many activists.
Rich countries "use their trade policy to conduct what amounts to robbery against the world's poor," according to the report, citing figures showing that developing countries exporting goods to wealthy nations "face tariff barriers that are four times higher than those encountered by rich countries."
That message is embarrassing to the Bush administration, which despite its free-market rhetoric has been reluctant to challenge politically powerful U.S. industries such as textiles that benefit from tariffs protecting their goods from low-cost foreign competition. But the message also throws Oxfam's considerable prestige behind a pro-trade agenda that sets the organization apart from groups that favor protection for labor unions and farmers in rich countries.
"The extreme element of the anti-globalization movement is wrong," said Kevin Watkins, a senior policy adviser for Oxfam who wrote most of the report. "Trade can deliver much more [for poor countries] than aid or debt relief."
"We're not entirely disassociating ourselves" from other groups that criticize free trade, Watkins continued. "But you can't have an approach that says, 'We insist on the right to sell to you, but you can only sell to us provided there's no powerful constituency involved.' " By launching this campaign, he added, Oxfam hopes to "channel the energy in the anti-globalization movement that's currently involved in trashing McDonald's."
The report's reasoning is not entirely based on orthodox free-trade economics. Oxfam criticizes the International Monetary Fund and World Bank for pressing developing countries to open their markets too fast. The group also accuses multinational corporations of running roughshod over labor rights in developing countries and urges the establishment of a new institution to stabilize the price of commodities such as coffee that are key to the economic health of African, Latin American and Asian countries.
Furthermore, as they launch their trade campaign at a press conference today on Capitol Hill, officials of Oxfam's U.S. chapter are planning to restate the group's opposition to "trade promotion authority," which the Bush administration is seeking from Congress so that it can initiate negotiations for global and regional trade pacts. Although the report itself doesn't mention the measure, which is also known as "fast track" legislation, it is generally supported by free traders because it binds Congress to hold an up-or-down vote on trade deals struck between U.S. and foreign trade negotiators, with no amendments allowed that might cause the deals to come unstuck.
But "there is no contradiction" between Oxfam's report and its opposition to trade promotion authority, said Phil Twyford, advocacy director of Oxfam International, because the organization's main concern is that the legislation "doesn't include a mandate" for U.S. negotiators to press for the kinds of market-opening measures that would benefit poor countries. Oxfam does not share the view of some anti-globalization groups that trade deals should be opposed unless they contain strictly enforceable labor standards, Twyford said.
According to the report, "History makes a mockery of the claim that trade cannot work for the poor" -- some of the most prominent examples being the nations of East Asia, where, "since the mid-1970s, rapid growth in exports has contributed to a wider process of economic growth which has lifted more than 400 million people out of poverty."
The problem is that many poor countries have been unable to share in the prosperity fostered by trade, according to the report, both because of barriers to their products and subsidies that rich countries give to some of their producers, especially farmers. To illustrate the point, Oxfam created a "double standards index," measuring 10 dimensions of rich-country trade policies including average tariffs and restrictions on imports from developing countries.
"No industrialized country emerges with credit, but the European Union emerges as the worst offender, beating the United States by a short head," the report said.