The Church of Ireland
News Briefing

DEVELOPING ISSUES

No. 4 February 2002

The quarterly newsletter of the Church of Ireland Bishops' Appeal

TRADE

(1) World Trade Organisation

After the Second World War, the allied leaders resolved to create a series of international organisations whose role would be to stabilise international trade and economic relations. With memories of the 1930s Depression still fresh, they established three organisations: the World Bank to fund development projects, the International Monetary Fund to help governments with balance of payments problems, and the General Agreement on Tariffs and Trade, the predecessor of the World Trade Organisation. The GATT was to foster international trade and discourage measures such as import restrictions which protected domestic industry.

By the 1990s global politics and economics had changed and GATT needed to change also. The communist bloc had collapsed. Former colonies were independent. (In 1947, 23 countries signed GATT; in 1993, when the WTO was inaugurated, there were 115 signatories and, by 2000, 140.) And much trade, though technically international, was now between national satellites of multinational companies. (A car stamped 'Made in Belgium' might be assembled by an American-owned company from parts manufactured in, say, Brazil, Mexico, US, UK, France, Germany, Spain and Malaysia.) Also, neo-liberal economic dogmas, deregulating the state and freeing trade, had defeated protectionism.

Although the purpose of the WTO is to foster 'free' trade, it has produced 24,000 pages of rules to regulate international trade, rules binding on states rather than traders. In theory its procedures are democratic but 80% of global trade is between the industrialised countries. So, in practice, the 'Quad' (US, EU, Canada, Japan) manage the WTO for their own advantage and to the benefit of their transnational companies (TNCs). Nor are they consistent: under WTO rules, agricultural subsidies must end but the US and EU are delaying domestic implementation of this rule while enforcing it in developing countries. US and EU agricultural export subsidies are ruining farmers in developing countries. Critics say that the WTO seeks to liberalise and promote trade but, by doing so, it restricts the power of developing countries to use trade to promote development. So the WTO is development-blind; it harms rather than helps the poor. For example, at the recent meeting of the WTO in Doha, Qatar (Nov 2001), poor nations were 'literally bullied' into accepting the rich countries' agenda, some being warned that aid would be cancelled if they did not comply. A new round of agreements to open up markets for government procurement, investment and services- which developing countries had initially opposed - was pushed through.

(2) WTO: Reform needed?

Recognising the importance of trade in the international economy - and its potential to lift millions out of poverty - development agencies are now campaigning on trade issues. International trade needs regulation: the WTO needs reform, not abolition. For Oxfam, 'a multilateral, rules-based trade system is needed to manage trade in the interests of sustainable development ' and 'all WTO negotiations should be guided by the principles of poverty eradication, respect for human rights, and environmental sustainability.'

Historically, the industry of developed countries grew under protectionism and they continue to subsidise agriculture. But developing countries are forbidden to subsidise agriculture or to protect nascent industry. In its Trade For Life campaign, Christian Aid identifies 'the seven deadly rules' which need to be changed: 1. that which limits protection against cheap food imports. Export subsidies by rich countries cause cheap food to flood poor countries' markets, undermining the countries' farmers and threatening local production. 2. that which limits government regulation of services. Health, education and water services may now be run and controlled by foreign corporations. (See CA's report Master or Servant, available online, on Ghana's water industry.) 3. that which limits regulation of foreign investment. Poor countries are denied ways of supporting and developing local industry over foreign industry. 4. that which limits the use of agricultural subsidies. While the EU and US spend billions on agricultural subsidies, poor countries cannot use them to develop their own agriculture (cf. 1 above). 5. that which limits use of industrial subsidies, so preventing industrial development in poor countries (cf. 3). 6. that which blocks exports from developing countries to developed countries, losing them jobs and foreign exchange. The United Nations Conference on Trade and Development (UNCTAD) estimates that, by 2005, developing countries could earn $700 billion more per annum from increased exports if rich countries removed tariff barriers. 7. that which gives business rights over knowledge and natural resources (intellectual property rights or 'TRIPS'). This permits TNCs to patent traditional knowledge of foods and medicines e.g. basmati rice in India. This threatens food and health security and has been called 'biopiracy'. The World Bank has set the halving of absolute poverty by 2015 as one of its development goals. Reforming trade rules would help to achieve this.

