Oxfam: Davos meeting must signal change of direction in trade talks

The future of the world economy and trading system is at a critical juncture, with global trade negotiations leaving the poorest countries behind, warned Oxfam today on the eve of the World Economic Forum in Davos, Switzerland.

The international agency called on powerful business leaders and politicians at the meeting to seriously consider ways in which poverty and development could be prioritized in global trade negotiations, and warned that without a change of tack, inequality and insecurity would increase, which would be in nobody’s interests.

Barbara Stocking, Director of Oxfam Great Britain, who is attending the Forum said: “Pro-development trade reform at the multilateral level is badly needed, and yet agreement at the WTO that would serve poor countries’ interests still seems a long way off. Rich countries are concentrating on regional and bilateral deals that impose harsher conditions and entrench existing inequalities.

“The EU, US and others are carving up the world into a series of agreements that undermine multilateralism and stretch the negotiating capacity of developing countries, who face unprecedented pressure to make radical policy changes that will seriously undermine their efforts to reduce poverty.”

Oxfam said that talk of an approaching accord between the EU and US on agricultural negotiations at the WTO should not detract from the reality that there is a long way to go to get a multilateral deal that is genuinely pro-poor.

Stocking: “What was being proposed when WTO talks were suspended was far from acceptable from a development perspective. Just because the EU and US may be able to find a mutually acceptable compromise that satisfies their domestic lobbies does not mean that we are any closer to a deal that will reduce poverty.

“The balance in WTO talks is still wrong: developing countries must be given flexibility and a helping hand up the ladder, not harsh reciprocal proposals that reduce their ability to promote food security and rural livelihoods, or use trade policy to encourage industrial development. The bottom line is that rich countries must stop treating development issues as concessions.”

Oxfam highlighted the EU’s pursuit of rapid liberalization with Africa, Caribbean and Pacific nations through Economic Partnership Agreements (EPAs) as contrary to development needs. The EU should be more flexible and responsive to the needs of some of the poorest countries in the world, and not insist on reciprocity or the inclusion of WTO plus issues.

Meanwhile, the US should focus on agreeing a pro-development Farm Bill, which would help facilitate a WTO agreement to reduce trade-distorting agricultural subsidies and end dumping. Both trading powers should re-prioritize the multilateral negotiations, above regional and bilateral deals, and focus on meeting the promises made for reforms that boost development.

The private sector has an important role to play. They should reduce behind-the-scenes pressure for trade agreements that favor corporate interests above the needs of poor people and the environment. True corporate social responsibility respects the need of developing countries’ economies for space to grow, and extends this down the supply chain by guaranteeing workers’ rights, and committing to transfer technology and train local staff.