Acton Commentary

The WTO and the Voice of the Poor


The World Trade Organization’s Ministerial Conference in Cancun, Mexico, was a missed opportunity for the poor of the world — an opportunity that could have changed their predicament for the better. Government delegates from the poor nations marched out of the conference in protest of alleged bullying by wealthy countries. I met Kenyan Trade and Industry Minister Dr. Mukhisa Kituyi as he stormed from the meeting hall. “Tell your colleagues in both the press and the nongovernmental organizations that the trade talks have collapsed!” he announced.

The jubilation that followed was both confusing and shocking. Some journalists, members of NGOs, and government delegations cheered and shouted in joy. Stunned, I wondered: Why would people celebrate when trade talks fail? Trade is essentially an exchange of items where a willing seller and willing buyer reach an agreement and everybody goes home happy. The talks at the WTO have turned trade into a zero-sum game, or maybe a chess game.

Governments of both poor and wealthy countries opted to limit the choices of consumers within their borders by failing to facilitate trade among them. God created people with different abilities both in terms of productivity and consumption. It is this fundamental difference in people that makes trade productive. People trade because they are different. It goes against the noble quest for happiness and prosperity for governments to limit people from exchanging goods.

A happy and prosperous society must incorporate virtue in its work in order to be sensitive to what its actions do to others. Virtue alone cannot feed hungry people, however; what can is the productivity and entrepreneurship that are spurred by the exchange of commodities. Entrepreneurship cannot thrive in a system where the laws are not applied uniformly and without exemption.

A few wealthy farmers in the United States of America, European Union, and Japan have virtually held millions of small-scale farmers in poor countries for ransom by defending agricultural subsidies that distort world trade in agricultural products. On the other hand, poor countries and multi-national NGOs have been strenuously arguing for cheap access to medicines for the poor from wealthy countries. It is ironic that people should argue for cheap access to medicines and at the same time be opposed to access to “cheap foods” from the developed countries. The poor simply want freedom to create wealth and access products at whatever price.

It is unfortunate that multi-national NGOs have turned poverty into an industry. In Cancun, groups struggled to rally the support of the local poor Chiapas people to join their demonstrations. The groups, mostly of college students from rich nations, urged the poor to “close their markets up to that time they will develop”. On the other hand, wealthy countries that preach free-market principles were barricading their markets through subsidies and stricter environmental regulations.

Totally ignoring the abilities of the African countries to creatively solve their own problems, developed nations have nurtured a culture of dependency. Wealthy nations prefer giving aid to poor countries instead of giving them an opportunity to trade. Under the banner of “working for free and fair trade”, the United Kingdom Department for International Development pledged 50 million pounds to help the developing countries trade out of poverty. International Development Secretary Valerie Amos announced this package that is meant to help poorer countries create more jobs, increase exports and reap benefits from the multilateral trading system. Can this really facilitate effective trade driven by producer incentives?

For over 40 years, since most African countries attained independence from colonial rule, there seems to be no sunset clause for aid to African governments. This has a compromising effect at the trade negotiations. Supporting African countries to facilitate trade is similar to subsidizing trade in Africa. If subsidies are bad outside Africa, subsidies are bad inside Africa.

The African Union complained in a press release, “It is our view that the conduct of these negotiations should be open and transparent and the final outcome should be pegged on the need to meet the Doha mandate, which placed the needs and interests of developing countries at the heart of the WTO program.” The lack of transparency, however, is exacerbated by the basic donor dependency that organizations such as the African Union encourage by soliciting government-to-government aid.

African countries should ask themselves why rich nations prefer sending donor money to opening markets for their goods. The mentality that trade will kill the poor is a notion that has been perpetuated by wealthy NGOs that prefer to sustain the poor in poverty. To argue for aid to Africa and to oppose trade liberalization in both the wealthy and the poor nations is to argue for stagnation. People should argue for more open trade that will reduce conflicts in Africa and create wealth.

NGOs opposed to multinational corporations’ involvement in Africa mouth the slogan that “Africa is not for sale.” But the development of export industries is a key to African prosperity. Africans want to engage in trade as a voluntary natural action. The World Trade Organization must reassert its role as a trade facilitator as opposed to acting as a trade chess board. It does not help the poor to divide the world into consumers and producers; every group has something to trade and must be given an opportunity to do so.