For further information: John Madeley 'Hungry For Trade' Zed Books London Christian Aid 'Trade For Life: Making Trade Work For Poor People' (can be downloaded as a pdf. file from http://www.christian-aid.org.uk/indepth/0111trbk/t4life.htm); other resources from CA offices or http://www.christian-aid.org.uk/campaign/trade/trade.htm

The Global Economy Of the 100 largest economies in 1999, 49 were countries and 51 were transnational companies. The three richest people in the world now control more wealth than all 600 million people living in the least developed countries. The 48 poorest countries account for only 0.4 per cent of world trade. Since 1980 their share has halved. Income per person in the poorest countries in Africa has fallen by a quarter in the last 20 years.

A Taste of Coffee

Coffee's main markets are in temperate zones, where it cannot be grown. Producer countries consume little. After oil, it is the most-traded global commodity. Yet its value on the global market is the lowest for thirty years and below the cost of production. And, unlike oil, it is produced by smallholders and peasant farmers who lack bargaining power. The reason for the slump is increased production - up 15% since 1990 - partly due to producer countries needing foreign currency to repay debts. In Uganda, export revenue losses over the last five years equal half of the debt relief provided under the Highly Indebted Poor Countries (HIPC) initiative. For Robusta coffee, used in instant blends, the price paid to the grower can be as little as seven per cent of the final retail price. So the price paid to the grower is insignificant in the price of the final product, a matter of a few pence. But, because much coffee is grown on smallholdings and harvesting it is labour-intensive, a low price can ruin small farmers. The low price of coffee in the early nineties had a catastrophic effect on the lives of millions of small farmers, forcing many into crippling debt and countless others to lose their land. In January 1999, Mild Arabica traded on the New York coffee market at $1.01/pound; in November 2001, it was trading at $0.59/pound.

Fairtrade Coffee illustrates the value of the fairtrade movement. Fairly traded products - coffee, tea, cocoa, honey, sugar, orange juice and bananas - have gained a small segment of the market and, in the UK, are now accepted by all major retailers. For example, the fairtrade company, Cafédirect, guarantees to pay $1.26/pound to its suppliers if the world price falls below that level. Recognising the important role consumers could play to improve the situation for producers, Alternative Trading Organizations (ATOs) such as Cafedirect buy directly from farmers at better prices, help to strengthen their organisations and market their produce directly through their own shops and catalogues. For 40 years ATOs have offered consumers the opportunity to buy products which were bought on the basis of fair trade. In 2000, the retail value of fairly traded goods in UK exceeded £30m, of which nearly half was coffee. Fairly traded coffee has 7% of the UK coffee market. More than 120,000 farmers and workers benefit from fairtrade. 'Free trade' critics point out that it 'distorts the market'. But the fairtrade movement remains a viable way to improve the lives of the poor and to bear witness to issues of global poverty and injustice. The coffee tastes good, too.

Fairtrade Criteria

The problems experienced by poor producers and workers in developing countries differ greatly from product to product. The majority of people involved in coffee production are small farmers, working their own land. For these producers, receiving a fair price on time for their beans is more important than any other aspect of a Fairtrade. Most tea however, is grown on estates. The concern for workers employed on tea plantations is decent wages and working conditions. To reflect such differences, the criteria are individually researched for each Fairtrade labelled product, in consultation with the producers and workers concerned . The Fairtrade Labelling Organisations International (FLO), based in Germany, monitor the standards. The Fairtrade label guarantees a price that covers the cost of production; social premium for development purposes; partial payment in advance to avoid small producer organisations falling into debt; contracts that allow long term production planning; long-term trade relations that allow proper planning and sustainable production practices; fair production conditions including, for small farmers' co-operatives, a democratic, participative structure. For plantations/factories the workers should have: decent wages (at least the legal minimum); good housing, where appropriate; minimum health and safety standards; the right to join trade unions; no child or forced labour; minimum environmental requirements. (FLO, Kaiser-Friedrich Str. 13, 53113 Bonn; http://www.fairtrade.net; http://www.fairtrade.org.uk; http://www.fair-mark.org on coffee http://www.oxfam.org.uk/policy/papers/coffee/coffee.htm A 50-minute video on coffee and Cafédirect can be borrowed from BA.)

Fairtrade products are widely available in NI. Look for Cafédirect, Teadirect and Divine chocolate. In RI, they are available in Superquinn, Oxfam, Bewley's and Robert Roberts. During Fairtrade Fortnight in RI, 4-17 March 2002, events are planned to encourage other supermarkets to stock them. If you would like to host a fairtrade coffee morning or similar event, contact Fairtrade-Mark Ireland, Carmichael House, North Brunswick Street, Dublin 7. Tel. 01 475 3515. Or get a group to promise to buy fairly traded products from your local shop if they will agree to stock them.

Cheaper phone calls from Christian Aid

Through its website, Christian Aid has launched a phone service in the UK which uses existing BT landlines. National and international calls are cheaper and about 8% of the cost of the call goes to Christian Aid. Full details on http://www.fish.co.uk or 0845 0800 789. (Applies to UK only)

AIDS update

In defiance of multinational drugs manufacturers, Nigeria is to start importing cheap copies of patented AIDS treatments, reducing the annual cost of treatment from $5700 to $320 per patient. Earlier this year, a court case in South Africa established the right of governments to use cheaper copies of patented drugs in response to the AIDS crisis. Initially, the cheaper treatment will be available to 10,000 of Nigeria's 3.5 million HIV-positive citizens. (Guardian Weekly 19/12/01)

Wananchi for Civic, Social and Political Education (CSPE)

WANANCHI, (pronounced wana-inchi) is a Swahili word for People. It is also a resource featuring the work of development co-operation and Ireland Aid, and was launched by Minister of State Liz O'Donnell T.D. at Iveagh House, Dublin on 7th November. Produced by 80:20 Educating and Acting for a Better World, WANANCHI: 'Education and Action. Together for a better world' is a resource for Civic, Social and Political Education (CSPE) at second level. It includes a manual for teachers and a photo pack. (http://www.ncde.ie )

Congo: "catastrophic"

The international medical charity Medecins Sans Frontieres (MSF) has described the health care situation in the Democratic Republic of Congo as "catastrophic". In a new report, it says the civil war has dramatically increased rates of disease and malnutrition. One quarter of children under the age of five died within 12 months. Up to 80% of families have been looted. 17% of households have witnessed a case of torture Up to 70% of people denied health care In 2001, Save the Children, Oxfam and Christian Aid published a report saying that 16 million Congolese are going hungry, more than two million have been displaced by the war and, in some parts of the country, infant mortality is 40%. About 40% of children receive no schooling, with more than 10,000 child soldiers estimated to be fighting in the conflict (http://www.msf.org)

BISHOPS' APPEAL: LATEST NEWS

Congo:

The Bishops' Appeal Advisory Committee approved an emergency grant of stg£20,000 for the destitute citizens of Goma in the Democratic Republic of Congo. The aid will be sent in two parts, to Goma itself where Archdeacon Assumani and other church leaders are organising the distribution; and to the other major city of the region, Bukavu, where the Anglican church has joined with other churches to distribute food, blankets, cooking utensils and medicines to more than 15,000 Gomans who have fled the volcanic eruption. The emergency aid is being sent through CMS Ireland which has been a partner of the Anglican Church in Eastern Congo for many years. Unlike other churches nearby, the Anglican church in Goma was not damaged by the flow of molten lava from Mount Nyiragongo. The Anglican secondary school and Archdeacon Assumani's house also escaped damage.

Afghanistan:

In December Bishops' Appeal sent £48,400 (IR£41,068 and stg£7,362) for relief work in Afghanistan via Christian Aid. These were the receipts from church collections held in November for the Archbishops' Appeal for Afghanistan and is in addition to IR£60,000 already sent via Concern and SAFE. More will be sent at the end of January as donations continue to arrive from parishes and private donors. From its field office in Herat, Christian Aid co-ordinates emergency relief work, providing food, shelter and health care for refugees. But it is also planning resettlement and reconstruction projects for the medium and long term, enabling people to return to their homes and to rebuild their lives and communities.

Sudan:

The Dioceses of Derry and Raphoe have made a 'major contribution' to increase food production in Southern Sudan. The project 'Sow Seeds for Sudan' was devised in consultation with Bishops' Appeal and Christian Aid. The project trains and equips farmers in the Diocese of Mundri to use cattle and ox-ploughs for cultivation rather than working the land by hand. With an ox-plough, a farmer can cultivate seven times as much land, increasing the quantity of food both for his own family and for sale. In a series of events last October, parishes in the dioceses raised more than £61,000 for the project. In a letter of thanks to clergy , the Rt. Rev. James Mehaffey praised the parishes' effort: 'I am extremely proud and grateful that so much has been achieved through the diocesan project 'Sow Seeds For Sudan' ... To date £61,000 has reached the diocesan office. That is a wonderful sum and will make a major contribution to the welfare of so many families in the Sudan.'

PRAYING FOR THE POOR

Intercessions on global themes from Christ Church Cathedral, Dublin; used with permission.

Lord, we pray for your world and its people. We pray for all those areas where there is strife, war or injustice, remembering especially the people of Afghanistan and the Middle East. Grant success, Lord, to those who plead the cause of peace that their voices may be heard and the suffering of the innocent may be relieved.